Massons

Is there a loophole in the new strata laws?

Written by Leisha de Aboitiz on February 2, 2018

A recent decision by the NSW Civil and Administrative Tribunal has sparked concern about a potential loophole in the new strata legislaton

A recent decision by the NSW Civil and Administrative Tribunal has sparked concern about a potential loophole in the new strata legislation that might allow unruly lot owners to ignore NCAT orders without penalty. The new strata legislation came into force on 30 November 2016 (find out more here).

As a result, the owners corporation sought an order to impose a pecuniary penalty for contravention of the adjudicator’s order under the Strata Schemes Management Act 2015 (NSW) (SSMA 2015), or (in the alternative) under the 1996 Act.

The Tribunal decided to impose the penalty under section 202 of the 1996 Act having regard to the transitional provisions in the SSMA 2015 and section 30(1) of the Interpretation Act 1987 (NSW).

However, a key issue raised in the Tribunal’s decision was that the penalty amount could not be recovered under section 248 of the SSMA 2015 because the owners did not have standing as an “authorised officer” to commence proceedings under section 77 of the Civil and Administrative Tribunal Act 2013 (CATA). An authorised officer who could commence proceedings is the Minister, or a person with the appropriate written consent per section 76 of the CATA. This had led to industry-wide speculation about a potential enforcement loophole in existing legislation.

You can read the full decision here.

Does this mean you can ignore an NCAT order to comply with a by-law?

No. For breaches that have occurred (or will occur) since commencement of the SSMA 2015 there is a new regime for by-law enforcement which involves a different protocol (initiated by the owners corporation) and penalties, which are recoverable as a judgment debt.

For enforcement of by-law compliance orders made prior to the commencement of the SSMA 2015, it would seem the 1996 Act provisions will operate pursuant to the transitional provisions in the SSMA 2015 (as outlined in the Anderson Decision).

How does the new regime for by-law compliance work?

Under the new regime, by-law enforcement is initiated by an owners corporation issuing a Notice to Comply (per section 146 of the SSMA 2015). If a person continues to breach a by-law breach after a Notice to Comply is issued, then the owners corporation may apply to NCAT (per section 147 of the SSMA 2015) to seek an order for the offending person to pay a penalty of up to $1,100.

If there is a further by-law breach within 12 months after NCAT imposes an initial penalty, the owners corporation may make an application for the Tribunal to impose a further penalty of $2,200. A penalty imposed under section 147 of the SSMA 2015 may be registered and enforced as a judgment debt (see section 78 of the CATA).

We understand that the new regime was intended to streamline enforcement with a view to side stepping some of the complexities (and expense) around seeking orders to initiate an enforcement process.

So where to from here?

Despite the new SSMA 2015 regime for by-law enforcement, industry concern remains for:

  • The adequacy of the mandated penalties contemplated in section 147 of the SSMA 2015 for extreme or prolonged breaches of a by-law (e.g. what if the benefit of the breach outweighs the maximum penalties contemplated in SSSMA 2015?)
  • Whether or not there are enforcement issues arising from the relatively narrow category of an “authorised officer” (per s77 of the CATA).

It has been reported in the media that NSW Fair Trading is considering whether statutory amendments may be warranted in 2018 in light of certain statements made in the Anderson Decision.

However, it is unclear what form these amendments will take, or if any will be considered necessary. So for the moment, it’s a case of “watch this space…”, and be aware of the Anderson Decision and how it might impact you.

Insights

"Excellence Awardee" - Boutique Firm of the Year - 2022 Australasian Law Awards

We are delighted that Massons has been selected as an “Excellence Awardee” in the category of “Boutique Firm of the Year” at the 2022 Australasian Law Awards.

Thank you to all of our wonderful clients who have supported our nomination in this category, and to our amazing lawyers and support staff for making this possible!

Wishing all the other Awardees the best of luck and looking forward to the Gala Dinner.  A night out with our team is always cause for celebration – win, lose or draw!!

March 23, 2022

Doyle's Guide 2022

We are excited about our inclusion in Doyle’s Guide for 2022 for NSW in the following categories:

Massons – Leading Property & Real Estate Law Firms
Jodie Masson – Leading Property & Real Estate Lawyers and Leading Leasing Lawyers
Leisha de Aboitiz – Leading Property & Real Estate Lawyers and Leading Leasing Lawyers
Ben Malone – Property & Real Estate Law Rising Stars

Thank you to all of our peers and wonderful clients who have helped to achieve this recognition.

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"Rising Stars" Australasian Lawyer 2022

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Appointment as Senior Associate

We are excited to announce the appointment of Alex Ho as a Senior Associate at Massons.  Alex started with us as a paralegal and has achieved this milestone in record time due to his hard work, his ability to develop and sustain fantastic relationships with clients, his engagement in constantly seeking to improve himself and others in equal measure, and his absolutely infectious enthusiasm.  We couldn’t be prouder!  Congratulations Alex!

January 5, 2022

Australian Lawyer's Elite Women List 2021

December 8, 2021

We are excited to have been named as finalists in several categories in the Lawyers Weekly “Women in Law Awards 2021”:

– Massons – “Boutique Diversity Law Firm of the Year”
– Ole Mitrevski – “Senior Associate of the Year – SME Law”
– Michelle Mon – “Rising Star of the Year – SME Law”
– Nicole Caryofyllis – “Legal Support Professional of the Year”

We are proud to be recognised as a Firm which supports diversity in the workplace and are humbled to be included in the list of finalists in these categories. Win or lose, we are looking forward to celebrating the Awards night and would love to thank our peers and clients who have helped us achieve this recognition.

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Email: property@massons.com