Episode 151 | The Supreme Court’s pet showdown on strata property by-laws | Amanda Farmer, Your Strata Property

Are your Strata by-laws in urgent need of an overhaul?
Amanda Farmer, Strata Lawyer, is a go-to-expert in "strata world" with over 15 years experience as a strata lawyer. Amanda joins us again to clear up what is going on in Strata properties when it comes to owning pets.

Recently, the New South Wales Supreme Court declared that a blanket ban on pets in strata buildings is harsh, unconscionable or oppressive. Here’s Amanda’s take on:

• What this means for strata owners and tenants 

• What pets are actually allowed and in what circumstances can they be banned? 

• What are the limits of an executive corporation's reach? 

• Does this mean there are some aspects of conduct you can't control?

• Why committees with internal conflict are likely to suffer more than just the pets issue.

• Top things buyers & tenants need to be aware of before they choose to purchase or rent a strata property.

For brilliant tips from an expert Strata Lawyer, Amanda Farmer, don’t miss this episode!
GUEST WEBSITES
https://yourstrataproperty.com.au/

RELEVANT EPISODES
Ep 103 | Strata owners rights & obligations
Episode 25 | What hidden dangers can lurk in brand new apartments?

HOST LINKS:
Looking for a Sydney Buyers Agent? www.gooddeeds.com.au
Work with Veronica: https://linktr.ee/veronicamorgan

Looking for a Mortgage Broker? www.wealthful.com.au
Work with Chris: hello@wealthful.com.au

EPISODE TRANSCRIPT: 
Please note that this has been transcribed by half-human-half-robot, so brace yourself for typos and the odd bit of weirdness…
This episode was recorded in November, 2020.

Veronica:

It's official. The new South Wales Supreme court has declared that a blanket ban on pets in strata buildings is harsh, unconscionable or oppressive. And so what does this mean for strata owners and tenants? What pets are allowed under? What circumstances can they be banned? What are the limits of an executive corporation's reach? Does this mean there are some aspects of conduct that they can't control.

Veronica:

Welcome to the elephant in the room. This is the podcast where we love to talk about the big things in property that never usually get talked about. I'm Veronica Morgan, real estate agent buyer's agent co-host of Foxtel's location, location, location, Australia, and author of auction ready.

Chris:

And I'm Chris Bates mortgage broker. Before we get started, I need to let you know that nothing we say on here can be taken as personal advice. We always recommend you engage the services of a professional.

Veronica:

Don't forget that you can access the transcript for this episode on the website, as well as download our free fall or forecast report, which experts can you trust to get it right? The elephant in the room.com.au

Veronica:

Four and a half years ago, Joe Cooper went to NCAT against her building because she wants to be a 14 year old dog to be able to live with her and partner. And I wonder if she ever thought it would go as far as it did, and she'd become a trailblazer for all those who want to live with the animals in our strata complex. So now there's a ruling doesn't mean that every would be pet owner. I can rush out and find a Rover to bring home. And we're joined today by our friend and fellow podcaster, strata lawyer, Amanda Farmer, to help us put all of this into perspective. Amanda has flagged with us that the Cooper case has it's become known, has some broader impacts on Strata building's ability to make bylaws that regulate conduct. And there's a lot of opinions flying around at the moment. Some more accurate than others. She says, plus lots of questions coming in from purchases and want to be pet owners such as does this mean that the building's ban on pets is now illegal. Amanda, thanks for joining us today. Before we take all that question, can you fill us in on the details behind this ruling?

Amanda:

Yes, I can. Thank you for having me on the show here today. It has been an interesting time in strata. The last month, this decision came down from the highest court in New South Wales, the court of appeal, and it came down on the 12th of October. So a little while ago, from when we're recording this and it has been in the media a lot. It had been in the media before it came down. Joe Cooper had last year been told by the lower levels of our tribunal here in New South Wales, that her buildings ban on the keeping of animals was illegal and that she could keep her dog Angus in her apartment. Her building had appealed that decision to the tribunal appeal panel. The appeal panel had overturned the decision so said, no, you can have bans on the keeping of animals in apartment buildings. No problem with that. So, um, poorl Angus was then going to have to be shipped out Joe thought. Uh, but as you say, Veronica, she took on this case as a, as a trailblazer, as an advocate for all of those pet lovers animal owners in strata. And she took it all the way to the court of appeal and challenge that tribunal decision and the court of appeal has said that a bylaw that imposes a blanket ban on the keeping of animals in a strata building is invalid because it is harsh unconscionable or oppressive. And we can't have bylaws that are harsh unconscionable or oppressive in new South Wales,

Veronica:

Which is good. Of course you don't want harsh unconscionable or oppressive, anything really do up.

Amanda:

That's right.

Veronica:

I mean the blanket ban, I know I've read many bylaws on pets. Um, it's something I do, you know, just out of curiosity when I'm not really out of curiosity, when I'm actually evaluating properties, I do look at the bylaws, um, of each building and you know, you read very many of them. There's, there's some that allow for it, um, on certain circumstances, et cetera, et cetera. But the blanket bylaws basically saying no pets under any circumstances. Um, I also read one recently that I thought was blankets are basically saying you can have a goldfish or a guide dog. Would that be termed blank?

Amanda:

Yeah. And these are the kinds of questions that are coming through these pet bi-laws come in all shapes and sizes just as our pets do. And some bylaws say, yes, you can, you can keep a fish. You can keep a one small dog. I see those. You can keep a one cat. You can keep, um, a reptile in a tertiarium, something like that. So that's not bylaws out there. Um, so they're the questions I'm getting now. What about those bylaws? Well, first of all, we have never been able to ban assistance animals. So that's what we used to call guide dogs. Our previous legislation said, Guide dogs now says assistance animals, any bilaw that bans assistance animals has always been illegal. So they've always been safe. Uh, and that was one of the points that was made in the Cooper case. You know, there, there is no way that a building can ever be legally 100% pet free.

