Issuing Infringement Notices

Issuing Infringement Notices

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The Executive Committee (EC) has the power to issue an infringement notice when it forms the view that an owner or a resident is breaching the rules of the owners corporation.

However, like everything in the Unit Titles (Management) Act there are catches.  For the infringement to be enforceable the notice must be issued in accordance with the UT(M)A and the rules must be registered and valid. (See Rules and house rules).

S 109 (Breach of rules-rule infringement notice of the UT(M)A) unlike almost any other section of the Act, is very specific about what the EC must decide and how the infringement notice is to be issued.

109  Breach of rules—rule infringement notice
(1)   This section applies if the executive committee of an owners corporation reasonably believes that—
(a)   the owner or occupier (the person) of a unit has contravened a provision of the corporation’s rules; and
(b)   the circumstances of the contravention make it likely that the contravention will continue or be repeated.
(2)   The owners corporation may, if authorised by an ordinary resolution of the executive committee, give the person a notice (a rule infringement notice) requiring the person to remedy the contravention.

Note  If a form is approved under s 146 for this provision, the form must be used.

(3)   A rule infringement notice must state the following:
(a)   that the owners corporation believes the person is contravening, or has contravened, a provision of the rules; (b)   the provision of the rules the owners corporation believes is, or was, contravened;
(c)   details sufficient to identify the contravention;
(d)   if the owners corporation believes the contravention is continuing—the period (which must be reasonable in the circumstances) within which the person must remedy the contravention;
(e)   if the owners corporation believes the contravention is likely to be repeated—that the person must not repeat the contravention;
(f)   if the person does not comply with the notice—
(i)    the person commits an offence; and
(ii)   the owners corporation may, without further notice, apply to the ACAT for an order in relation to the failure to comply with the notice.
(4)   If a rule infringement notice is given to a person following a request under section 111, the owners corporation must, not later than 14 days after the day the request was received, tell the person who made the request that the notice has been given.

The EC has to “reasonably believe” that “the owner or occupier” (the person) of the unit has contravened a specified rule and that “it is likely that the contravention will continue or be repeated”.  ACAT decided in UP14 v Wright UT27/2019

The test of reasonable belief is both subjective, that is, did the executive committee genuinely hold the requisite belief; and objective, that is, was such a belief reasonable according to the standards of a reasonable person in the same or similar circumstances? The onus of proof is on the applicant (the EC seeking to enforce the Rule Infringement Notice) to establish both criteria. (para 41)

So the EC cannot decide that a person is a trouble maker and deserves receiving a Rule Infringement Notice.  They have to decide based on reason which Rule has been infringed and how.

Then the EC must pass a resolution that an infringement notice will be issued to the person/s infringing the rule.

The very specific requirements of S109(1) suggest that even a manager with wide delegations cannot issue an infringement notice without a thorough and minuted decision of the EC. Also, Schedule 2 sections 2.1 and 2.8-2.10 requires that a decision would be made at a formal meeting with a least 7 days’ notice and a quorum present not an email “meeting”.

All of this means that the contravention of the rules must be significant.  Children playing on common property for a period or on a regular basis is not by itself enough to contravene the rules.  They are using the common property by occupying some of it, but it is not an exclusive ongoing occupation.  Some owners congregating to chat on the common property is not in any way a breach.  They are exercising their right of use and enjoyment of the common property.  Owners picnicking on the common property is not a breach of the rules.  However, if that were a very regular event involving a large party, much noise and litter that activity could lead to an infringement action.

S109(3) then lists what the infringement notice must provide to the alleged rule infringer, which are

• that the OC believes the person receiving the notice has contravened the rules

• which rule has been contravened, when and how

• if the contravention is continuing or likely to be repeated and

• if the person does not comply, they commit an offence and the OC may without further notice apply to ACAT for an order about that failure.

Having reached the conclusion that a contravention of the rules has occurred and is likely to continue, the EC does not have to issue an infringement notice.  S109(2) says the EC “may” issue a notice.  A simpler approach would be for the EC to explain to the alleged infringer the impacts of their behaviour and the EC’s intention to act if the behaviour does not cease.  The alleged rule infringer may be unaware of or may have a perfectly reasonable excuse for the infringement.  ACAT made significant negative comments in Corby v UP 1035 that the first contact with the alleged rule infringer was an infringement notice. 

If the OC embarks on this process obviously it needs to be sure that any changes to its rules under S108 have been registered and are reasonably likely to be upheld by ACAT as valid. 

The infringement notice is then sent to the alleged infringer’s address by their preferred means of communication by either the manager or EC. 

The notice has no greater legitimacy if it is issued by a legal firm and while this process is advocated by some managers it involves significant unnecessary costs passed back to the alleged infringer. A number of managers are charging significant amounts to issue infringement notices or reprimands preceding the issue of an infringement notice.  OCN is aware of one unreported ACAT decision where the Rule Infringement Notice was deemed to be invalid and the ‘rule infringer’ was not required to pay the manager’s fee.  

Some OCs are issuing infringement notices like confetti.  In these cases, it is highly unlikely that the notices are being issued in accordance with S109 and are consequently invalid. 

If the infringement relates to damage to common property, the OC can recover its costs to rectify the damage under S31 as “an expense incurred to carry out work necessary because of the wilful or negligent act or omission of the owner or occupier of the unit”.

Tenants

Significant confusion can occur when the infringements result from the behaviour of a tenant.  Often the EC and resident owners have not experienced the problem before and can be quite distressed by constant noise, aggression and damage.  Unfortunately, many younger managers have not experienced this problem either.  Usually, they seek assistance from more senior managers and are then advised about the provisions of the Residential Tenancy Act.  The unruly tenant has no Residential Tenancy Act relationship with the EC or OC.  The issue for the EC and OC is infringement of the rules of the OC and these are UT(M)A issues.  Consequently, ECs and resident owners are often advised they really cannot do much about the problem tenant.   This is just not the case.  The EC is obliged to protect the owners and tenants who are behaving appropriately in their living environment rather than facilitate the person/s causing disturbance and distress to their neighbours.

The owner of the unit is also infringing the OC’s rules because their tenant is infringing the rules (S107(3)), so the owner and the letting agent should be informed there is a problem at the earliest possible stage.  If the situation does not improve both the owner and the tenant should receive an infringement notice.

If the situation is not rectified by the owner and their letting agent, the EC should protect the other owners and tenants and take action in ACAT.  And, if necessary, keep taking action until the disruptive person is removed.

Similar processes should be used if short term tenants cause disruption.  In that case the tenant probably cannot be located and sent an infringement notice, but the owner can be subject to infringement action until the infringement of the rules of the OC ceases.