NSW: Are Administrative Fees In By-Laws Valid?

This article is about the Exclusive Use By-Law, Strata Plan of Subdivision, Licence or Lease.

According to the Tribunal in Roden v The Owners – Strata Plan No. 55773 [2021] NSWCATCD 61, the answer to this question in yes, as long as the administrative fee is necessary and reasonable.

In this matter, Mr Roden sought an order under s 150 of the Strata Schemes Management Act 2015 to invalidate parts of a keeping of animals by-law. Among Mr Roden’s objections was that the application to keep an animal must be accompanied by a non-refundable administration fee of $300.

At the hearing, the owners corporation’s representative stated that the administration fee of $300 included the cost to the owners corporation of processing applications under the by-law. The Tribunal accepted that the fee was a modest charge and was necessary as each application had to be considered on its merits having regard to the conditions in the by-law. In the Tribunal’s opinion, the administration fee was not unreasonable and it was not harsh, unconscionable or oppressive and neither did it restrict a lot owner in the enjoyment or exercise of their rights incident to ownership of a lot.

Although in this case the administration fee was upheld, it should be noted that the decision was handed down by a single member and could be overturned in the future.

If an Owners Corporation intends to impose administration fees in their by-laws, we would recommend that the fees be for the reasonable out of pocket expenses of the Owners Corporation in giving effect to the by-law, as opposed to imposing unjustifiable amounts. Reasonable out of pocket expenses would be, for example, the fees of the strata manager to consider each application (where this power has been delegated), or the costs to call a general meeting to consider the application.

Jasmin H.Singh & Allison Benson
Kerin Benson Lawyers
E: [email protected]
P: 02 4032 7990

This is general information and should not be considered to be legal advice. You should obtain legal advice specific to your individual situation.

This post appears in Strata News #512.

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Read next:

• NSW: Exclusive Use By-Law, Strata Plan of Subdivision, Licence or Lease – Which Is Better? Part 1
• NSW: Q&A Issuing and Enforcing a Notices to Comply with a By Law
• NSW: Q&A Is Strata Schemes Management Act 2015 for Residential Only?
• NSW: 2021 New Strata Legislation Will Soon Become Law

This article has been republished with permission from the author and first appeared on the Kerin Benson Lawyers website.

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