Amanda:

If somebody has an assistance animal, then they're allowed to have that animal living with them. Um, bylaws that then have, um, a limited ban. So banning certain types of animals or numbers of animals. Well, what the court of appeal decision means in my view is that the buildings that want to impose those bylaws have to explain how it is that they're protecting or, um, how it is that the bylaw protects other residents and their interest in their own property and the common property. So a big point that the court of appeal made is that a blanket ban, um, doesn't do anything to improve, uh, the use or the enjoyment by other residents of the rest of the property. The only thing a blanket ban does is makes the administrative process of deciding whether someone can have a pedal not easier on the committee. And that's not a good enough reason to have a blanket ban.

Veronica:

I'd probably just laugh at that because let's face it. You know, you've been on a strata committee, the owner's corporation on the committee, and I have too, and I think a lot of people on the committee would say, Oh, anything that makes decisions easy would be a good thing.

Amanda:

Yeah. Yeah. And so many buildings are saying that to me saying, Amanda, we have this blanket ban. You're telling us now that it's probably a good idea to change that to an application process so that we're using our discretion and we're considering each application on its own merits. Is this a dangerous dog? Is there a reason why this particular owner in this part of the property shouldn't have this dog? Well, you know, you're asking us to employ some brain power here to have meetings and have debates and to think about things we've got other volunteers, we got other things to do. Uh, we're not trained in this. We don't know if we're making the right decisions. So that's why we just took the easy option and had a blanket ban. Well, the court of appeal has said, no, not good enough. You need to think about whether what you're restricting is really going to have a material impact on other occupies. And if it has no material impact and the court thought that the keeping of, of Angus had no material impact on anybody else, then that bylaw banning that activity is going to be harsh, unconscionable or oppressive and therefore illegal.

Veronica:

So, and you can sort of, you know, it's good to have clarity, of course, because I know that certainly with the first, sorry, it was, it was the end cat ruling, which was correct. And then the next ruling was against her. And so then it was like all these people that potentially were living with their pets. Yep. Illegally and now of course, um, it's ruled that those bylaws are unconscionable and reasonable, et cetera, but that doesn't necessarily automatically mean that every pet is allowable, correct.

Amanda:

That's right. Yes. So this is a decision that only relates to Joe's building the horizon Building only relates to that particular bylaw and the way in which that particular bylaw was worded, this decision doesn't mean that all blanket bans are illegal or necessarily invalid only the tribunal or the court can decide whether a bylaw is invalid or not. Um, but what it does mean is this, if you're in a building that has a blanket ban and he's in the same or very similar terms to the one that the horizon has, and you can see the wording of the bylaw in the decision, it's quite a common one. Then if you have someone who is keeping a pet and you're on the committee and you say, well, this is in breach of our blanket ban. Let's take this person to the tribunal. Let's enforce our ban against them.

Amanda:

The tribunal is going to say that they are bound by the rules of precedent. They're bound by the decision of a higher court, which is the court of appeal. And they must make the same decision in respect of the same bylaw that the court of appeal has made. And they're going to declare that bylaws invalid for the same reasons that the horizons bi-law is invalid. So that's why, uh, we've been telling buildings that if you have these blanket bans in place, then you really need to consult with a strata lawyer. You need to consider changing the terms of that bylaw. And what I personally recommend is that application process, where somebody can keep an animal if they have the approval of the owner's corporation and the approval is given on certain conditions and the conditions can be about noise and mess and dirt and damage and governing all of those outcomes of keeping the animal, but certainly not governing the fact of keeping the animal that's where the ban, the blanket bands have gone wrong.

Veronica:

Now, then you're getting to bit of a murky waters. Don't you, as you said that a to strike the owner's corporation strata committee have to start thinking, um, they have to start thinking about the implications of having a pit, um, in the property in the building are, um, this size, as she said, there's noise, there's smells and other things that go with pets. Um, there's an amount of pets, the number of pets, the type of pit, the size of dog, the size of cat, whatever. Um, so does that mean that there's a potential for more bylaws to be challenged because people will, you know, the building may come up with a bilaw of that sort of has, uh, requirements that under certain decibels or whatever, whatever requirements, if there's that sort of open up to, well, the requirements are onerous. Um, yeah. I mean, where does it, where does it end?

Amanda:

Yeah, it could well open that up. Um, and this is, I think the reason why a number of buildings have wanted to avoid in training this kind of a process in their bylaws. Because if we start using words like the committee, when considering an application must act reasonably, or the committee must not unreasonably refuse the approval, or we have to have reasonable conditions, then of course, we come to the, the age old, um, difficulty at law that lawyers and courts have grappled with for years and centuries is what is reasonable. You know, how do we assess what's reasonable? What somebody says is reasonable in one context may not be reasonable in another. Uh, and I do believe that we will start to see that play out more before the tribunal in new South Wales, in cases about, um, whether conditions that are imposed are reasonable, whether consent has been reasonably given or unreasonably refused.

