Articles are the rules of the strata corporation. While legal obligations under the Strata Titles Act 1988 (SA) cannot be avoided or changed, the articles are determined by the strata corporation itself.
Schedule 3 of the Strata Titles Act 1988 (SA) sets out the model articles for all strata corporations. If a particular strata corporation wishes to adopt its own articles, or amend any number of its articles, it can do so [s 19(2)].
The articles are binding on the strata corporation and the unit holders [s 20]. Articles that relate to the use of units or the common property are binding on tenants [s 20(1)(c)]. A unit holder who has a tenant in the unit must take reasonable steps to ensure that the tenant complies with the articles [s 20(2)].
Some common provisions compel the owner or occupier to:
How to change the articles of a strata corporation
The articles of a strata corporation can be changed by a special resolution of its members (see Types of resolutions) [s 19(2)]. Any change must be lodged with the Registrar-General at the Lands Titles Office to be effective and legal [s 19(3)].
For a variation or substitution of articles to take effect, the changes must be certified in accordance with the form prescribed in Schedule 1 Form 3 of the Strata Titles Regulations 2018 (SA). The certification is then lodged with the Registrar-General, where a copy of the special resolution amending the articles is attached to the certification [see reg 9(1); Strata Titles Regulations 2018 (SA) Schedule 1 Form 3 - Certificate of Amendment of Articles].
What cannot be in the articles
Dealing with a unit
A corporation cannot prevent a unit holder from selling their unit [s 19(4)(a)], or leasing or allowing someone to live in their unit [s 19(4)(b)].
Assistance dogs and therapeutic animals
The articles may not prevent an occupier of a unit who has a disability [see Equal Opportunity Act 1984 (SA) s 5(1)] from having and using an assistance dog or a therapeutic animal [see ss 19(4)(c), s 3(1)]. Similarly, a visitor to a unit who has a disability may not be prevented from using their assistance dog or therapeutic animal [see ss 19(4)(d), s 3(1)].
An assistance dog is an accredited guide dog or hearing dog, or a disability dog under the Dog and Cat Management Act 1995 (SA) [s 21A]. A therapeutic animal is an animal, other than an assistance dog, certified by a medical practitioner as being required to assist a person as a consequence of the person's disability [Equal Opportunity Act 1984 (SA) s 88A]
Articles that reduce the value of a unit or unfairly discriminate against a unit holder
Any articles that reduce the value of a unit or unfairly discriminate against a unit holder may be struck out by order of the Magistrates Court or the District Court [Strata Titles Act 1988 (SA) s 19A(1)].
The application to strike out the article/s must be made by a person who was a unit holder, which includes a person who has contracted to purchase the unit, when the articles came into force.
The application must be made within 3 months after the person (or either or any of the unit holders where the unit is held by 2 or more persons) first knew, or could reasonably be expected to have known, that the articles had been made [s 19(2)].
An application to strike out an article would normally be made to the Magistrates Court as a minor civil action under s 41A. If the matter was particularly complex or significant [s 41A(5)], a unit holder could seek the permission of the District Court to commence proceedings there [s 41A(3)]. Alternatively, the District Court could agree to transfer proceedings begun in the Magistrates Court to the District Court [s 41A(4)].
Breaches of the articles
If it is claimed that a unit holder or occupier (for example, a tenant) of a unit is in breach of the articles, the corporation may request that the person either do what is required under the articles, or stop doing what is not allowed under the articles. If the person continues to breach the articles, mediation may be sought, or a penalty may be imposed by the corporation if there is provision for this in the articles, and/or the matter may be taken to the Magistrates Court (see Disputes).
Penalties for breaching the articles
The articles of a strata corporation may impose a penalty of up to $500 [s 19(5)(b)] for contravention of, or failure to comply with, any articles [s 19(3a)]. If all the units in the strata scheme are non-residential, the penalty may be up to $2 000 [s 19(5)(a)]. Note that the articles set out in Schedule 3 of the Act (see above) do not include provision for imposing a penalty for a breach of the articles. If a corporation wants this power, it must amend its articles accordingly (see How to change the articles of a strata corporation above).
