Enforcing by-laws: Can the owners corporation impose a fine or penalty?


Let’s use the example of someone repeatedly parking on common property without permission. If the scheme has the model by-laws no one can park on common property without prior written consent of the owners corporation.

I can well understand the temptation to impose a fine on people parking willy nilly on the common property however NCAT has held that this is not within the power of an owners corporation.

The simple reason is that the Strata Schemes Management Act 1996 contains provisions about how by-laws can be enforced. The methods of enforcing a by-law under the Act all ultimately rely on the owners corporation either a) applying for a mediation and if not successful applying to NCAT or b) issuing a notice to comply with the by-laws and if the breach continues applying to NCAT for penalty orders.

Under the current Act (and the Strata Schemes Management Act 2015 which takes effect on 30 November 2016) the NCAT is the only entity with the ability to issue a fine or a penalty for a breach of a by-law. Why is this important? Section 43(4) of the current Act provides that if there is an inconsistency between a by-law and the Act then the by-law has no force or effect to the extent of the inconsistency. As NCAT was the only entity given the power under the Act to fine or penalise lot owners for a breach of by-laws an owners corporation cannot pass a by-law that imposes a fine or penalty.

In a recent NCAT case a lot owner took action to try to recover a charge imposed on her by the owner corporation. The charge was a “parking administration fee” imposed after the lot owner’s tenant had parked on common property without prior written approval (that is, in breach of the scheme’s by-laws). The scheme’s by-laws provided that a the owners corporation could charge such a fee if the by-law was breached. The “parking administration fee” was not a fee to reimburse the owners corporation’s costs; it was an arbitrary amount charged by the owners corporation for a breach of the by-laws.

Although the Strata Schemes Adjudicator had to dismiss the application, as NCAT currently does not have jurisdiction to award damages, the Adjudicator noted that the purported fine set out in the parking by-law was inconsistent with by-law enforcement provisions under the Act and was therefore of no effect. The Adjudicator also noted that the “levy notice” that set out the charge may have itself been in breach of the Act.

The simple answer is therefore no, an owners corporation cannot impose a fine or a penalty on a lot owner or occupier. Only NCAT can.

Note that imposing a fee, fine or penalty is very different to requiring a lot owner or occupier to reimburse the owners corporation for its costs which often happens with false alarm callout fees for the fire brigade.

12 responses to “Enforcing by-laws: Can the owners corporation impose a fine or penalty?

    • Hi Bec, It varies from scheme to scheme, wheel clamping bylaws are one option but there are grey areas with this. Other options are using technology to control access or monitor parking areas, perhaps licensing agreements with your local council and the traditional (and I expect about to become more popular with changes to the penalties) means of a notice to comply followed by NCAT action.

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  4. Dear Allison, Good Evening.

    I read from your answer: The simple answer is therefore no, an owners corporation cannot impose a fine or a penalty on a lot owner or occupier.

    I am what you may label as a serial parker on common area before (I will come out clean), but I’ve had my share of keeping my peace with the SC by parking correctly and appropriately. Its just funny that I am riding a motorcycle scooter, nevertheless, it is still a vehicle

    I was charged more than $1000 for each event in total (around 6 or 7 times) within the span of 5 months. I want to know without disrespecting the SC what are my options on this? I once tried to get the pulse of the general community of home owners in public chat but a member of the SC banned me because i was rude. I can even show you in a screen cap that i was not. I was just asking my fellow residents if they would have had an invoice due to illegal parking and will be discussing our options thru remediation or worse, an NCAT action.

    Mind you, I even offered to pay for a portion of these fines due to humane reason of reduced income due to this pandemic. The SC promptly defeated it; It kinda feels that they are sourcing this as good revenue.

    I can even mail you a copy on the invoices they issued. Sometime, i do feel the technicalities (e.g. indicating i illegally parked on the 17th and the photo was on the 18th, or putting lump sum like 3 illegal parking incidences plus photo then sent in our email = $330) are a venue to argue, but I would just want to get your insight on such.

    My last card is this, I do not want to pay for these fines because I was not issued a “Notice to Comply with a By-Law” a golden nugget I found in https://bit.ly/3d8R8Sf . Would you approve of this reason?

    Lastly, Again, I am happy to pay for breaches at only to the best of my financial capacity now. I have forwarded them our family’s reduced income letter from my wife’s company and told them i am awaiting my BAS for this quarter to show that the ravaged ride-sharing industry has a dire effect on our financial position.

    Thank you for taking your time to read.

    Kind regards, Jake

    • Hi Jake. In NSW any penalty orders would be issued by NCAT not directly by the owners corporation. If they were issued by NCAT then there is little that you can do. If they were issued by the owners corporation under a by-law then the “fines” would be open to challenge. If you are in NSW or the ACT we can assist with legal advice which is quite frankly what you need. However, I note that finances are an issue for you and we do not undertake pro bono work. You may want to try some of the legal centres Newcastle Uni has an excellent program, Macquarie Uni also used to although I think they may have changed their mind. Alternatively, you could go to the NSW Law Societies web page and search for pro bono lawyers. Best of luck. Allison

  5. We have a recent renting tennent that has already been issued an infraction for smoking, they have now recently been seen walking 2 dogs one of these was off lead in common areas, and they never asked permission for either in the first place. That’s 2 infractions in my opinion. so we will be issuing an infraction about the dogs. At which point can we fine them and how do we go about it? They just don’t care about our strata rules.

    • Hi Tel, in NSW the owners corporation has no power to fine an owner or occupant who is in breach of the bylaws. The owners corporation can however issue a notice to comply and then apply to the NSW Civil & Administrative Tribunal for it to impose a penalty order.

  6. Hi Allison, thanks for the article.
    Firstly, can i get the case name relating to the legality of fines being disguised as “admin fees”?
    I am facing a similar situation but with a by-law that explicitly states the purpose of the admin fee is to reimburse the OC’s cost in “issuing the removal notice”. Do you think that is sufficient to render the bylaw legal?
    It seems to me a cost of $165 to issue a letter is fairly arbitrary, despite what the bylaw claims.

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