Amanda:

Absolutely. Um, but the other thing to bear in mind is that if we look at a state like Queensland, um, well they've resolved this issue a long time ago and they, they don't have pet bans. Um, they can't have bylaws that are unreasonable. Um, their threshold is lower than ours. We can't have bylaws that are harsh unconscionable or oppressive. That's quite a high threshold. And that's why it's taken a bit of time for our, to get this decision from our court, explaining what those terms mean. Um, Queensland has always had in their legislation, no unreasonable bylaws, and we have to act reasonably and, um, they seem to be doing okay up there, particularly when it comes to pets. It is not at all the issue that it has been here. And, uh, I think ultimately legislative reform here in new South Wales is where we'll end up amending our strata legislation to make clear what we can and can't do about animals.

Veronica:

I laugh because I guess what we are skirting around the edges of, he he's, you know, they, all the law is an ass . You know, this is that idea that you've got this system where you have a normal pass. So your new legislation passed in 2016 and then you have to have human beings basically, um, enter into conflict with each other in order to actually test that law, to make sure there's are holes in that law. So that then, uh, there's clearly, uh, judgements or clear rules that people know. Um, and so now I've had it what, four years later, but even then there's stlll more. It's like it obviously it's, uh, you know, you got into a good, a good area of business. There is going to be no shortage of advice required. I would think.

Amanda:

Yeah, look, um, it's always busy and in many different respects and there is now at the time we are recording this, there is some draft legislation before new South Wales parliament, um, proposing to amend our 2015 strata schemes management act to include a provision that bylaws cannot purport to unreasonably restrict the keeping of animals. And that's something that has been, uh, an amendment that's been put forward by the animal justice party, uh, off the back of Joe's case. And I know there's, uh, a lot of people supporting that kind of amendment, others are saying that it's, um, too little too soon, we need a wholesale review of the strata schemes management act, not just this small amendment about pets. Um, but even the court of appeal has said that much of the language in these sections of the legislation we're talking about is awkward, um, for a court to make that criticism, they're really sending a message that we need to do some work here. It's a lot of time, a lot of money being spent by owners, um, in conflict about these issues. And when that happens, it tells us there's something not right about the legislation.

Veronica:

Well, yeah. When did you start the podcast?

Speaker 3:

The podcast started in 2016,

Veronica:

Right? So, and that's Your Strata Property for anyone who hasn't listened to it? I highly recommend you do, particularly if you own or live in strata or considering owning and strata, um, and actually put the, the link in the show notes to your interview with Joe Cooper, herself and her lawyer. Um, but I remember listening to your podcast in the early days. That's why I thought, I just wanna double check that it was back then, because what struck me is the amount of times you referred to interpretation, my interpretation, as you have untested, you know, I'm putting words in your mouth there, but at the time, listening to that thinking, Oh my God, what a nightmare. This has meant to clarify, I think, and yet clearly hasn't, um, which is, you know, from a, this is a property podcast. We talk about the Elephant, the Room, things that people don't talk about. But one of the things about Strata is that I just, my understanding is talking to a lot of people. There's a massive misunderstanding about how to live in strata and what it means. And, and it is really the fourth layer of government, right?

Veronica:

So, so therefore understanding what you can and can't do is pretty critical to making sure that you actually enjoy your life in a strata building.

Amanda:

Yeah. And a lot of people go in feeling like they do understand what they can and can't do and feel like they know they have to pay levies and they know they need permission before they renovate. And they know that they can keep an animal or can't keep an animal. And then suddenly there's these cases. And then what does that mean for the bylaws and what I can and can't do. And this is the part that from a lawyers perspective, um, I'm fascinated by, and I love this area of the law, um, for that reason that it is ever challenging, ever changing. We're dealing with people's lives, different ways of living different, um, community expectations, cultural expectations. And we see that filter through in the law, but I understand completely how frustrating that is for owners for residents. I'm a resident in strata myself. Um, so when we have cases like this, that completely turn the law around and say where we could have bands, we can no longer have bans and it starts to raise questions then about, well, can we ban? Short-term letting can my building tell me that I can't have hard floors. Cause there's a lot of buildings that do that, is that unconscionable or oppressive? Can we ban smoking? There's a lot of billings we want to ban smoking. So it just a decision like this just opens up all of that uncertainty and yeah, it, isn't an unusual, very unusual part of the property world, for sure.

Veronica:

Well, it is. And this is some of the things that, uh, you know, I'm glad you raised them there because these are some of the things I want to talk about that you have to have controls in place because you are all living together. Communally, you know, there might, you might have your own space, but for instance, smoking is a good one. You smoke on your balcony cause you don't want to pollute your own apartment. And yet then you end up polluting the people around you are impacting on the people around you. If you have a pet that barks, when you're not there, you don't even know about your neighbors. Start going, stir crazy. Um, you know, you, you talk about a lot of these issues, you know, my girlfriends, um, she's on the strata committee and you know, it has been the parking and the residents, parking visitors, cast by all as typical things that people complain about.

Veronica:

And they probably think, Oh, you know, dragon on the, on the strata committee. But the reality is there are rules for reason that facilitate whole bunch of people living together in the same sort of area. Right?

Amanda:

Yeah.

Veronica:

How do you fill those through to, you know, that want to preserve, um, I guess the, the high standards, you know, because let's face it, some people are really crappy with their garbage or some people are really crappy with animals. Some people are really disrespectful of other people. How can you preserve that without being termed harsh, unquenchable unreasonable.

Amanda:

Yeah. I think you have to be constantly asking yourself the question when we're talking about a bylaws in particular and we can go a bit broader, but bylaws in particular, what I say to my clients is what job is this bylaw doing? Okay. It's really important as a committee, when we're thinking about drawing up bylaws or changing bylaws that we ask ourselves, what job is this bylaw doing? And does this bylaw have the job of improving life or for residents who are living here or resonance, doesn't have the job of increasing or maintaining the value of our investments. So we're talking about bylaws that regulate what we can and can't do with our property. When it comes to renovations, is it a bylaw that is improving or preserving the way of life or the value of your investment for all owners? And I think if you can answer yes to that, then your is going to be on pretty safe ground.

Amanda:

If your asking the question, what is, what job is this bylaw doing? And you're saying, well, it's making the job of the committee easier because it means we don't have to exercise our discretion to make a decision. And it is, it is catering to the lowest common denominator. Then I think you are going to have a problem with your bylaws and that's where blanket bans have fallen down. Um, but speaking more generally, I have always said, uh, the number one thing that I think dramatically improves apartment living is to have a very good strata committee. So these are the, the volunteers, the small group

Amanda:

Of owners they usually are, who deal with the day-to-day management of your building. Um, I see a lot of great buildings. I see a lot of very dysfunctional communities and in the dysfunctional communities, making bad decisions, whether that's about bylaws or anything else, um, they have a committee that is internally in conflict. There are factions within the committee. Some people want one thing for the building, someone, others, uh, the dysfunctional communities don't take the advice of their strata manager or even the strata lawyers sometimes. Um, and the ones that function really well, they are intelligent people with life experience, um, committed to improving the community or the value of their investment if they don't live there themselves. Um, and they're just the hard workers, you know, the, the champions for the cause, whatever that may be in a building from time to time. And those are the communities that are really thriving.

Amanda:

And if you're looking to buy in to a good community, have a look at how the strata committee is functioning.

Veronica:

It's so true. And, and you, and I've had conversations around this. I went back in episode 25, you first joined us and we did talk about that. Um, and you know, trying to find evidence that is always a challenge because of course, strata reports, which is what most people get before they buy into a strata building. There's no real standard, uh, that applies to how those things are put together or what they report on. And you said many times, you know, go and talk to the neighbors. That's a great idea. Um, and also read the email correspondence. I have to say, even though I asked for it, you just don't get it. You just don't get it. Um, it sort of slips in by accident if it, if it gets into a report, but what's so interesting.

Veronica:

I find a new talk about the science of a dysfunctional, uh, strata comedian. I think they're really good things to pick up on the faction. Certainly the, um, you know, not taking advice, but then there's buildings where there's complete and out of disinterest in the building. Yep. And, uh, recently read a report for instance, where, you know, they just got some, the strata managers pretty much left to run all the meetings. Um, she's pretty much, uh, you know, there's, there is a committee, but that turned out most of the time that I do proxies. They don't, you know, they just to run the place without much guidance. I very much doubt they're paying her enough to do that properly because strata levy the actual fees that these strata majors charge, they're not massive are they.

Amanda:

they are high enough for the importance of that job. That's for sure. Yeah.

Veronica:

Yep. So, and therefore the strata committee needs to actually do work because they're starting to measure it literally isn't paid enough. Yeah. It does make the question. Doesn't it as to how do you really work out? How a building as well? I don't know. Yeah. I look, there's all types of buildings,

Amanda:

You know, all, all shapes and sizes. We can talk about a four story, red brick walk up where we have maybe mostly investor owners and we're near the university. And, um, people come and go, there's not too much going on. There's no lift, there's no gym or swimming pool. We just have some, um, outdoor parking area. And that's about it. That may be your, um, old fashioned style of strata management. You might have, uh, someone who's fairly hands-off. You might have an AGM each year because you need to strike levies according to the law, and you need to approve the financial statement, but otherwise there's not too much going on. And then you have, um, your brand new building that might be 200 plus lots. You might have a commercial mixed with a residential. You then have a building management committee. You have shared facilities between the commercial and residential.

Amanda:

You have building defects, you still have an original builder and developer to negotiate with. You have maintenance contracts, you have a building manager, a caretaker, um, you're dealing with a new set of bylaws put in place by the developer where certain people have been given rights over the common property and others haven't. These can be incredibly complex schemes and you need a strata manager who is experienced in managing those kinds of schemes. So I think understanding what you're buying into, um, and why, you know, am I going to live there or is it an investment? Am I buying in the four story, red brick walk up because I just want to put a student in there, close to the uni and take my returns. Um, he might not be too concerned about what the community is like and the strata manager, but a building at the other end of the scale. I think you need to be very concerned and understand what's going on, who the players are and why they should be the most experienced.

Veronica:

That's it. And it's so complicated. And, um, and I would also argue the, uh, the three or four story walk up, walk up, you do need to be worried about community they achieve. Cause that's actually sort of good for, for resale. Yeah, but certainly there are a lot of investors sort of, they want the hands-off they want the low strata levies that they come with. That

Veronica:

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Veronica:

Recently there's been a requirement for buildings to consolidate their bylaws, right?

Amanda:

Yes. So when our new legislation started, as you said, Veronica, that was in 2016, there was a requirement to conduct a review of bylaws within 12 months of the legislation starting and immediately there was a requirement to keep a consolidated up-to-date copy of the bylaws on the record,

Veronica:

Which interestingly enough, I still come across buildings that haven't done that, um, there must be two and then some others where they've actually gone and got a slightly, they bought a consolidated pack of bylaws off the shelf.

Amanda:

Yeah, we, we do model bylaws in our legislation, which is often what developers will register strata plans with when they constructed and then they're selling off the plan. Um, and we got a new set of model bylaws when our new legislation started. And I saw that too. And number of buildings just adopting the new model, bylaws, not really thinking about whether they're suited to their community or not, or whether they might've needed, um, anything extra in addition to the model to deal with, um, their specific situation. Um, you know, it's something that strata lawyers, uh, do a lot of BI-Law reviews, drafting of bylaws. Um, some buildings don't want to spend the money on having that process done bespoke for them. So, um, just grab the template in this ledge, in the legislation and hope for the best. Um, of course penny-wise, pound-foolish, pound-foolish you then end up with the litigation down the track, challenging the bylaws, uh, and it can be a situation that could have been avoided if you had some specific advice earlier on.

