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How Does a Body Corporate Change its By-Laws?

how to change by laws

With the sheer number of Bodies Corporate on the Gold Coast, it’s probably not surprising that the need to change a bylaw occurs quite regularly. But how is that change done?

In this podcast, Elisha Hodgson, a lawyer at OMB Solicitors, who specialises in both strata and dispute resolution discusses the topic.

Dan: Elisha, it’s probably an obvious question, but where are these bylaws located?

Elisha: Basically with the Body Corporate bylaws, they’re actually established when the first registered community management statement, which we called the CMS, is lodged with the department of human resources and mines. Now, this document is not only really important in that it records the bylaws of the Body Corporate, but it also records important details such as the legislation it’s governed under, the Body Corporate assets and the common property. And also the interest schedule lot entitlements. Now that probably sounds a little bit unfamiliar to most people but, if we use the analogy of I guess, say a company. A company is actually quite similar to the way a Body Corporate works, in that just like a company, it’s run by directors for the benefit of the shareholders. And similarly, a Body Corporate is run by its committee for the benefit of its lot owners. So when I start talking about interest schedule of lot entitlements, what I actually mean is, if we go back to that company analogy, it essentially means the shares which you own in the Body Corporate.

Elisha:  So the CMS is a really critical document, and given we’re talking about Body Corporate bylaws, I think it’s important to know where they come from, where you find them and why you need to know about them and how to change them.

Dan:  So Elisha, for those Body Corporates who are wanting to change the bylaws, is this a really quite problematic process? Is it difficult to do?

Elisha: Well look, it’s not too difficult to do. The first step really is that the Body Corporate has to first identify what do they wanna change, or what Body Corporate bylaw to they need to include into their scheme, into their Body Corporate. To do this, a Body Corporate has to pass a motion to record a new community management statement that includes those changes for the bylaws. Now usually a motion agreeing to change the bylaws is required to be made by a special resolution at a general meeting. But this can sometimes change, depending on the type of Body Corporate bylaw in which you are implementing or changing to the CMS. For example, some By-Laws require … Some By-Laws which are changing or amending an exclusive use will require a resolution. So really understanding what it is you’re changing and what motion is required to be presented at a general meeting is really a critical factor when changing those bylaws.

Dan:  Elisha, is there a typical example of why a By-Law would change?

Elisha:  Yeah definitely. So at the moment, if we look at this holistically. Technology is evolving and the way in which we live is really changing. And in that case, bylaws often need to be updated or amended to, put simply, get with the times. So perhaps a bylaw has been recently found by the commissioner to be invalid, perhaps the bylaw is considered to be discriminatory in nature or perhaps not consistent with the act. Or perhaps even a lot owner no longer wanting his exclusive use car parking space has decided to give it up. There’s a range of different ways in which a Body Corporate bylaw would need to be amended.

Dan:  Now what about those occasions where the bylaw that’s going to be changed, is a little bit of a challenge to do so? Is there a time that would necessitate the Body Corporate members seeking the help of a law firm?

Elisha:  Yes certainly. So just by reviewing your bylaws and keeping up to date with the current legislation is really important. If you aren’t aware of what is enforceable or the recent decisions of the adjudicator in the commissioner’s office of whether pets are allowed, or what’s the ruling on towing, that sort of thing. It’s always good to seek advice from a legal advisor who can point you in the right direction in that regard. And certainly at OMB we have the experience and knowledge to be able to point you in that right direction. At the moment, if you are looking at your bylaws thinking, “Are they actually valid or should they be amended, or do we need to squeaky these up a little bit?” OMB are willing to provide a free of charge initial phone call and also a review of your bylaws, just to make sure that you are on the right track.

 

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