ACT: Q&A Unapproved alterations – remove at the owners expense

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This lot owner is concerned about unapproved alterations to townhouses in their scheme in ACT. Christopher Kerin, Kerin Benson Lawyers provides the following response.

Question: Unapproved alterations have been made to the exterior of many townhouses in my scheme. Can the Body Corporate request to have these unapproved fixtures removed at the owner’s expense?

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I live in a complex in the ACT where I believe many unapproved alterations have been made to townhouses in the complex, particularly installation of services on the outside of the complex’s ‘wing’ walls (most units have one wing wall with an external face to the common land, the other wing wall being shared with their next door neighbour).

Installation of items on the outside of wing walls without permission from our Body Corporate’s Executive Committee is contrary to our rules. The items installed on the outside of wing walls, either on or overhanging the common property include air-conditioning units and their connections, gas meters and connecting pipes, hot water services, protruding vents from exhaust fans, water taps, pipes and conduits for satellite dishes, and so on. The list is extensive.

These unapproved alterations are unattractive additions and in my opinion, seriously detract from the complex’s amenity and any remaining architectural integrity it may have.

I want to know if, when the townhouses come up for sale, does the vendor and/or the vendor’s agent have a duty to disclose details of unapproved alterations that have been made to the outside of the townhouse? The point is that, in theory, the Body Corporate could require these unapproved fixtures to be removed at the owner’s expense.

Is there some general duty of disclosure that could be cited, and that might help deter owners from making unapproved alterations to their units in future?

Answer: The express permission of the owners corporation by unopposed resolution is required for such additions.

I would need to see the relevant units plan to provide definitive advice, however, I advise generally as follows.

Wing Walls (not between two units)

If the wing wall is not between two units, then the external half of the wing wall will be common property and will require owners corporation approval for additions to the common property.

Wing Walls (between two units)

If the wing wall is between two units, no part of the wing wall will be common property but rather the centre of the wing wall will be the boundary between the two units.

That is, no common property is involved with wing walls between units in class B units.

However, in both cases, if Default Rule 4 is in place and the addition is an erection or alteration to either the unit or the common property, then the express permission of the owners corporation by unopposed resolution is required for such additions.

See Default Rule 4 below (in italics):

4 Erections and alterations

(2) Permission may be given subject to conditions stated in the resolution.

A rule infringement notice can be issued requiring the owner to remedy the contravention.

A failure to comply with the rule infringement notice and remedy the contravention will result in the owners corporation being able to go to ACAT and get an order for this to happen.

The question as to whether the vendor needs to disclose the additions to a purchaser is not a strata law question and should be raised with the solicitor or conveyancer engaged by the vendor.

There are a number of implied warranties in the Civil Law (Property) Act 2006 that a vendor provides to a purchaser and which are taken to be part of the contract for sale.

The relevant provisions are set out below.

Division 2.9.3 Implied warranties

261 Meaning of implied warranties—div 2.9.3

In this division:

implied warranties—see section 130D.

262 Purpose—div 2.9.3

This division—

(a) sets out warranties that are taken to be division of a contract for the sale of a unit; and

(b) provides a right to cancel a contract for the sale of a unit.

263 Implied warranties and right to cancel—effect

(1) The implied warranties and the right to cancel a contract for sale under this division have effect despite anything in the contract or in any other contract or arrangement.

(2) The right to cancel a contract for sale under this division is in addition to, and does not limit, any other remedy available to the buyer of a unit for a breach of warranty established under this division.

264 Implied warranties

(1) The warranties (the implied warranties) in this section are taken to be part of a contract for the sale of a unit.

(2) The seller of a unit warrants that, at the date of the contract—

(a) to the seller’s knowledge, there are no unfunded latent or patent defects in the common property or owners corporation assets, other than the following:

(i) defects arising through fair wear and tear;

(ii) defects disclosed in the contract; and

(b) the owners corporation records do not disclose any defects to which the warranty in paragraph (a) applies; and

(c) to the seller’s knowledge, there are no actual, contingent or expected unfunded liabilities of the owners corporation that are not part of the corporation’s normal operating expenses, other than liabilities disclosed in the contract; and

(d) the owners corporation records do not disclose any liabilities of the corporation to which the warranty in paragraph (c) applies.

(3) The seller warrants that, at the completion of the contract, to the seller’s knowledge, there are no circumstances (other than circumstances disclosed in the contract) in relation to the affairs of the owners corporation likely to materially prejudice the buyer.

(4) For subsection (2), a seller is taken to have knowledge of a thing if the seller has actual knowledge, or ought reasonably to have knowledge, of the thing.

265 Cancellation of contract

(1) The buyer of a unit may, by written notice given to the seller, cancel the contract for the sale of the unit if there would be a breach of an implied warranty were the contract completed at the time it is cancelled.

(2) A notice under this section must be given—

(a) if the contract for the unit is entered before the units plan for the unit is registered—not later than 3 days before the buyer is required to complete the contract; or

(b) in any other case—not later than 14 days after the later of the following happens:

(i) the buyer and seller exchange contracts;

(ii) another period agreed between the buyer and seller ends.

(3) If the buyer cancels the contract, the seller must repay any amount paid to the seller towards the purchase of the unit.

266 Claim for compensation

(1) This section applies if, before completion of a contract for the sale of a unit, the buyer reasonably believes there would be a breach of a warranty established under this division were the contract to be completed.

(2) The buyer may, by written notice given to the seller—

(a) tell the seller—

(i) about the breach; and

(ii) that the buyer will complete the contract; and

(b) claim compensation for the breach.

(3) A notice under this section must be given—

(a) if the contract for the unit is entered before the units plan for the unit is registered—not later than 3 days before the buyer is required to complete the contract; or

(b) in any other case—not later than 14 days after the later of the following happens:

(i) the buyer’s copy of the contract is received by the buyer;

(ii) another period agreed between the buyer and seller ends.

This post appears in Strata News #201.

Read next:

• ACT: Q&A Where do my Common Property Boundary Lines Lie?
• ACT: Q&A Can you install floorboards in strata units in older buildings in Canberra?

Christopher Kerin
Kerin Benson Lawyers
P: 02 8706 7060
E: [email protected]

This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.

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