It has become common practice for property developers to devise “Architectural Guidelines” or “Building Covenant” by-laws to dictate the design of properties in a residential estate. These are generally contained in the Contract of Sale and the Body Corporate Community Management Scheme (“CMS”) handed to new buyers and are governed by the Body Corporate and Community Management Act 1997 (“BCCMA”). Common by-laws will require certain colour schemes, street frontage designs, or number of garages in a property, but how enforceable are they really?
Many buyers and sellers of properties governed by by-laws believe that simply because it is in the document, then it must be enforceable. However, section 180 of the BCCMA outlines some limitations on these by-laws. By-laws cannot contravene the BCCMA or any other Act in force, be oppressive or unreasonable, impose monetary liability (except with exclusive use by-laws), be discriminative, or contravene the sustainable housing initiatives in the Building Act 1975 (“BA”), amongst others. In 2009 and 2010, several amendments were made to the BA adding a Chapter 8A Part 2 that included provisions relating to sustainable housing. It became legally unenforceable for a Body Corporate to restrict or prohibit certain environmentally-friendly housing initiatives such as solar panels, hot water systems, window fixtures and light-coloured roofs.
This legislation was recently tested in the Queensland Supreme Court decision of Bettson Properties Pty Ltd & Anor v Tyler  QSC 153. In this case, there was a Building Covenant in the estate requiring Tyler to submit plans to the Developer for consideration noting the size, number and location of any solar panels to be affixed. The Building Covenant further allowed the Developer to refuse panels that it deemed “not aesthetically pleasing”. Tyler had affixed solar panels to the north-eastern quadrant of her roof, the location determined the most effective by her contractor. The Developer and Tyler had several discussions about the solar panels as the Developer deemed them unsightly and eventually the Developer engaged solicitors to write a letter of demand to Tyler forcing her to remove and relocate the solar panels. Tyler was aware of the change in legislation and refused on the grounds that the Building Covenant was unenforceable. The Developer argued that Tyler was not restricted from installing solar panels, just from their location.
The Act expressly prohibits any restriction on the installation of solar panels if merely to preserve the external appearance of property. The Court examined the relevant sections of the BA and considered the application of these provisions against both sides of the argument. Ultimately, the Court determined that the Building Covenant was restrictive and unenforceable. The location of Tyler’s solar panels is paramount to their effectiveness as a sustainable housing feature and the restriction of the location is clearly a breach of the BA and, in turn, a breach of the BCCMA.
While this case examined a specific restricted by-law, the catch all of unreasonableness is being utilised more and more frequently. Regardless of which side of the Contract you are on, you need to ensure you are aware of the enforceability and legality of the by-laws.
If you wish to discuss the by-laws proposed or registered with your housing estate, please contact one of our experienced property lawyers.