This article is about the difference between by-laws and house rules in Queensland strata schemes, explaining that while by-laws are legally enforceable and recorded in the community management statement, house rules are not and serve only as guidelines.
A body corporate commonly creates policies about various practical matters at the scheme. These policies are usually referred to as “House Rules” and are not part of the scheme’s by-laws. Typical topics for these rules include moving in/out, renovation and moving bonds, and use of recreation facilities.
If an owner or occupier does not comply with the rules, either deliberately or accidentally, there can be disagreements about what can be done to enforce the House Rules.
The By-Laws of a Scheme
The by-laws for a scheme are a set of rules through which the body corporate may control and manage matters relevant to the operation of a scheme. By-laws are binding on all owners and occupiers regardless of whether they agree with them or not.
In Queensland, in order for a by-law to be enforceable it must be contained in and appear in the community management statement (CMS) of the scheme, a public document recorded in the Land Titles Registry, under the heading of “BY LAWS”.
The creation, addition or change to by-laws can only be done at a general meeting of the body corporate if passed by special resolution. For a new by-law or a change to an existing one to be enforceable it must be recorded in a new CMS of the scheme. It would only come into force on the day that the new CMS is recorded in the Land Titles Registry and not otherwise. A failure to complete the prescribed process would render the proposed by-law unenforceable, even if it is otherwise approved.
House Rules
The matter of a committee’s powers to make house rules in addition to the by-laws of a scheme was considered by the adjudicator as early as 2011 in the case of Ocean Air Apartments [2011] QBCCMCmr 448, where the adjudicator observed that:
“A by-law may only be created at a general meeting if passed by a special resolution and then only becomes effective (enforceable) when it is recorded as part of a community management statement in the Land Titles Registry. The committee cannot make enforceable by-laws, save in certain specified and limited circumstances.”
Ocean Air Apartments was cited with approval in the case of Atlantis East [2021] QBCCMCmr 118 where the adjudicator was required to consider the validity and enforceability of a house rule prepared by the committee to prescribe a procedure for renovation that required written consent of the committee under a by-law.
The committee submitted that the renovation procedure aimed at assisting owners to complete their applications for consent was in the nature of a by-law. The adjudicator observed that:
“I do not agree. The by-laws only comprise that material that is recorded in the CMS as part of Schedule C. The [renovation procedure], is clearly not recorded in the CMS itself and so does not have the same force and effect as the by-laws. The reference to the [renovation procedure] in the by-law does not make it part of the by-law itself.
It is not uncommon for committees to set rules (often known as ‘house rules’), sometimes pursuant to a specific by-law. The making of such rules is not inconsistent with the legislation and they can provide useful detail or guidelines. However, adjudicators have consistently concluded that such rules do not have the status of a by-law and would not normally be binding or enforceable even when they are contemplated in a by-law.”
In Atlantis East, the adjudicator noted that if the house rule aimed to provide more detailed expectations for renovations and assist the committee in making decisions about renovation approvals required under the by-laws, it could be appropriate as a way to specify the information needed.
In the case of Ilanah Aqua [2023] QBCCMCmr 167 the committee developed and prescribed an application form for lot owners seeking to make changes to their lots which under the by-laws required consent of the committee. The form outlined approved specifications for commonly requested changes, including recommended colour and style choices, to ensure compliance with the by-law requirement for maintaining consistency in the scheme’s external appearance.
In response to the application form (Form) the adjudicator observed that:
“I note committees sometimes find it useful to create a set of rules to provide detail or guidance for lot owners and successive committees on a range of matters, including changes to lots or common property. Such rules are commonly referred to as “house rules.” Adjudicators have consistently held such rules do not have the status of a by-law and as such, are not binding and enforceable. However, simply because they are not part of the by-laws does not render house rules inappropriate or inherently unreasonable.
The Form was designed to streamline the approval process and to help retain and promote high standards and visual uniformity in appearance at the scheme. The Form describes eleven commonly requested changes and explains that approvals can typically be issued quite quickly provided the changes meet the standard criteria specified therein.”
The adjudicator determined that the application form was not inconsistent with the by-laws and simply served to streamline the consent process, helping the committee in its decision-making.
Even if a by-law provides for a committee to make rules, that does not convert the rules made to the status of a by-law. On 3 September 2024 in Winchcombe Place [2024] QBCCMCmr 321, the adjudicator stated:
“[House Rules] may be made pursuant to a specific by-law… Adjudicators have accepted that there is no reason why a by-law cannot provide for a committee to make rules. However, any rules made by the committee are not themselves by-laws. They have not been resolved at a general meeting by the required resolution or recorded in the CMS. Therefore, while a rule made by a committee may provide useful guidance and is not necessarily invalid, it is not binding or enforceable regardless of whether it is made pursuant to a by-law.”
Summary
The key take away is that the committee does not have legislative powers to create binding House Rules seeking to control owners and occupiers of a scheme. Its powers are limited to enforcing the existing by-laws. However, this does not mean all House Rules are invalid.
Brendan Pitman
Grace Lawyers
E: brendan.pitman@gracelawyers.com.au
P: 07 5554 8560
This post appears in Strata News #730.
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This article has been republished with permission from the author and first appeared in the BCCM Common Ground newsletter.
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