Veronica:

So if we come back to the Cooper case, I mean, that was at horizon. So for any listener that doesn't sort of know what that building is. It's sort of somewhat famous because Harry Seidler designed it and, and some people say that it should never have been approved because it's very, very tall and exceedingly tall compared to the neighboring. buildings is in Darlinghurst and it has, most of the floors would have incredible views as well. Some pretty amazing Harbor views. And I think temp penthouse recently sold for $16 million or something. Um, so you know, a lot of people in that building probably have, um, a lot of money behind them, right? So you're in a building that you would like to think has a potential to have a good, healthy capital works fund forecast can afford to run the litigation. Um, but that wouldn't always be the case, would it?

Veronica:

And, and also, you know, I don't know Joe's individual circumstances, but, you know, I hope she was bankrolled by a whole know a bunch of other people that wanted to get their pits approved. Two is you didn't have to really pay for it all yourself, but you know, litigation is expensive, right? So if you've got some, some budget bylaws that are that open up the buildings, um, or give opportunity, I guess, to be challenged, um, or if you're in a building and live in a building where you've got a lot of very, you know, you've probably a lot of judges lawyers and all the rest Of it living in horizons too, for them, you know, are you a bit unmatched because of that?

Amanda:

Yeah. It's a complaint that I hear a lot from owners who might want to challenge the position of their billing, whether that's in relation to pets or maybe a renovation that they want to do that hasn't been approved, there's always avenues for challenging decisions. Then our buildings may or may not make, uh, about what particular owners want to do. Um, but owners will say to me, Amanda, I can come to you and you can tell me, I can try it off to the tribunal and challenge the validity of the bylaws or, or say that the decision to reject my renovation was unreasonable and seek an order. But that's going to cost me upwards of about 20 grand to run that case from start to finish with a specialist strata lawyer.

Amanda:

Um, that is a significant expense for me, a single owner and the owner's corporation. The building is going to engage their own lawyer. Um, if they are defending my proceedings, they may even be covered by insurance because buildings have legal defense insurance policies. So the insurer might even pay their lawyer before defending the application. And if they're paying it themselves well, you know, that's, their costs are spread across 20 plus 50 maybe owners. And it's just a few dollars out of everybody. Else's pocket a month. It's nothing to them and they will keep going. And, uh, I will be the one who's forced to settle or to withdraw. So you know what, it's not even worth it. I'm not even gonna go there. So yeah, I definitely hear that about that mismatch of financial situations and a perceived mismatch of power for sure.

Veronica:

Which is something that when I started this conversation, I hadn't really thought of, but as often happens when we're having chats for the elephant in the room, we uncover the bigger elephants, but also on the renovation side of things, let's have a big talk about, cause it's on topic.

Amanda:

I mean, you have to get bylaw registered, um, whenever or a special bilaw, right? Um, whenever you want to get renovations approved on your loss, yes. Depends on the extent of your renovation work, but major renovations affecting waterproofing, structural alterations or affecting the external appearance of the property will need a bylaw.

Veronica:

Yeah. Um, and some are red, you know, obviously they're gonna change for coverings. You mentioned that before. I mean, a lot of buildings will actually say no timber floor coverings, even if they are battered. Um, you know, so you've got to look to noise transparency. And I think too, we've got to be considerate when I live in strata anyway, regardless. Um, so what, how did, what does somebody do if they bought a property thinking, well, you know, it's rundown, these are new kitchen and bathroom for argument sake I can knock that wall out and I put it up and these are all the things that I get clients and buyers saying to me all the time are you could do this, you can move the, you could do this,

Veronica:

You can do that. I think to myself, well, it's not that easy in a building. You've got plumbing stacks, you've got, you've got, you know, services that you've got to consider and you go, Oh, there's a lot more to, to take into account. What have you heard any situations or what are the, I guess, pitfalls and things to be aware of for somebody who is buying, thinking, they're going to just get a renovation approved.

Amanda:

Yeah, I think definitely if you haven't bought yet, and you're looking for that property that you can do up once you're in there, I would be looking at properties where renovations have been done before in the same building. And you can pinpoint an apartment or two in the building where they've done exactly what you want to do. So if you want to, um, con combine the laundry and the main bathroom to make a large bathroom or tank change the laundry into an en suite, for example, that kind of thing. That's not just, um, fixtures and fittings and brightening up the kitchen or the bathroom. Then if somebody else in the building has done it, then that's a very good reason for the owner's corporation, not to unreasonably refuse consent to your own renovation. So in new South Wales, that's the, that's the test, um, is the owners corporation unreasonably refusing to approve your renovation if they are, then the tribunal can order that your renovation goes ahead.

Amanda:

And the interesting thing to note about that is, you know, we've, we started the conversation talking about pets and bylaws and not being harsh, unconscionable or oppressive. And I've said that's a much higher threshold than this concept of unreasonableness. So I actually think it's much easier to get a renovation approved because all you have to do is say that the owner's corporation is being unreasonable. That's much easier than getting a pet ban or was until this case, a pet ban or another bylaw that you might say is harsh. Getting that overturned. That's a harder job. Um, but definitely buying into a building where you can see the work has already been done is, is a really good idea. That's what I would be looking for. Um, and thinking about, as you said, being considered of your neighbors, are you planning a, I had a client recently, who's planning to completely reconfigure the layout of their apartments.

