The copy-cat trap: paying for cut and paste by-laws

 

Imagine you have commissioned a photograph of your apartment block from a local artist and they come up with a beautiful image that shows the building to its best advantage, charging you $1000 for the work.

You want copies for your eight lift lobbies so the photographer does eight more prints and you get a bill … for $8,000. Hang on – you didn’t ask them to take eight more pictures.

Would you feel cheated? A couple of readers of the Flat Chat website do.  They’re being charged the same fee for a strata-approved lawyer to “write” exactly the same renovations by-law (or rule) that they’ve already supplied to other residents.

Just to explain, in most states you require a by-law if you are doing a renovation on your home that impacts in any way on common property – and most substantial renovations do.

The by-law is to protect the owners corporation (body corporate) from any stuff-ups during or after the work that they would otherwise have to repair under their legal obligation to maintain common property.

Many strata schemes have a catch-all by-law, paid for by the owners corporation, that covers most if not all of the potential problems and you just sign up for that.

This recognises that most owners are going to want to renovate sooner or later so it shares the expense.  Variations on the norm, of course, would need their own by-law.

Now, getting back to our readers, one of them asked if she could do a renovation and the strata manager told her yes, but she would need a by-law from their lawyer and that would cost $700. You can follow that thread HERE.

Being in NSW, she went to Fair Trading who said she could write her own by-law as long as it was legally sound and fulfilled the requirements of owners corporation.

So she dug out a by-law that had been approved several times for different owners, added her lot number and submitted it for approval.

The strata manager said, that’s fine but the by-law will have to be checked by our lawyers – for a fee, exactly the same as if she’d paid for the lawyer’s own copy and pasting skills to be applied.

It would be over-stating this to say it’s a rort but it’s certainly a nice little earner for the lawyer and possibly the strata manager too.

NSW Fair Trading told us that no, you don’t need to have by-laws written by lawyers but yes, it’s probably a good idea if you do.

So how do you avoid getting caught by by-law copycats? The simplest way is to get your owners corp to have one comprehensive by-law written by competent strata lawyers that will cover most situations – with options to pay a modest fee for anything not covered by it.

Now, since this appeared in the Australian Financial Review, I have spoken to Daniel Linders of our major sponsor Strata Choice (NOT the strata managers involved in this) and he made a couple of valid points.

Firstly, we can’t expect committee members to know if a by-law is legally valid or not, and it may even be outside the scope of many strata managers to understand the nuances of the law.  So it’s only right that when a new by-law is being written, then it should be at least checked by a lawyer.

But he agrees that when the same by-law is being used by a number of owners, then they should share the cost  – and the easiest way to do that is to have a by-law paid for by the owners corporation for all owners to use.

That makes perfect sense to us  because here at Flat Chat we think forcing owners to pay full fee for copy and paste by-laws is lazy and inefficient and has a nasty whiff about it.