Tuesday, May 24, 2022

Strata Schemes Management Act 2015 No 50

Part 2
Division 4
Section 26

Restrictions on powers of owners corporation during initial period | Section 26

(1)  An owners corporation for a strata scheme must not, during the initial period, do any of the following things unless the owners corporation is authorised to do so by an order of the Tribunal under this Division—

(a)  alter any common property or erect any structure on the common property otherwise than in accordance with a strata development contract,

(b)  incur a debt for an amount that exceeds the amount then available for repayment of the debt from its administrative fund or its capital works fund,

(c)  appoint a strata managing agent or a building manager or other person to assist it in the management or control of use of the common property, or the maintenance or repair of the common property, for a period extending beyond the holding of the first annual general meeting of the owners corporation,

(d)  borrow money or give securities.

(2)  An owners corporation may recover from the original owner—

(a)  as a debt, any amount for which the owners corporation is liable because of a contravention of subsection (1) (b), together with the expenses of the owners corporation incurred in recovering that amount, and

(b)  as damages for breach of statutory duty, any loss suffered by the owners corporation as a result of any other contravention of this section.

(3)  An owner may recover, as damages for breach of statutory duty, any loss that has been suffered by the owner as a result of a contravention of this section (other than subsection (1) (b)).

(4)  It is a defence to an action under this section in debt or for damages if it is proved that the original owner—

(a)  did not know of the contravention on which the action is based, or

(b)  was not in a position to influence the conduct of the owners corporation in relation to the contravention, or

(c)  used due diligence to prevent the contravention.

(5)  A remedy available under this section does not affect any other remedy.


Section 140 places restrictions on the making, amendment and repeal of by-laws during the initial period.

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Disclaimer: Reproduced from the Strata Schemes Management Act 2015 . This website does not give legal advice or other professional advice. You should seek legal or other professional advice before acting and not rely on any of the content on this website.

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