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ACT: Q&A Difference Between House Rules, Rules and ByLaws

The LookUpStrata Team
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ACT lot owner would like to know the difference between house rules, rules and bylaws in ACT strata.

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Question: What is the current status of house rules in the ACT? Can house rules be enforced?

What is the current status of house rules in the ACT? Are house rules mentioned in the legislation at all? Can owners corporations have a set of non-registered house rules, or have they been phased out in favour of registered alternative rules?

If house rules lack enforceability, can the executive committee still send letters to residents requesting that they stop activities that violate these rules? Or does this action only become possible if the rule is a registered alternative rule?

Answer: House rules are guidelines that owners corporations can use with their registered rules.

House rules are not addressed in the legislation. They are guidelines that owners corporations can use in conjunction with their registered rules.

Certain items could be included, like hours for swimming pool, days garbage bins go out, type of rubbish in each bin, links to relevant groups, etc.

House rules have never been enforceable in previous or current regulations.

Over the years, units plan owners seem to have used the wording “house rules” when talking about “rules”.

The owners corporation would need to review their current registered rules and consolidate all those registered.

If you are in a fairly simple plan, it is appropriate to start with the default rules and add any other relevant rules to your plan as “alternative rules”.

Several owners corporation establish a sub-committee to develop these documents for special resolution at a general meeting.

It is always advisable for an owners corporation to seek legal advice to assist with writing their rules.

Jan Browne Bridge Strata E: jan@bridgestrata.com.au P: 02 6109 7700

This post appears in Strata News #667.

Question: Our executive committee has requested residents provide the relationship of visitors. Is this a breach of the Privacy Act?

Our executive committee has requested residents provide the relationship of visitors who, we allow independent access to our apartments, through a fob. The apartments are part of a building complex.

When we ask why and how this information is relevant, they say they have the right to know who is being given access to the complex.

This is despite our Building Business Rules stating that independent access is authorised by the resident who is responsible for their visitors.

Is this a breach of the Privacy Act?

Answer: As there is no requirement under the governing legislation, the occupants may legally refuse to provide the information requested by the committee.

It should be noted that this is an unusual request from the members of the executive committee.

Such a request is likely to be a breach of the privacy act, furthermore it would be very difficult to enforce.

Pursuant to Section 114 of the Unit Titles (Management) Act 2011, the owners corporation is only required to obtain the full name of the occupier of the unit. There is no obligation to obtain details regarding their visitors or guests.

As there is no requirement under the governing legislation, the occupants may legally refuse to provide the information requested by the committee.

There is an acceptance that registered Rules should not contravene any relevant legislation. All owners, residents and members of the executive committee should be aware that majority of security systems used in buildings maintain a register of swipe access use, including dates and times when allocated swipes were used to access areas of common property. This information should be securely maintained in accordance with the regulations of the privacy act.

Jack Stoker Bright & Duggan E: Jack.Stoker@bright-duggan.com.au P: 02 9902 7100

This post appears in Strata News #639.

Question: Can we have House Rules that can cover both split budgets or single budgets for our scheme?

We’ve received the Executive Committee minutes that had the below statement:

“It was resolved that the House Rules governing the complex are to be registered by the incoming committee after the AGM. It was noted that a Rule would need to be added to the Rules at the 2022 AGM if a spilt budget was to be considered at the 2022 AGM. It was discussed that a spilt budget could not be proposed at the 2021 AGM due to the timeframe of the AGM and the legal preparation for this to take place”.

Our complex consists of 5 class B buildings. Some lots use lifts and some do not. Is the above statement legal and accurate? Why can’t we have House Rules that can cover both split budgets or single budgets?

Answer: We’ve provided some guidance on registering or rules, split budgets and fairness of voting

The phrasing of the question and information provided leaves too much to be assumed to enable a detailed response. The best option for the owner is to seek advice from the Strata Manager and they should be able to provide advice specific to the situation.

For ease of reference, broad answers have been provided below to the individual questions.

Registering of Rules

The first thing to note is that any Owners Corporation Rules must be approved by Special Resolution of the Owners Corporation (at a General Meeting) prior to them being registered. The EC can undertake the physical process of registering the rules, however they must first be approved by the Owners Corporation.

Split Budget

Legislative Reform stipulates that a budget can only be split by way of special resolution, subject to registration of an Alternate Rule. A regular budget (1 x administrative fund and 1 x sinking fund) requires an ordinary resolution.

