Can unfinancial strata owners lose access to facilities?

In many strata schemes, shared facilities like gyms, pools, BBQ areas, and function rooms are a big drawcard for owners and tenants. But what happens if an owner falls behind on their strata levies? Can unfinancial strata owners lose access to facilities?

The answer depends on your state’s strata laws and the scheme’s registered by-laws.

Strata levies and being “unfinancial”

An unfinancial owner is someone who owes unpaid strata levies, interest, or related charges. In NSW, under the Strata Schemes Management Act 2015, owners must be up to date with levies to vote at meetings or be elected to the committee. But what about using facilities?

Can facilities access be restricted?

In NSW, the Act does not automatically allow an Owners Corporation to block access to facilities. However, the scheme can adopt a by-law that restricts access to certain non-essential amenities — such as the pool, gym, or BBQ areas — for owners who are unfinancial. This cannot restrict essential services like water, electricity, or building access.

For a restriction to be enforceable:

1. The by-law must be lawfully adopted by special resolution at a general meeting.

2. It must be reasonable and not oppressive, as per section 139 of the Act.

3. It should clearly state when access is removed and how it will be reinstated (usually once arrears are paid).

Why do schemes adopt these by-laws?

The main reason is to encourage owners to pay levies promptly. Strata levies fund the upkeep of shared facilities. If too many owners fall behind, the burden shifts unfairly to those who pay on time.

Risks and challenges

• Legal challenges — Owners may contest the by-law at NCAT if they feel it’s harsh or unreasonable.

• Enforcement costs — Installing access control systems or manual monitoring can be expensive.

• Tenant impact — If a lot is tenanted, the restriction may affect tenants rather than the owner, which could cause disputes.

Key takeaway

Yes — unfinancial strata owners can lose access to certain non-essential facilities if a valid by-law is in place. Without such a by-law, the Owners Corporation generally cannot block access. If your scheme is considering this, seek legal advice and ensure the rule is drafted and passed correctly.