Amanda:

So they want to put their living and kitchen area above their neighbors, bedrooms, where, you know, building's been designed this way for a reason. And when I looked at their plans, I had to say, all right, okay, well, I'll help you drop the application. I'll drop the bylaw, but I just wanna let you know, it's a pretty good reason to refuse permission, um, to, because you're changing your layout and you're now going to be living day-to-day above somebody's bedroom. I said, if, if the owner's corporation rejects it for that reason, I think they're going to be on pretty good ground before the tribunal. Um, so it's, it's a case by case basis like that, but yeah, thinking about the impacts that you're going to have, what other people in the building have done and been allowed to do and what protections you're giving the owner's corporation. So are you giving them a complete indemnity, should anything untoward arise out of your renovation? That's why we have the BI-Law and we have, um, clauses in there that give the owners corporation all the protections they could possibly want. Um, cause they're doing us a favor giving us permission. So we're going to make sure that we look after them too.

Veronica:

It's it's funny. You talk about that example of somebody who wants to, you know, flip over the layout. And I immediately think, well, if there's somebody above them, that means are living risk and move up, then you bet. Um, but it is true and say, you know, often we go around and our own little bubble thing, Oh, do this, we'll do that. Does it, you know, I often hear people in looking at, um, you know, inspecting properties, they're planning things out. And I think to myself, Oh, absolutely. Your out in the world, he's not really thought about the implications on others or whether you're going to get it through. But I guess when it comes to the renovation side of things, and when you talked about the bylaws, you know, those questions that, that an owner's corporation ask, you know, are these, I should have written them down, but you know, what job is is bi-law doing? I think you said, and, and how is it affecting, how is it improving everybody? Does it need to be to a renovation improve everybody's life?

Amanda:

It doesn't uh, well, yeah, that'd be, it could be an argument there that we're, um, improving the standard of the building and attracting curriculums throughout community. Um, but it doesn't have to because that's it, that's where, um, that differences between harsh unconscionable or oppressive bylaws, you can't have those. Um, but you can have a renovation works by law that is specific to a lot that gives you the special privilege to alter the common property and the owner's corporation can't act on reasonably in dealing with that bottle. So there they're dealt with in two very different parts of our legislation and dealt with in two very different ways. Um, and I find that quite fascinating because it's, um, it's almost like there's two standards in our legislation and I, I don't see anybody yet grappling with that, but I think we may, in the future, I can see

Veronica:

It is quite fascinating. And I think to just, you know, you just picking up on something you said in there about, um, changing the common property, because effectively, and tell me if I'm wrong here, but if you say you move things around in your bathroom, the plumbing is common property or what's behind the walls is common property, correct? Yes. Yep. So that's where you are actually modifying common property. You aren't necessarily out in the hallway changing change,

Speaker 3:

Correct? Yeah, you're exactly right. You scratch the surface, all the tiles, the, the paint you are impacting the common property. So that's another big misunderstanding where people say, Oh no, it's not doing it all within my own lot. And then I say, okay, are you lifting tiles? Oh yeah, yeah. Putting new tiles. And also you're going to be rewarded proofing. Oh yeah, of course. We'll do the waterproofing. Okay. You're affecting common property because the minute we go below the surface of the tiles in the bathroom, we start dealing with waterproofing, original waterproofing is common property, and you need the permission of the owner's corporation to touch it. And that makes sense, because if you don't do a good job, if your waterproofing's not right, if you don't waterproof at all, then that's going to have a huge impact on the rest of the building. You have water penetration down to the next level or to the adjacent apartment. And it just keeps going and going. You know, it's, it's something that, um, needs to be regulated at the building wide level, the same with structural alterations, the same with, um, appearance alterations that affect the appearance. And that's why they have that, um, requirement for a bottle.

Veronica:

And that's it. And it's, it is we often talk about, um, when you are in strata, you are in front of the painting and it's a bit hard thing to get your head around because you think, Oh, in that ceiling, I know you don't. And in fact, a lot of light ceilings, for instance, they get all excited about scoping the mic lot off or putting a full ceiling in and not realizing that, you know, that's not as straightforward as what they would hope for exactly. I think that sort of leads the idea of people buying into strata and just assuming that they can do things that they subsequently find that they can't or not without actually signing over a lot of rights or maybe not a lot of rights, but certainly, um, community too, a lot of responsibility, if it doesn't, isn't done well, is something that a lot of people don't understand, which sort of leads us willing to the idea all our, um, Dumbo of the week.

Veronica:

So do you have Dumbo example for us?

Amanda:

Oh gosh, I have a couple I'm I've been debating in my mind, which to bring to you this week. Um, why don't I bring you both arises from, um, a meeting that I had earlier in the week, and I think it's, um, it's an important one to talk about. Uh, but first of all, from the pet perspective, I think at the moment, uh, the Dumbo of the week has to be the building that is saying, we have a plank, a blanket pet ban, but we're still going to enforce it because we don't care where a no pets building. We've always been an no pets building. That's what our owners want. Court of appeal can say what they like, but we're going to enforce it and let the owner who wants the dog take us to the tribunal. Um, that's a dumb thing to do because what's going to happen when you get before the tribunal. As I said earlier, the tribunal is going to say, we have a court of appeal decision here. I'm bound by precedent to follow that decision. And this blanket ban is going to be overruled. And you may have to pay the owners legal costs of bringing case that they never should've had to bring.