In order to move away from a standard administrative & sinking fund, into the territory of a split budget, an Alternate Rule must be adopted, setting out criteria and formula by which the budget are calculated. It is important to note that a split budget cannot be approved without the Alternate Rule, and the Alternate Rule cannot be retrospectively applied (you cannot split the budget and then develop the rule for registration). Under the new legislation a budget can be split by way of special resolution as opposed to an unopposed resolution as was required prior to November 2020.

Fairness of Voting

Any owner may apply to ACAT for a review of a resolution if they feel it is unfair. If the owner chooses to take this option, they would need to clearly articulate what they are hoping to achieve and the methodology proposed to achieve the desired outcome. Ie; if you would like a budget split to differing portions for the units and townhouses, you would need to set out reasons as well as provide the formula by which calculations have been made.

Nina Cannell Signature Strata E: nina@signaturestrata.com.au P: 02 6185 0347

This post appears in Strata News #524.

Question: When the rules included in the consolidated rules would have already been previously accepted at General Meetings, do consolidated rules need to be adopted at a general meeting of all owners?

Answer: Certainly my interpretation of the Act is yes, rules do need to be registered

Well, certainly my interpretation of the Act is yes, they do need to be registered. Although if you haven’t formally adopted the default rules or adopted any alternate rules by your second AGM after the first of November, the new default rules contained within the regulation will automatically apply. I still believe there is a requirement to register the default rules for a number of reasons. The numbering has changed and the content of the rules themselves has been amended. If you don’t register something that you’ve put the time in to develop yourselves, you will only have the Default Rules from the Act available to the Owners Corporation and nothing customised to your developments individual circumstances.

Nina Cannell Signature Strata E: nina@signaturestrata.com.au P: 02 6185 0347

This post appears in Strata News #516.

Question: How do you get the by-laws for your unit’s plan? How do you register new by-laws? How do you make changes to the by-laws?

Answer: With the legislative amendments released in November, an Owners Cooperation is now required to have a single set of consolidated rules.

Bylaws in the ACT are referenced as rules and with the legislative amendments released in November, an Owners Cooperation is now required to have a single set of consolidated rules. This in part will make it easier in time to obtain a copy of your house rules or your rule because there won’t be various copies all over the place.

Essentially, they should be readily available from your strata manager or your owners Corporation. The rules are part of the owners corporation’s records, so there’s no reason why owners can’t have a copy. In fact, they should be provided to all owners and all tenants as they occupy the building. The rules may also be available on the owners portal, if you have access to an owner’s portal.

If you’re looking at purchasing a new unit or you’re new to an Owners Corporation, the rules will also be included in your sales contract or your section 119 certificate. So they should be something which are very easily accessible to owners and residents.

In terms of registering new bylaws, a draft set of rules would need to be presented to a general meeting of all owners for their consideration, and once passed by a special resolution by the Owners Corporation, they can then be registered as a formal set of rules under the common seal of the corporation. An important thing to note is when you are changing rules, they have to be registered within three months of the resolution being passed. Otherwise, you have to go right back to the beginning of the process and pass that special resolution again.

Changing bylaws or rules is essentially exactly the same as the step before all the way through from presenting the draft right through to the process of registration with Access Canberra.

Nina Cannell Signature Strata E: nina@signaturestrata.com.au P: 02 6185 0347

This post appears in Strata News #511.

Question: Our Unit Plan recently introduced a Code of Conduct as an alternative to the default rules and modified other parts of the default rules to include special provisions. Are these alternate rules legal and enforceable?

Our Unit Plan recently introduced the following Code of Conduct as an alternative to the default rules:

Code of Conduct for Owners, Occupiers and Users of Units.

  1. An owner, occupier of user of a unit must treat all other owners, occupiers and users of units with courtesy and respect at all times taking into account that:
    1. Executive members are available to provide informal routine advice and information to owners, occupiers and users of units as appropriate;

    2. Owners and occupiers of units who wish to raise important matters concerning their unit, or other matters, for consideration by the executive committee must submit the request in writing to the managing agent in the first instance, except in an emergency requiring immediate action.

  2. Intemperate behaviour, offensive language and other abuse is unacceptable, and is not permitted.

The code was developed within our Unit Plan but modified by our Managing Agents. Our rules have now been registered in the ACT.

