Dispute Resolution in Strata Schemes: A Practical Guide
Hannah Leckie
Strata schemes are basically “communities” of shared common property ownership and responsibilities, which often can lead to disputes and conflicts over various issues. Effective dispute resolution is essential to maintain harmony and compliance within these communities.
Common causes of disputes in strata schemes
These are some of the common disputes that may arise in strata schemes:
Noise complaints
Parking and common property usage
Pet ownership
Contributions to levies
Repairs and maintenance issues
Smoking
Legal framework
The relevant legislation you will need to refer to is Part 12 of the Strata Schemes Management Act 2015 (NSW) which sets out provisions relating to mediations, orders that can be sought, and also a sets out who can lodge a strata application with NSW Civil and Administrative Tribunal (see section 226 definition of “Interested Persons” within the Act).
In most cases, before an application can be lodged at the Tribunal, it is a prerequisite to attempt a mediation at NSW Fair Trading. We will go through this escalation process in this article.
Internal dispute resolution
Before attempting to resolve disputes externally through Fair Trading and the Tribunal, strata schemes are encouraged to resolve disputes internally to avoid time and associated cost. Disputes often arise from misunderstandings. The first step should always be direct, respectful communication between the parties involved. This might be:
An informal conversation between neighbours
A written note or email outlining concerns
A request for clarification (e.g. about noise, renovations, or by-law compliance)
Some residents may feel awkward or uncomfortable speaking directly with their neighbour(s) about their concerns or issues. In these cases, it is recommended that you report the issue to your building manager or the strata manager (or both) with a clear outline of what the issue is and which apartment is concerned with your complaint.
Building managers and strata managers can usually only take action in circumstances where the “offending apartment” is identified. Your strata manager should be able to undertake the following:
Provide advice on the best course of action
Facilitate communication between parties
Ensure procedures (like issuing notices) are followed properly
Disputes also often involve breaches of by-laws (e.g. noise, pets, parking). It is important to:
Check the by-laws in place for the scheme
Determine if a breach has occurred
If a breach has occurred and the first warning does not work, then your strata manager should seek instructions from the strata committee to issue a Notice to Comply with a By-law (Form 10). If a breach continues after notice, the scheme may escalate to mediation or seek a penalty through the Tribunal.
Fair Trading Mediation
If internal resolution fails, then the owners corporation, strata committee, or individual lot owners can apply for mediation through NSW Fair Trading. As noted previously, mediation is compulsory before most strata matters can proceed to the Tribunal.
It is easy to file a mediation application as everything is done online. Here is the website where you can access and file a mediation application: Applying for strata mediation | NSW Fair Trading
Strata mediation in New South Wales is a voluntary, confidential, and informal process offered by NSW Fair Trading to help resolve disputes within strata schemes without going to court or tribunal.
Here is a breakdown of what strata mediation involves:
Purpose: The goal is to help the parties involved in a strata dispute come to a mutually acceptable agreement, rather than having a decision imposed on them (like in NCAT or court).
Who can apply: Any party involved in a strata scheme dispute can apply, such as lot owners or owners corporations (your strata manager is likely to lodge an application on behalf of your owners corporation). That being said, if you would like your issue to be resolved sooner than the next strata committee meeting, or if your strata manager does not have instructions to progress your matter further, you may want to explore this option as an owner yourself.
Who is involved: An independent mediator from Fair Trading provides their services free of charge when arranged through Fair Trading. The mediation should also have both parties from either side of the mediation application present (e.g. lot owner, strata manager and/or a strata committee member). A lawyer is usually not involved in mediations unless agreed by all parties in advance.
How it is held: It is usually held online by phone and typically lasts up to about two to three hours depending on the nature of the issue. The mediator plays a neutral and facilitative role, makes sure everyone has a chance to speak, and ensures the conversation remains balanced and on topic. Their goal is not to decide who is right or wrong, but to help the parties reach a mutually acceptable agreement. They do not have the power to issue orders like the Tribunal or the Courts, but they will set out the points of agreement (if any) at the end of a mediation session to remind all parties of the outcome.