Veronica:

before you get onto the second Dumbo. That that is interesting because the thing is that there's until there's a high court ruling, right? There's discretion is that fair?

Amanda:

The bilaw is there. The bilaw is in place. Uh, the BOLO doesn't have to be enforced. So if you say from, from the discretion, um, angle, I would be saying, there is no, there is no law that requires a building to enforce its bylaws. And the committee should being aware of this case, use its discretion and not enforce the bylaws against an owner who may bring a dog onto the common property or onto their lot. Um, what the committee should do is get together and start talking about how they're going to amend their bylaws to reflect, um, what the court of appeal has said. Uh you're right. That until we have legislative change, the, uh, our legislation doesn't say that you can't have blanket bands, but our legislation says you can't have harsh unconscionable or oppressive bylaws. And the court says the blanket bands on pets are harsh unconscionable or oppressive.

Amanda:

So there's a, there's a few steps to think through there, but you end up in the same place, which is you'll eventually have the tribunal or court saying your bylaws invalid. So if you've got a lawyer telling you that, then there's no point, um, going for psoriasis,

Veronica:

it just makes me not laugh, but it makes me wonder, um, why what's the purpose in a way of lower courts, if you just keep taking it right up to the top until you get the answer that are either a or B there's no other courses for appeal.

Amanda:

Yeah. Well, we ha we have a hierarchy. Of course, they're trying to keep business, um, streamlined and not overwhelmed. I wo. uld love to, I love that idea. I would love to go straight to the three, three judges on the court of appeals as smartest people in the country and the legal system, um, to make a decision about my renovation or about my, um, whatever my strata dispute is. That would be wonderful. Um, but unfortunately that's not how it works. The system is such that the, the evidence is put before a lower court that has, um, uh, theoretically the facilities and the time to hear from witnesses, to look at what the facts are, to decide what the facts are. To read everything, to talk to witnesses, ask them questions. Uh, that's what our tribunal is set up for. And it's supposed to be more consumer-friendly to allow that process to happen without lawyers, if that's what, um, the parties want. And then the high levels of the court are more focused on the legal questions. So when we do appeal a decision, usually you can only appeal on, uh, a question of law. So you can only appeal because you're saying the tribunal member who decided this case got the law wrong. It wasn't that they misunderstood part of the facts or that they didn't like a particular witness. They actually got the law wrong. And then our higher levels, um, uh, high level courts decide what they say the law means. What do they think it's supposed to mean and make a decision about the law? Not necessarily about the facts, it's a minefield now.

Veronica:

Oh, my second Dumbo is quite, yeah.

Amanda:

Separate from, uh, animals and bylaws, but we did touch on it a little bit earlier. Strata records inspections. I attended the office of a strata manager just last week and I was doing a records inspection for a client. And, uh, I always send a letter up, setting out that I'm coming, what I'd like to inspect, who I'm acting for and a long list of things that should be produced for me to inspect. And this is drawn from the legislation in new South Wales. What it is that should be made available on a records inspection. And I get there nine times out of 10. Um, what I've asked for is not there, or only part is there. And in this particular circumstance, um, the strata manager came over, sat with me. Hi, Amanda, Hey, going good. Can I help you with anything, anything missing? I said, Oh, yes, I don't have the emails.

Amanda:

There are no emails here. And I'm here to inspect the Record's emails, form part of the books and records. They should be here on the computer screen. I was sat in front of, for me to look at and the strata manager said, Oh, they're in my inbox. I said, Oh, that's good. Well, I'm here to inspect the records. I'd like to see them all, but there's thousands of them. I said, yeah. Oh, you've been managing the building for a few years. Yeah. I imagined there would be thousands. Oh, well, I can't provide all of them to you. I said, Oh, why not? And the strata manager said, because some of them are marked confidential. Oh, why would they be marked confidential? Because the strata committee doesn't want me to put those emails on the record because it's got things about other owners and, you know, they don't want those things disclosed.

Amanda:

Uh, and I had to explain to the strata manager that there is no such thing as privacy in on his corporation records. There's no such thing as confidential communications. There is such a thing as legal professional privilege. So if you're communicating with a lawyer, that correspondence may be privileged, but otherwise the communications between owners, committee members with the strata manager, unless it's a committee member saying, mate, would you like to come to my barbecue on a Saturday afternoon? If it's about the building, it's a record of the owner's corporation and any owner or their authorized representative is entitled to inspect it. So nothing should be withheld. Uh, and my client was specifically looking for communications between the committee and the strata manager, uh, communicating about things that they had withheld that weren't put to meetings. Um, and it's very frustrating that, that, that they have to engage a lawyer, pay legal fees to send me off, to go and have a debate with a strata manager who frankly should know better.

Veronica:

what a classic It's just mortifying, but it does. It reveals so many things. It reveals a level of entitlement, arrogance in competence. Um, you know, God, it's just woeful and that whole, you know, you, and I've had a conversation before about some buildings that are run like cartels, you know, that the owner's court with all the strata committee, um, just seem to think as their show, which is quite phenomenal. But, um, God, look i've read some strata reports recently and there was actually one that was two done for the same building within a month. And I read both of them and you would think they'll have two different buildings. And the claim was that, um, the initial company had sold their business, so sold their, their, their role to another strata management company. And this and the buyer was really had absolutely no idea about records keeping or anything. But I would think to myself, given the way the first one was put together, it looked like I was pretty impressed strata managers in the way that that first report was put together within the space of a couple of weeks, it's all over the shop. And I wonder if, is it really the manager or is it the actual person doing the report? So sometimes it's hard. It's hard to tell.

