Strata Titles Update - November 2022

STRATA TITLES NEWSLETTER – NOVEMBER 2022

Cases

Changing the unit entitlements of owners in a strata scheme

Cheung v Talal [2022] NSWCATAP 352

In this case, the NSW version of the State Administrative Tribunal heard an appeal concerning by-laws (similar to Schedule 2 by-laws 2(a) and 12(b)) preventing any owner from interfering with other’s use of common property, or making undue noise.

Lot A’s owner obtained an order that lot B’s owner should conduct specified noise reduction works on her lot and obtain an acoustic report confirming compliance. The Appeal Court confirmed the orders and said:

1. What is sufficient evidence of undue noise will vary from case to case. Evidence of the owner supported by an expert will likely be sufficient, whilst the uncorroborated evidence of the owner alone may be insufficient.
2. The age of the building may be relevant since the expectation of occupants in older buildings with thinner slabs must necessarily be less than those in new buildings. However, there must be evidence of how the age of the building would impact acoustic standards.
3. The wording of the by-laws also influences what acoustic standards apply. In this case, the by-laws required the owners to ensure that what they did not disturb other owners’ peaceful enjoyment of their lots.

Take-aways: If you have issues with your neighbours’ noise levels, it may be important to engage an acoustic expert, consider the age of your building and read your by-laws.

Can a utility service easement be created for a bore supplying a reticulation system on the common property and other lots?

Carson v Crosbie [2022] WASAT 23

In this case, Lot A had a bore and reticulation which supplied water to the gardens on Lot A, Lot B and the common property. The initial owners of Lot A and B contributed equally to the infrastructure, and there were agreements between subsequent owners that Lot B would pay an annual fee for utilising the bore. The applicant purchased Lot B after these agreements, and had no agreement or other right to connect to the bore. The relationship between the owners deteriorated, and Lot A threatened to terminate the applicant’s access to the bore. The applicant applied to the State Administrative Tribunal (“SAT”) for orders to prevent this and related relief.

The applicant alleged that the use of the bore and the reticulation equipment created a utility service easement under section 63 of the Act and asked SAT to order the registration of the utility services easement (“Easement”). SAT decided that no utility services easement was created for the following reasons:

• before there can be a utility service easement, the lot owner must have an existing right to connect to the relevant utility service;

• it was not a case, for example, of electricity infrastructure connecting an owner to an existing electricity provider where the owner’s entitlement to connect is uncontroversial;

• there was a dispute about whether Lot B was entitled to connect to the bore and the reticulation network. Resolving this dispute falls outside SAT’s jurisdiction; and

• a utility services easement is a statutory easement that does not require registration, and even if it had jurisdiction, it would not be able to order registration of the easement.

Take away: When purchasing a lot, enquire whether the utility services utilised by the lot are supported by proper agreements or confirm to the requirements of sections 63 of the Strata Titles Act 1985 (WA) (‘Act”).

Short facts

The 6 decisions requiring a special resolution:

1. Altering the name of the Strata Scheme (s. 30(2)).
2. Making, amending or removing conduct by-laws (also known as Schedule 2 by-laws) (s.44).
3. Approving expenditure to improve or alter the common property beyond the requirements in sections 91(2) and 102(5) of the Act and regulation 80.
4. Fixing the amount the Strata Company can spend in excess of the approved budget in each financial year (s.102(6)).
5. Removing any member of the council of owners before the expiration of the member’s term of office only if the Strata has not amended or removed governance by-law 4.

What limits can a Strata Company place on the use of an owners lot?

A strata company made a by-law that owners may only keep cars in their carports to prevent an owner from allowing homeless people staying in the carport overnight. The carports formed part of the owners’ lots. Recently, an owner who left a bicycle and lawnmower in the carport was notified to remove them or face enforcement procedures.

According to s.46(j)(i) and (ii) of the Act, a by-law will be invalid if it is prejudicial, oppressive, discriminatory or unreasonable.

The by-law will be invalid if there is no rational connection between the restriction imposed and the protection of the enjoyment by owners of their lots and the common property. Importantly, where the restriction is imposed on an owner’s lot and not on the common property, a by-law may be oppressive if it:

• interferes with the use of an owner’s property to an extent not justified by legitimate concerns of others and where it provides no real benefit to others; or
• is a blanket restriction without exceptions for incidences where no nuisance, hazard or annoyance is created for others.

In this instant, the by-law may be invalid because:

• there is no rational connection between the restriction and the protection of other owners’ enjoyment of their lots and the common property;
• it interferes with the use of an owner’s property without there being a legitimate concern or real benefit to other owners; and
• it provides a blanket restriction without exceptions for incidences where no nuisance, hazard or annoyance was created for others.

Legislation

No amendments to the Act came into effect in November 2022.

Interesting strata facts

• The highest strata lot in the world is the 431m high penthouse on the 129 to 131^st floors of Central Park Towers in New York. It is 1,629m² in extent and is on sale for 373 million dollars.
• In contrast, the most expensive residential sale in Australia was 140 million dollars paid in 2019 for a 3-floor penthouse and sub penthouse in the 247m high apartment block, One Sydney Harbour.
• The largest apartment management company in the world is Greystar Real Estate, which manages 536,342 apartments. Australia’s largest strata management company is PICA, with 260,000 units under management.

Disclaimer re content

The content in this newsletter is intended to provide general information only, and is not intended to be comprehensive, to constitute legal advice or to create a solicitor-client relationship with Douglas Cheveralls Pty Ltd (and no such relationship is created). Douglas Cheveralls Pty Ltd makes no warranties, guarantees or representations about the accuracy, currency or suitability of the information to specific circumstances, and will not be liable (including in negligence) for any loss suffered as a result of reliance on the information contained in this newsletter.