This page outlines the methods of dispute resolution for parties involved in the management and ownership of properties that form part of a community, precinct or neighbourhood scheme.
On this page:
Disputes that can be resolved by the association
Common issues and disputes that can be addressed by associations include by-law breaches, inappropriate use of common property, and concerns regarding the facilities managers and managing agents.
Associations can set up their own internal dispute resolution process to deal with multiple minor disputes.
By-law breaches
If a breach of the by-laws contained in the management statement has occurred, an association may pass a resolution to issue a notice to the owner or occupier of a lot in the scheme requiring them to comply with a specified by-law. Notice must be given in the form approved by Fair Trading.
If the person continues to contravene the by-law, the association may apply to the NSW Civil and Administrative Tribunal (Tribunal).
If satisfied, the Tribunal can order a person to pay a monetary penalty if the association gave notice to the person requiring them to comply with a by-law, and the person has since contravened the by-law.
Complaints regarding managing agents and facilities managers
Managing agents are required to comply with the Property and Stock Agents Act 2002, under which they hold a strata managing agent’s licence, as well as the community lands laws.
If a managing agent or facilities manager does not comply with their responsibilities under their agency agreement or the community lands laws, associations may apply to the Tribunal for an order to settle the dispute, which can include termination of the agreement appointing the managing agent or facilities manager.
If associations believe that the managing agent may be in breach of its obligations under its licence conditions, the association can make a complaint to NSW Fair Trading for further investigation.
Mediation
Mediation is an informal negotiation with a neutral mediator to help reach a beneficial settlement.
Fair Trading provides a free mediation service, which often assists in achieving a resolution without needing to resort to more formal and costlier avenues such as the Tribunal or courts.
The mediator's role is to:
- help identify the issues in dispute, and
- assist the parties to raise and consider ways in which the issues may be addressed.
The Commissioner for Fair Trading can dismiss an application for mediation on the basis that it is frivolous, vexatious, misconceived or lacking in substance.
Tribunal hearings
When are Tribunal hearings used?
If an issue is not resolved by mediation, an application can be made to the NSW Civil and Administrative Tribunal (Tribunal).
If you have a matter in the Tribunal, you should attend the hearing. If you’re unable to attend in person, you can request a telephone hearing or present your case in written form.
Certain applications cannot be accepted by the Tribunal without the parties attempting formal mediation first. However, the Registrar may agree to hear the matter if one of the parties has refused to participate in mediation or the Registrar considers that mediation would be inappropriate in the circumstances. These include:
- appointment of a compulsory managing agent
- allocation of unit entitlements
- access to a lot to inspect or repair common property
- penalty disputes, or
- inspection of association records.
More information about Tribunal processes, including how to make an application is on the Tribunal website.
Legal assistance
Does my association need approval to hire legal services?
The association can hire legal services without approval if:
- urgent action is needed, and the cost is no more than $15,000, or
- the cost is under $3,000 for non-urgent action.
Approval is not required to:
- get legal advice before commencing legal action
- take legal action to recover unpaid contributions, interest on unpaid contributions or related expenses.
When estimated costs have been provided, the association must give a copy to each member and association committee member within 7 days.
A community association or precinct association cannot levy costs brought against it for an order by the Tribunal on:
- another party who is successful in the proceedings, or
- a subsidiary body of which that other party is a member.
A neighbourhood association or strata corporation that is unsuccessful in proceedings cannot pay costs from its administrative fund or capital works fund. Instead, those costs may be levied only to lots as specified in the order.