NSW Civil and Administrative Tribunal
If the mediation attempt fails, then the next step for escalation is to file a strata application at NSW Civil and Administrative Tribunal.
Filing a strata application at the Tribunal is a structured process that is typically not too complicated to follow, and your strata manager should be able to file applications for by-law breaches. If it is a complicated matter then owners corporations should engage a strata specialist lawyer for advice.
Once an application is filed then the Tribunal will review the application and assign a hearing date. The applicant must serve a copy of the application and the notice of hearing on the other party (the respondent) within a specific timeframe which is usually seven days, unless the Tribunal directs otherwise.
At the first directions hearing for a strata application at NCAT, the main goal is not to decide the outcome of the dispute, but to manage the case and set the process for moving forward. If parties are also going to be legally represented, it is at this directions hearing where parties usually seek leave to be legally represented and the Tribunal is likely to give orders when to file and serve evidence for both parties.
At the final hearing, the Tribunal is likely to hear the matter and make orders that are binding to both or either party.
It is recommended that legal advice be sought in Tribunal matters so that the parties understand what is required going forward. If you are unsure which legal representative to engage, your strata manager should be able to provide some recommendations on strata specialist lawyers who can assist.
Example Scenarios
Here are a few examples that we have dealt with.
Visitor parking breach: This is a common issue amongst strata schemes. We had an owner who has multiple vehicles but only has one car space allocated to his apartment lot. This owner has been parking his second vehicle in the visitor parking space which is only for genuine visitors and the by-law states that residents cannot park there. This owner received a few breach notices from the building manager and was eventually escalated to us as the strata managing agent. We issued and served the owner with a Notice to Comply with a By-Law with a covering letter warning the owner that continued breach may result in external escalation such as mediation application at Fair Trading. The matter ended up being escalated to mediation where the owner failed to turn up. Given the mediation was still “attempted” the owners corporation could have escalated this straight to the Tribunal for a penalty order. As this process costs time and money, we wanted to avoid this matter being escalated to the Tribunal. We therefore issued a strongly worded letter to the owner noting the possible consequences if this matter proceeds further and attached a copy of the strata application ready to be lodged with NCAT to add more weight to the letter. Thankfully this had worked, and the owner no longer parks his vehicle in the visitor parking space.
Unauthorised renovations: Some owners genuinely do not understand the process involved with minor and major renovations whilst some owners deliberately (and unfortunately) bypass the approval process and undertake works that have not been approved. We had a situation where a building manager had found out after locating large amounts of building materials being dumped in the garbage room that a certain apartment had carried out unauthorised major renovations. We immediately wrote to the owner advising that approval is required under section 108 of the Strata Schemes Management Act and no further work is to continue until such time approval is given. We also provided guidance by listing out all the required information, documents, motion and the by-law so that the owner can obtain retrospective approval at the upcoming general meeting. The owner preferred to deal with this through a formal mediation process at Fair Trading however, we met with the owner and attempted to mediate ourselves without going to a formal mediation process. It is usually the case for owners to bypass the correct approval process when they believe such a process is too complicated and tedious, and that was the case for this owner. We made it easy for this owner by providing a comprehensive list of what to provide and recommendations for strata specialist lawyers who can draft motions and by-laws for these works, explained the likely outcome, and further explained the likely consequences if the matter is escalated externally. The owner ended up comply and provided all the information required for a swift approval at the upcoming general meeting. In the end, the owner was very thankful for our guidance and the owners corporation ended up not having to spend time and money at the Tribunal.
In both cases, you will note that we avoided the need for further escalation by going to the Tribunal. Dispute resolutions should be carried out in a way to try and avoid further escalations by encouraging the parties to reach a suitable resolution. Good negotiation skills will assist with this and the strata managers here at Strata Sense all undertake intensive training courses on negotiation skills.
Conclusion
Proactive communication and structured processes are key to resolving disputes in strata schemes. The goal is to achieve fair and sustainable outcomes for everyone involved and maintain a harmonious environment within the community. If you ever need guidance on dispute resolutions in strata schemes, please reach out to your strata manager or our offices as we should be able to assist and guide you to the appropriate pathway forward, no matter the circumstance.
