If it is claimed that a lot owner or occupier (for example, a tenant) of a lot is in breach of the by-laws, the corporation may request that the person either do what is required under the by-laws, or stop doing what is not allowed under the by-laws. If the person continues to breach the by-laws, mediation may be sought, or a penalty may be imposed by the corporation if there is provision for this in the by-laws, and/or the matter may be taken to the Magistrates Court, see: Disputes.

Penalties for breaching the by-laws

The by-laws of a strata corporation may impose a penalty of up to $500 for contravention of, or failure to comply with, any by-laws [ss 34(3)(e), 34(9)]. If all the units in the scheme are non-residential, the penalty may be up to $2 000 [s 34(9)]. These fines may be imposed on members of the community corporation, occupiers, visitors or any other person entering the community parcel [s 43].

If the by-laws state that the corporation 'may impose a penalty of up to $500 for a breach of the by-laws' 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.

Note that it is the 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, 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 body corporate manager cannot impose a penalty for an alleged breach of the articles, although a manager may be given the power to issue and sign any penalty notice.

Time for payment of a penalty

The date set for payment of a penalty must be at least 60 days after the date the notice is served [s 34(6)(c)(ii)].

Non-payment of a penalty

If the penalty is not paid in time, the corporation may recover the amount as a debt. If notice has been given to a tenant or visitor, 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 the owner of a community lot, the penalty may be recovered by the corporation as if it were a contribution payable to the corporation, and interest will be payable on the penalty amount in the same way as if it were such a contribution [s 34(6)(d)].

Notice of a penalty

The corporation must give notice of the imposition of a penalty using the form set out in Schedule 1, Form 11 of the Community Titles Regulations 2011 (SA). The form is set out below.

Form 11

Section 34(6)(c)(i) of Act

Penalty Notice

To [insert name and lot number of the person to whom notice is given]

The [insert name of the community 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 corporation as a debt. If this notice is served on you as the owner of a community lot, the penalty may be recovered by the corporation under section 114 of the Community Titles Act 1996 (SA) (and interest will be payable on the penalty amount in the same way as if it were such a contribution).

Under section 34(6) 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).

Applying to revoke a penalty 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 34(6)(e)]. A representative of the 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 34(6)(f)].

When an application to revoke a penalty is made, the requirement to pay the penalty is suspended until the matter is resolved [s 34(6)(g)].

The Court must revoke the penalty if it is not satisfied that the person breached the by-laws as alleged, or if it is satisfied that the alleged breach is trifling [s 34(6)(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 34(7)]: