Understanding The Importance of a Management Statement

When a purchaser buys into a strata title property a legal relationship is immediately created between the new owner of the unit or apartment and the strata company. In fact, as a registered proprietor, the new owner automatically becomes a member of the strata company, incurring obligations and responsibilities. The vehicle through which these are communicated is a document called the Management Statement.

By-laws by Another Name

This is a term that is more commonly known as the by-laws, and while many communal living schemes generally have by-laws that are similar to each other, there are also differences that are unique to individual schemes. What is important for every purchaser is to read and understand their own by-laws to avoid any future misunderstandings.

In our experience as a professional strata management company, knowing the by-laws reduces the incidence of disputes, which take up valuable time and create unnecessary hostility between the residents and the owners’ council. Our role at WA Strata Management is to administer the scheme to ensure that the owners’ council is operating within the applicable legislation, which includes the by-laws.

The Force of Subsidiary Legislation

We have had situations where purchasers did not understand that their by-laws have the force of subsidiary legislation. This means that some activities and conduct on common property and even on their own lots have been legally restricted. Ignoring these restrictions and proceeding on their own way only results in conflict that could have been avoided had they taken an interest in the by-laws before they purchased the property.

Be Aware of Financial Penalties

Intending purchasers should also be aware that with some breaches of by-laws, the State Administrative Tribunal can impose financial penalties. They can also make orders to ensure that by-laws are complied with.

We also strongly suggest that anyone intending to purchase in a group scheme, when examining the by-laws, also considers the possibility that some things may have been missed out that could have an impact on their decision. For example, provisions about future developments may not have been considered at the time the original by-laws were framed.

At WA Strata Management,** **our experienced professional staff members work hard to assist the owners’ councils we work with to run efficient and legally compliant organisations. Having a full understanding of the power and purpose of by-laws before purchasing a property avoids some of the issues that create disharmony and conflict.