This publication is best read in conjunction with our publication about Bennett v The Owners Of The Fairway Stage Two Strata Scheme 51326 [2021] WASAT 170 which can be accessed here.

Key Points

The Tribunal in Bennett restated the trite legal position that:

(a) the boundaries of Lots in Strata Titles Schemes must be determined in accordance with the:

(i) Strata Titles Act 1985 (WA)(Act);

(ii) Strata Titles (General) Regulations 2019 (WA) (Regulations); and

(iii) state of the Parcel at the date of the registration of the Strata Plan as decided in Topic v The Owners of Raffles Waterfront Strata Plan 48545 [2016] WASAT 27; and

(b) floor tiles, wall tiles and any other material forming the boundary of the Lot as at the date of the registration of the Strata Plan are Common Property.

Strata Companies must under the Act: “keep in good and serviceable repair, properly maintain and, if necessary, renew and replace” those boundary surfaces (Statutory Obligations).

Some Strata Companies have and will likely continue to endeavour to make Owners responsible for maintaining, renewing and replacing the boundary surfaces of their Lots, or incur the cost of doing so, by:

(a) passing a Resolution at a General Meeting or registering a Scheme By-law to that effect; or

(b) relying on By-laws to that effect included in Management Statements which Scheme developers cause to be registered on the Strata Plan.

Any such Resolution or Scheme By-law will be invalid and subject to repeal by the Tribunal except in the below discussed circumstances.

Discussion

Under the Act:

(a) any Scheme By-law that is inconsistent with the Act, including a Scheme By-law that purports to make Owners responsible for the Strata Company’s Statutory Obligations (other than by an Exclusive Use By-law) is invalid;

(b) a Strata Company must perform its Statutory Obligations with respect to all Common Property regardless of whether: “damage or deterioration arises from fair wear and tear, inherent defect or any other cause”; and

(c) a Strata Company can only pass to Owners its Statutory Obligations to Owners by an Exclusive Use By-law to that effect and with the written consent of the affected Owner.

John Park and Abbi Beckwith of Dentons acted for the successful applicant in 88 Lisin Pty Ltd v The Owners of Allegro Strata Plan 44450 – [2019] CC 724 (reasons delivered by transcript) in which:

(a) the Strata Company caused Landgate to register a Schedule 1 (Governance) By-law and a Schedule 2 (Conduct) By-law effectively purporting to pass the Strata Company’s Statutory Obligations with respect to floor tiles, wall tiles and the grout and waterproof membrane beneath them to Lot Owners and required Owners to:

(i) bear the costs of maintaining, renewing and replacing the floor tiles, wall tiles, grout and waterproof membrane forming the boundary of their Lot; and

(ii) compensate the Owner of any other Lot affected by water damage caused by any failure of the floor tiles, wall tiles, grout or waterproof membrane forming the boundary of their Lot,

(Offending By-laws),

(b) the Offending By-laws were not Exclusive-Use By-laws made in accordance with the Act;

(c) the Strata Company endeavoured to enforce the Offending By-laws against the Owner of a Lot in the Scheme by demanding that the Owner pay for the replacement of the waterproof membrane and tiles on the balcony aspects of their Lot; and

(d) the Tribunal:

(i) declared that the Offending By-laws were invalid because they were inconsistent with the Act;

(ii) ordered that the Offending By-laws were repealed; and

(iii) directed that its declarations and orders about the Offending By-laws be recorded as a notification on the Strata Plan.

Takeaways

The key takeaways are:

(a) the Tribunal’s decision in Bennett demonstrates its consistency of approach to the question of responsibility for the Statutory Obligations and the cost of satisfying them;

(b) Strata Companies have the Statutory Obligations with respect to all Common Property in the Scheme including any surfaces forming the boundaries of Lots which are only accessible from within a Lot, for example:

(i) kitchen and bathroom wall and floor tiles; and

(ii) windows and doors;

(c) Strata Companies can only pass their Statutory Obligations to Owners:

(i) by Exclusive Use By-laws; and

(ii) with the affected Owner’s written consent; and

(d) the Tribunal can repeal any Scheme By-law, including an existing registered By-law, if it is inconsistent with the Act.

Please contact us if you:

(a) represent a Strata Company that is concerned about whether its Scheme By-laws are inconsistent with the Act and, therefore, invalid;

(b) represent a Strata Company that requires advice about how it can properly pass its Statutory Obligations to Owners under the Act; or

(c) are concerned that your Strata Company is enforcing an invalid Scheme By-law against you or other Owners or improperly demanding that you perform or bear the cost of it performing its Statutory Obligations.

John Park and Abbi Beckwith can assist Strata Companies, Owners and Strata Managers to understand and apply your rights and obligations under the Act including reviewing and advising about existing Scheme By-laws, amending Scheme By-laws, drafting new Scheme By-laws and representing you in proceedings relating to the enforcement or validity of Scheme By-laws.