Amanda:

Yeah, we see that a lot. When buildings transition from one manager to the next that we get told, Oh, well the old manager didn't deliver up all the files. I don't have everything. Oh, I've been asking for that report and it hasn't been forthcoming. Um, there is a real problem with record-keeping when it comes to, uh, strata management offices. You wouldn't think that they're, they should be because there's some great electronic systems, you know, software companies out there doing really well providing solutions. It should be easy enough to put everything in the cloud or on a USB or wherever you want to do it and get it across to another agent. But that really does seem to be where, um, a lot of buildings have trouble keeping their records and making sure that they're accurate when they've had a change of manager.

Veronica:

And on that, and on a final note regarding, uh, bylaws that, uh, you can't always find a complete set of bylaws in Australia report, but you should be able to find it in the contract to sale. Is that correct?

Amanda:

Definitely. Yes. So the, a conveyancer or the lawyer who's putting together, the contract for sale has legislation different to the strata legislation that they must comply with and must include particular instruments in the contract for sale. And that includes all of the instruments that are registered on the common property title. And the beauty of bylaws is that they are registered on the common property title. So should always be attached to a contract and can always be accessed. Um, as an owner, you can always access them by going to, um, land registry services and paying you do have to pay $20 or so for a copy of the registered bylaws. And, um, you can get them one bundle If the building has complied with their legal obligation to validate and lodge, but otherwise they will all be there registered in one form or another. They could all be in separate instruments on the title. You'll get them all there.

Veronica:

Yes. You have to try to trace them all down. And that's it. Thank you so much for your time. I think this is really good, um, to understand what, uh, this legislation would this law, um, or there's court cases should probably should say, has said clearly, and there's not immediate, uh, claim on anybody who wants to own a pet strata. And just to maybe immediately assume that they can have one, but also to have that broader conversation around bylaws and around the ability of a strata committee, uh, and the owner's corporation to control what goes on in that building. So love your insights, love your time that you've spent with us. Thank you very much.

Amanda:

pleasure to be here.

Speaker 5:

We want to make you a better elephant rider. And this week's elephant rider training is,

Veronica:

And Amanda and I were talking about the bylaws you need for renovating a property and the things that you should be looking at, if you are looking to buy a property or strata property, I should say that you want to renovate. And she did say, look to see whether anybody else in the building has actually renovated and done what you want to do. Now, there's three ways you can go about these three or hacks. I guess the first one to look at is it in the contract. As we mentioned, there is a complete set of bylaws in the contract of sale. So go through that contract and look for which apartments, which lots have had bylaws. And they're usually special, um, bylaws that have been, um, lodged and, um, approved for renovation. Now that's going to give you a clue as to who's actually potentially renovated.

Veronica:

They may not have actually done the renovating. And obviously if you are looking at buying a property as well, and the lot directly above you below you or to other side of you, or even opposite you, if they have a bylaw that is registered, uh, for renovation, I haven't done it yet. That's something to pay attention to as well, because you're going to be putting up with maybe a bit of discomfort, sound, et cetera, et cetera, whilst they do that. But by the, by what you're looking for is to say, well, where's the precedent in the building for what you might want to do. So that's the first thing you look at the bilaws and see who else has registered a bottle, um, for renovation. The second thing that you can do is actually get onto domain or real estate to come to you and going the sole property section and see if you can find, um, whether anything in that building is sod recently.

Veronica:

Now often you can, you can look through the photos and the floor plans, you can get a sense of, okay, well, what do they apply? Have they renovated? Have they done what you want to do? So that's sort of one way that's probably the most laborious way quickest way is to actually ask the sales agent and say, look, can you provide me with a list of all apartments? So the last, maybe say the last five years that is sold in the building now, if, and they can do that because they've usually got access to RP data Corelogic in what we want to call us or price finder, they can tell you that. And once you've got those addresses, you can actually want those into real estate or domain, and actually see if he can find the old sales link. Once again, you'll get the photos, you'll get the floor plan and that'll give you some information as to whether anybody has actually went it in that lock previously. And whether they've done what you were hoping to do.

Veronica:

,Please join us for our next episode. We've got a real treat for you. Our economist Saul Estlake, joins us.

Veronica:

Are you going to talk about the future of the economy in Australia in the post COVID world? Are we looking at economic recovery or a new reality? We talk at length about the RBA and banking policy. And, you know, we didn't use the words, the COVID cliff that we certainly were talking about. The long-term ramifications of all the fiscal stimulus and mortgage repayment, holidays, et cetera, et cetera. And we discussed the U S election and the impact on the Australian economy, fabulous insights from a guest who has an intimate understanding of the banking system and the global economy. It's a must listen.

Veronica:

If you're looking to buy your dream home or an investment property in Sydney's inner West Eastern suburbs or North shore, my team, and I can help you by, without regrets, reach out by my website. Good deeds.com.au

Chris:

Looking to buy your first time, thinking of upgrading into a new one, or purchasing an investment property anywhere in Australia. My team would love to carefully guide you on this journey. And most importantly, get the finance right, reach out via our website. www.wealthful.com.aH

Veronica:

If you're a first home buyer and you don't want to miss a step with this most important purchase, join me on Wednesday nights at 7:30 PM. Sydney time on the home buyer Academy, Facebook page for live Q and a check out the website, homebuyeracademy.com.au

Chris:

Every month. My team hosts a webinar on what we seeing at the banks, the best rates, changing policy and their service. We also share the latest insights we hear and read that are impacting the property market direction. Check out www.wealthful.com.au

Chris:

Thanks for joining us we'd love to see you again.

Veronica:

And remember, don't be a Dumbo.