Retrospective Approval of Common Property Works in NSW Strata: The Owners – Strata Plan No 83678 v Khatib [2026] NSWCATAP 153

Introduction

Can a lot owner obtain retrospective approval for unauthorised works carried out on common property?

That question was considered by the NSW Civil and Administrative Tribunal Appeal Panel in The Owners – Strata Plan No 83678 v Khatib [2026] NSWCATAP 153.

The decision is important since it considers the interaction between section 126 and 149 of the Strata Schemes Management Act 2015 (NSW) (SSMA). These sections deal with two separate but related issues:

1. Approval of alterations to common property.
2. The making of common property rights by-laws.

The case provides useful guidance dealing with unauthorised works, retrospective by-laws, additions to common property and claims that an owners corporation has unreasonably refused consent.

The main message of the decision is that lot owners should not carry out works on common property without approval. However, where works have already been completed and the owners corporation refuses to regularise them, NCAT may still approve the works and prescribe a by-law if the refusal is unreasonable.

What the case is about

The respondent owned Lot 13. Lot 13 was accessible through a roller shutter large enough for vehicles to enter. Lot 14, immediately next door, had a similar roller shutter.

The building originally had an awning above the roller shutters. However, the original awning did not adequately prevent rain from entering Lot 13 when the roller shutter was open.

In 2019, the owner of Lot 13 installed a second awning below the existing awning. The new awning covered the recess in front of the roller shutters for Lots 13 and 14 to a depth of approximately 7.7 metres. The owner of Lot 14 consented to the installation.

However, the owner of Lot 13 did not obtain approval from the owners corporation before installing the awning. He did not have a special resolution approving the alteration to common property and did not have a common property rights by-law in place before the works were carried out.

This created a classic problem where the works had already been installed on common property, but the legal authorisation had not been obtained first.

The failed by-law motion

The owner of Lot 13 later presented a proposed by-law to the owners corporation at an annual general meeting held on 5 December 2023. The purpose of the by-law was to approve and regulate the awning.

The motion did not pass as a special resolution. He then commenced NCAT proceedings seeking orders under section 149 of the SSMA requiring the making of a common property rights by-law permitting the awning.

At the hearing, the proposed by-law differed in some respects from the version that had been put to the general meeting. The Tribunal treated those differences as relatively minor.

The Tribunal’s decision

At first instance, NCAT made orders in favour of the owner of Lot 13. The Tribunal prescribed a change to the by-laws of the owners corporation in the terms proposed by Lot 13, subject to amendments. It also approved the alteration of common property by installation of the awning under section 126 of the SSMA, with effect from the date of installation.

This meant the Tribunal effectively regularised both aspects of the problem:

1. The physical alteration to common property.
2. The by-law needed to regulate the ongoing rights and obligations connected with the awning.

The owners corporation appealed. The Appeal Panel rejected the appeal.

Key issue 1: Did the awning breach an existing by-law?

One of the owners corporation’s arguments was that the awning contravened an existing by-law preventing owners from damaging common property or making additions to common property.

The Appeal Panel accepted that the awning was inconsistent with that existing by-law. However, that was not fatal.

The important point is that a later by-law can impliedly amend or override an earlier inconsistent by-law to the extent necessary. If a new by-law validly authorises conduct that would otherwise breach an older by-law, the new by-law may operate as an implied amendment or exception to the older by-law. It means that the existence of an earlier restrictive by-law does not automatically prevent an owners corporation, or NCAT under section 149, from approving a later common property rights by-law.

However, the better drafting approach is to make the relationship between the new by-law and existing by-laws express. A carefully drafted by-law should identify the approved works, the affected common property, the exclusive use or special privilege granted, and the owner’s ongoing maintenance and indemnity obligations.

Key issue 2: What is the effect of a Building Information Certificate?

The case also considered the effect of a Building Information Certificate. The Appeal Panel confirmed that a Building Information Certificate does not grant development consent. It does not certify Building Code compliance. It does not retrospectively authorise unlawful development.

However, the certificate may still be relevant evidence. In this case, the certificate indicated that the Council did not propose to require demolition, alteration or rebuilding of the awning.

That distinction is important. Owners and owners corporations should not misunderstand a Building Information Certificate. It is not the same as development consent or a complying development certificate. But it can still affect whether an owners corporation has a reasonable basis to insist that an unauthorised structure must be removed.

Key issue 3: Section 126 and section 149 are separate powers

The Tribunal correctly identified that section 126 and section 149 perform different functions.

Section 126 allows NCAT, in appropriate circumstances, to approve renovations, alterations or repairs already made by a lot owner to common property or other owners corporation property. It also allows NCAT to specify who has ongoing responsibility for repair and maintenance of additional property arising from the works.

Section 149 deals with common property rights by-laws. It allows NCAT to prescribe a change to the by-laws if it finds that an owners corporation has unreasonably refused to make a common property rights by-law.

The two provisions can overlap in practice. A lot owner may need both approval of the physical alteration to common property and a by-law granting exclusive use or special privilege and allocating ongoing maintenance responsibility.

The decision is a reminder that a by-law alone does not always answer every issue. Depending on the nature of the works, the lot owner may also require approval under section 108 or an order under section 126.