We also had modified other parts of the default rules to include special provisions for the keeping of pets as follows:

Pets in units

  1. A unit owner or occupier (the pet owner) may keep an animal, or permit an animal to be kept, within the unit if—
    1. the total number of animals kept within the unit (other than birds in a cage or fish in an aquarium) is not more than 3; and

    2. the pet owner ensures that the animal is kept on a leash and is appropriately supervised when the animal is on the common property; and

    3. the pet owner keeps the animal secure within the unit so that it cannot escape the unit unsupervised; and

    4. the pet owner cleans any area of the units plan that is soiled by the animal; and

    5. the pet owner takes reasonable steps to ensure the animal does not cause a nuisance or a risk to health or safety or wild life.

  2. The pet owner must, within 14 days of the day the animal is first kept within the unit, tell the owners corporation, in writing, that the animal is being kept within the unit.

Are these alternate rules legal and enforceable?

Answer: Your Code of Conduct and modified rules are enforceable so long as they’re not in breach of any other legislation.

Yes, basically, with the registered rules, they are enforceable so long as they’re not in breach of any other legislation. It’s not only the Unit Title Management Act that we’re talking about here. We talk about local government acts, we also talk about Discrimination Act. There’s a lot of other legislation that needs to be considered when making alternative rules. The default rules are the best way to start and then add to them, but be very conscious that if they are in breach of those other legislations that makes it very difficult.

We would definitely recommend you seek legal advice when making changes. I think that this is an area where if you do have a rule and you want to enforce it, you want to make sure that you’re on solid ground. There’s been some interesting decisions made in the different tribunals throughout Australia, so it’s best that an Owners Corporation feels that they have the correct advice and that they’re confident going forward that their rules will be enforceable.

Jan Browne Bridge Strata E: jan@bridgestrata.com.au P: 02 6109 7700

This post appears in Strata News #506.

Question: Would you please tell me about the current situation in the ACT regarding drying washing on balconies in Strata apartments? Does it depend on the individual strata rules?

Would you please tell me about the current situation in the ACT regarding drying washing on balconies in Strata apartments? Does it depend on each individual building’s strata rules? 

I understand the NSW Government introduced a by-law allowing the sun-drying of clothes on balconies. I also understand that Strata schemes are not obliged to adopt this by-law in NSW. Is this the same in ACT?

Answer: Any rules pertaining to washing on balconies would be determined by the House Rules or Alternate Rules for each respective Units Plan

The Default Rules of the UTMA make no specific reference to washing on balconies, and consequently, any rules pertaining to washing on balconies would be determined by the House Rules or Alternate Rules for each respective Units Plan.

Importantly, the effect of any Alternate Rule cannot result in a Rule prohibiting or restricting the installation, operation or maintenance of sustainability or utility infrastructure in or on the common property or a unit (S108)(3)(f).

Rule 1.4 of the Default Rules determines approval is required to erect or alter any structure in or on the unit, with the accepted interpretation being approval is only required for permanent structures. However, Rule 1.4(3) states that the owners corporation cannot withhold consent for any structure that is sustainability infrastructure. The definition of such in the UTMA Dictionary is as follows:

sustainability infrastructure—

  1. means infrastructure or equipment that—
    1. if installed in relation to a units plan—
      1. improves the environmental sustainability of the units; or

      2. reduces the environmental impact of the owners corporation and the units owners; and

    2. if installed in relation to a unit—
      1. improves the environmental sustainability of the unit; or

      2. reduces the environmental impact of the unit; and

  2. includes related utility service connections and equipment.

Therefore, it could reasonably be argued that the erection of a drying rack or washing line falls within the definition of sustainability infrastructure.

In most cases, washing on balconies is generally overlooked provided it remains below the height of the balcony balustrade. However, this accepted practice may also be challenged in the future as Rule 1.4(3) goes on to include the example that appearance is not a reasonable factor in withholding permission:

  1. However, if the structure is sustainability infrastructure, the owners corporation’s permission must not be unreasonably withheld.

    Examples—permission not unreasonably withheld

    • safety considerations

    • structural considerations

    Example—permission unreasonably withheld

    external appearance of a unit or the units plan

In the current political environment, with considerable emphasis on sustainability and the environment, it could reasonably be expected that ACAT would not permit a rule prohibiting the use of clothes drying racks on balconies.

Nina Cannell Signature Strata E: nina@signaturestrata.com.au P: 02 6185 0347

This post appears in Strata News #460.

