The Victorian Civil and Administrative Tribunal (VCAT) has found that Owners Corporation special rules purporting to prohibit ‘illegal’ behavior, a relatively common formulation of rule, are unlawful under the legislative regime created by the Owners Corporations Act 2006.
In Owners Corporation PS425500K v Lim & others the Tribunal considered a rule created under the previous legislative regime which sought to prevent the use of a lot or common property ‘for any purpose that may be illegal’. The Tribunal found the rule was ‘too broad and vague’ having regarding to the specific power to create rules under the Owners Corporations Act 2006. The Tribunal confirmed that Owners Corporation special rules cannot be inconsistent with the 2006 enactment, and determined that the relevant rule was ‘invalid’. Accordingly the Tribunal declined to consider the legality of the respondents’ conduct in the case and found against the owners corporation.
Many Owners Corporations have special rules which pre-date the commencement of operation of the Owners Corporations Act 2006. Where existing rules are inconsistent with the current legislative framework the rules are invalid. Owners Corporations should consider reviewing rules to determine consistency with current act. This will avoid the costs and administrative burden associated with failed enforcement.
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