If you are a tenant in a strata title property, it is likely that you will have come across a set of items called ‘by-laws’. Often, the by-laws will be given to you by a property manager:

  • after signing the lease; or
  • alongside the lease.

But what do the by-laws mean for tenants? Essentially, the nature of a strata title property means that, as a tenant, you must comply with the by-laws. Failing to do so can have consequences for the operation of your business or the use of your unit. This article will outline what strata by-laws are, and will explain why it is essential to pay attention to the requirements by-laws create.

What Are By-Laws?

By-laws are rules. They are the way that strata properties regulate the use of common property. Common property is all the items that are co-owned. In strata, this is managed by an owners corporation, which is a body formed when a strata plan is registered. You might have come across the strata plan before moving into the property. This will be more common with commercial tenancies, as the strata plan will set out which lot the shop is.

Strata properties need rules to organise how people utilise:

  • shared property. For example, the bin room; or
  • property that is on common land but used by one lot. For example, exhaust flues for a takeaway shop.

There may also be a by-law that sets out which owners have exclusive use of particular areas, such as a storage space that is common property but only accessible by one tenant.

Usually, by-laws will include the:

  • model by-laws, which are set by the government; and
  • additional by-laws, which are added at the time of development, or throughout a properties life.

Developer By-Laws

For commercial or mixed-use strata schemes, it is more common to see developer by-laws. These are by-laws created by the developer before the developer’s hands over control to the owners corporation.

Developer by-laws require more scrutiny as they will usually have varied the majority of the model by-laws. The developer by-laws are essential for complex schemes as the model by-laws are unlikely to cater for tricky situations that can arise in complex schemes. For example, using a grease trap or commercial parking.

Types of By-Laws That Tenants Should Be Aware Of

The primary by-laws that tenants should be aware of include:

  • model by-laws;
  • additional by-laws; and
  • developer by-laws.

The rule of thumb is to be aware of all by-laws, but to give special consideration to those that directly affect you and your tenancy. For example, if you are a commercial tenant who uses the grease trap, you will want to know precisely how the grease trap by-law functions. Some questions you may have are:

  • who is required to clean it out?;
  • is your insurance supposed to extend to repairs for it?; and
  • do you share it, or is it exclusively for the shop?

Lease Rules

Ultimately, there are two sets of rules that tenants need to be aware of and abide by. These are the:

  1. by-laws; and
  2. lease rules.

Both the by-laws and lease rules enforceable. The real difference between the two is that you owe obligations to the:

  • owners corporation under the by-laws; and
  • landlord under the lease rules.

Of course, the two overlap and it is essential to ensure that the two sets of rules do not contradict each other and can be followed simultaneously.

What Say Do You Have as a Tenant to Changes?

Because tenants do not have voting rights at the strata level, you will not have a say as to what by-laws the strata scheme adopts. However, commercial tenants can have an impact through their landlord to ensure the property allows them to operate lawfully.

The best thing you can do as a tenant is:

  • monitor the by-laws;
  • foster a good relationship with your landlord; and
  • suggest changes that benefit the terms of the lease for current and future occupants.

What to Do if You Get a Notice to Comply

A notice to comply is what the owners corporation uses to enforce the by-laws. It will usually be:

  • signed by the strata committee;
  • sealed; and
  • presented to you as a formal notice outlining the specific breaches of the by-laws.

It is rare to receive a notice like this without prior warning that there is an issue. A notice to comply is usually only issued if the warning is ignored or if there is another issue. The notice may rope you and the landlord together as having breached the by-laws. However, this is less common for commercial schemes.

If you receive a notice, it is best that you comply. Of course, if this is a persisting issue or one that you feel you are not responsible for, it will be a case of negotiating and determining your legal rights under your lease.

Often, and especially in commercial premises, the lease will state that the landlord does not guarantee the suitability of the premises for commercial use, which can cause problems with these kinds of disputes.

If your dispute falls into this category, it is best to seek legal advice, especially if it is an issue you do not have the authority to comply with. For example, a structural issue under the lease.

Key Takeaways

The by-laws are important for tenants, yet are often overlooked during the leasing process. When looking at a strata property for your tenancy, it will be necessary to:

  1. obtain a copy of the by-laws to know what the rules are;
  2. ensure that they align with your rights under the lease; and
  3. negotiate with the landlord in respect of anything that is missing or ambiguous.

If you have any questions, contact LegalVision’s strata lawyers on 1300 544 755 or fill out the form on this page.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.
Paul Loccisano

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