Key issue 4: A formal vote

The owners corporation argued that the Tribunal could not make a section 126 order unless the works had first been formally submitted to a general meeting and refused by special resolution. The Appeal Panel rejected a rigid approach. Relying on the reasoning in Colman v The Owners – Strata Plan 61131 [2025] NSWSC 63, the Appeal Panel accepted that, while a refusal will commonly be shown by a failed vote at a general meeting, there may be cases where consent has been constructively refused even without a formal vote.

This is a practical approach. Strata disputes often involve delay, refusal to convene meetings, failure to place motions on agendas, or correspondence making clear that approval will not be given. In appropriate cases, NCAT can look at substance rather than form.

However, lot owners should not treat this as permission to bypass proper approval processes. The safer course is still to submit a properly drafted motion, explanatory note and by-law to a general meeting before carrying out works.

Key issue 5: Ainsworth v Albrecht did not save the owners corporation

The owners corporation relied on the High Court case of Ainsworth v Albrecht concerning unreasonable opposition to a body corporate proposal in Queensland.

The Appeal Panel explained that Ainsworth must be read in context and that the statutory test in section 149 of the SSMA is different.

Individual lot owners’ concerns can be relevant. Lot owners are entitled to consider their own interests, experiences and beliefs. However, there still needs to be evidence explaining why the proposed works or by-law would adversely affect the use and enjoyment of lots or common property.

In Khatib, there was no evidence from individual lot owners explaining their opposition. The Tribunal had found that the awning affected only Lots 13 and 14, that the owner of Lot 14 had consented, and that there was no evidence the awning reduced other owners’ use or enjoyment of common property.

This is a significant practical lesson. If an owners corporation wants to defend a refusal of a common property rights by-law, it should not rely on vague concerns. It should obtain and present evidence.

Key issue 6: New evidence on appeal is not easily admitted

The owners corporation sought to rely on further evidence about maintenance access and insurance risks. The Appeal Panel declined to receive that evidence. An appeal is not a second chance to run the case again. Evidence that could have been obtained and presented at the original hearing will generally not be admitted on appeal merely because the losing party later realises it would have helped.

This is especially important in NCAT strata disputes. Owners corporations should gather their evidence early. If there are concerns about structural adequacy, planning compliance, insurance, maintenance access, drainage, fire safety or impact on common property, those concerns should be supported by proper evidence at the original hearing.

Legal costs and proposed by-laws

The owners corporation also argued that Lot 13’s refusal to pay legal costs associated with reviewing or amending the by-law justified refusal of the proposed by-law.

The Tribunal and Appeal Panel rejected that argument on the facts.

The solicitors’ letter relied upon by the owners corporation had identified preliminary issues with the draft by-law, but the Tribunal considered those issues were already dealt with. There was also no evidence that the legal costs would impose a significant financial burden on other owners.

This does not mean a lot owner can never be required to pay reasonable legal costs for a by-law. In many strata schemes, it is common and appropriate for a lot owner seeking a special privilege or exclusive use by-law to pay the reasonable legal, registration and strata management costs associated with that by-law.

However, this case shows that an owners corporation needs a proper basis for insisting on costs as a reason for refusing a by-law. The demand should be reasonable, connected with legitimate drafting or registration work, and supported by the circumstances.

Practical lessons for lot owners

A lot owner who wants to alter common property should obtain advice from an experienced building dispute lawyers Sydney, prepare a proper scope of works, obtain any necessary council or certifier approvals, obtain engineering evidence if needed, prepare a proper by-law, and submit a motion to a general meeting before starting work.

If works have already been carried out, the owner should act quickly to regularise them. This may involve preparing a common property rights by-law, offering appropriate maintenance and indemnity obligations, and providing evidence that the works are structurally sound and do not adversely affect other owners.

Practical lessons for owners corporations

Owners corporations should carefully assess requests for retrospective approval. They are not required to approve every unauthorised alteration. However, a refusal must be based on proper, rational and evidence-based grounds.

If an owners corporation opposes a by-law, it should clearly identify why.  

Conclusion

The Owners – Strata Plan No 83678 v Khatib [2026] NSWCATAP 153 is an important decision on retrospective approval of common property works, section 126 work approval orders and section 149 common property rights by-laws.

The decision confirms that unauthorised works can, in appropriate circumstances, be regularised by NCAT. It also confirms that an owners corporation’s refusal to approve a by-law must be reasonable and supported by proper grounds.

For lot owners, the case is a warning not to install first and seek approval later. For owners corporations, it is a warning that refusal of a by-law or retrospective approval must be evidence-based and legally defensible.

Pobi Lawyers assists lot owners and owners corporations in NSW strata disputes involving retrospective by-laws, section 126 applications, section 149 applications, unauthorised renovations and NCAT proceedings. Our specialist strata lawyers Sydney team provides strategic advice and representation in complex strata matters. 

Disclaimer 

This article is provided for general information purposes only. It does not constitute legal advice and should not be relied upon as such. Pobi Lawyers accepts no responsibility or liability for any loss arising from reliance on the information contained in this article.