Question: We are reviewing our House Rules in the light of the amended ACT legislation and trying to clean up and simplify the wording of the existing rules. Can we include regulation around the following topics?

I live in a small community of townhouses and am on the Executive Committee. We are reviewing our House Rules in the light of the amended ACT legislation and trying to clean up and simplify the wording of the existing rules.

Can we legitimately:

  1. prevent owners putting their unit on the short-term rental market, eg Airbnb

  2. limit the number of adults that can live in a share-house arrangement;

  3. limit how frequently, for how long, and who can park in our limited visitor parking, and

  4. prevent a resident from running a home-based business?

Answer: The questions raised do not lend themselves to yes or no answers. The issues are detailed.

The questions raised do not lend themselves to yes or no answers. The issues are detailed.

On the issue of short term letting and over-crowding, chapter 12 of my book which is currently on sale for $20 including postage and handling from the Kerin Benson Lawyers website (see information including a link at the bottom of this post) sets out how this works. There are a few moving parts to this which are not detailed in your question and therefore I am unable to answer the question. However, short term letting is permitted in some parts of the ACT.

Chapter 3 of my book deals with rules (and includes sections on car parking). In short, some steps can be taken to limit unauthorised parking in visitor car parking.

3.19 More on car parking granting: Aside from the grant of special privilege rights for car parking, car parking rights can be provided in other ways including the owners corporation granting:

  1. an easement over any part of the common property to park the motor vehicle common property; 1 or

  2. a licence over a specified part of the common property. The ACT unit Titles legislation is silent as to the granting of licences by owners corporations.

Note that while section 20(2) of the UTMA prohibits the transfer, sublet or mortgage of the owners corporation’s interest in the common property, a licence does not involve any of these actions. A licence simply provides the contractual right to park on common property.

In this regard, it should be noted that there is a difference between a lease and a licence. A lease creates an interest in the land which can be transferred to the lessee for the period of the lease as well as granting exclusive use of the land. A licence does not create or transfer an interest in the land nor does it allow the exclusive use of the land.

3.20 Wheel clamping. The general position is that wheel clamping is not permitted in the ACT unless a contractual agreement to do so exists or informed consent has been given.

As there is no legislation addressing this issue, the position is governed by the common law.

A tort is an act or omission by one person constituting an infringement of an interest of another person recognised by the common law as being worthy of protection and giving rise to a right of civil action. The common law has a number of torts (trespass to goods, conversion and detinue) which might apply where an owners corporation attempts to wheel clamp a car without the agreement or informed consent of the owner on the basis that to wheel clamp a car is an unjustifiable denial of the owner’s rights to the car.

Owners corporations should have no problem in creating a rule relating to parking in visitor spaces and wheel clamping provided the development consent or a covenant on the property do not make some express contrary provision in relation to owners or occupiers parking in visitor spaces. However, such a rule can only apply to owners and occupiers. Visitors will not be bound by such a rule as visitors will not have consented to that rule.

Proving a breach of the rule (with a view to issuing penalties on the owner or occupier) will require evidence as well as obtaining an order from ACAT to enforce the rule.

To deter visitors (as opposed to owners or occupiers) from unauthorised parking on common property, the owners corporation will probably need to:

  1. install a boom gate; or

  2. introduce time zones and have Access Canberra Parking Operations enforce these time zones. This will require an approach to Roads ACT to submit a traffic control device (TCD) plan showing the area, line markings and signage. Once a TCD is submitted and Roads ACT has confirmed its approval the owners corporation can approach Parking Operations to request the time zones be enforced.

Apparently, resident parking permits will not be issued on private land given adequate parking spaces are a factor in the development application process. Resident permits are issued for four areas in the ACT where there is likely abuse of residents parking facilities by office workers from nearby buildings and limited arrangements for on-site resident parking. These areas include:

  1. Bega and Allawah Flats, which are Government Housing Trust flats;

  2. Argyle Square; and

  3. Havelock House.

Footnotes:

  1. Unit Titles (Management) Act 2011 (ACT) s 20

On the issue of a home based business, there are some issues around this (see chapter 8 of my book on Work, Health and Safety) but very generally speaking, people are able to run a business from home.

Christopher Kerin Kerin Benson Lawyers E: enquiries@kerinbensonlawyers.com.au P: 02 8706 7060

This post appears in Strata News #447.

Have a question about house rules in ACT or something to add to the article? Leave a comment below.

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