If the articles state that the corporation ‘may impose a penalty of up to $500’ for a breach of the articles, this does not mean that any penalty must be $500. A corporation should ensure that the amount of any penalty imposed is reasonable in relation to the nature and extent of the breach. The amount of a penalty could be disputed in the Magistrates Court if it could be argued to be oppressive, unreasonable or unjust [s 41A] (see Disputes).
Note that it is the strata corporation that may impose a penalty for an alleged breach. If a corporation has a management committee, the management committee may act for the corporation. Thus, unless some other valid delegation has been made, a duly called meeting of either the corporation or the management committee will be needed to impose a penalty for an alleged breach of the articles. A strata manager cannot impose a penalty for an alleged breach of the articles [see Strata managers].
Notice of a penalty
The strata corporation must give notice of the imposition of a penalty using the Form 4 set out in Schedule 1 of the Strata Titles Regulations 2018 (SA) [see Strata Titles Act 1988 (SA) s 19(3b)(c)(i)]. The form is set out below.
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Schedule 1 Form 4 - Penalty Notice To [insert name and unit number of the person to whom notice is given] The [insert name of the strata corporation giving notice] gives you notice that you have contravened or failed to comply with [specify the by-law or article that has been contravened or not complied with] by [set out the details of the contravention or non-compliance]. The penalty of [specify the amount of the penalty] is payable to the corporation by you not later than [specify the date for payment]. If you do not pay the penalty as required by this notice, the penalty is recoverable from you by the strata corporation as a debt. If this notice is served on you as a unit holder, the penalty may be recovered by the corporation under section 27 of the Strata Titles Act 1988 (and interest will be payable on the penalty amount in the same way as if it were such a contribution). Under section 19(3b)(e) of the Act you are entitled to apply to the Magistrates Court for revocation of this notice. The application must be made within 60 days after service of this notice. If you make such an application, the penalty specified in this notice is not payable unless the application is withdrawn or otherwise discontinued by you, or is dismissed or refused by the Court (and, in such a case, the penalty will be payable on the date on which the application is so withdrawn, discontinued, dismissed or refused or on the date for payment specified in the notice, whichever occurs later). |
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Time for payment of a penalty
The date set for payment of the penalty must be at least 60 days after the date the notice is served [s 19(3b)(c)(ii)].
Non-payment of a penalty
If the penalty is not paid in time, the strata corporation may recover the amount as a debt. If the notice has been given to a tenant, then, ultimately, action can be taken in the Magistrates Court (minor civil action jurisdiction) to recover the debt. If the notice has been given to a unit holder, the penalty may be recovered by the strata corporation as if it were a contribution payable to the strata corporation, and interest will be payable on the penalty amount in the same way as if it were such a contribution [s 19(3b)(d)].
Challenging a penalty
Revocation of the notice
A person who has received a penalty notice may, within 60 days after service of the notice, apply to the Magistrates Court for revocation of the notice [s 19(3b)(e)]. A representative of the strata corporation will be required to attend the hearing and will have to show that, on the balance of probabilities, the person committed the alleged breach [s 19(3b)(f)].
When an application to revoke a penalty is made, the requirement to pay the penalty is suspended until the matter is resolved [s 19(3b)(g)].
The Court must revoke the penalty if it is not satisfied that the person breached the articles as alleged, or if it is satisfied that the alleged breach is trifling [s 19(3b)(e)].
A breach may be regarded as ‘trifling’ if the circumstances surrounding the breach were such that the person ought to be excused from the imposition of a penalty on any of the following grounds [s 19(3c)]:
Challenging the amount of the penalty or time to pay
If a person served with a penalty notice considers the amount of the penalty or the time given to pay the penalty to be oppressive, unreasonable or unjust, they may approach the corporation in the first instance (in writing to the secretary) to request that the amount and/or time be reviewed. If unsuccessful, an application may be made to the Magistrates Court to review the corporation’s decision (see Disputes). While there is no time limit for such an application, be aware that the requirement to pay the penalty may not necessarily be suspended until the matter is resolved, and that interest may be payable on unpaid amounts. Legal advice would be useful in such matters.
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