NSW: Air-conditioners, kitchen renos and EV chargers: What happens when a building does not have enough electrical capacity?

This article is about being mindful of a building’s electrical capacity, and what to do if it is overloaded.

This blog/vlog is as a result of a question raised on LookUpStrata. It is becoming increasingly common for strata schemes, particularly our older strata schemes, to run up against a capacity problem. The problem, quite simply, is that we are using more and more energy but our aging building stock is not coping as our buildings were not designed 40, 30 or even 20 years ago with today’s energy needs in mind. It means that in many buildings the installation of new air conditioners, EV chargers or even in some schemes the installation of new power-hungry kitchen appliances like ovens and rangehoods will be the tipping point where existing electrical systems are not longer able to cope.

There are a number of approaches available to owners corporations. They are:

The Ostrich Approach. Here the tactic is to ignore the issue. At best owners corporation’s require lot owners who wish to install any new works or systems such as EV chargers or ACs to overhaul their lot’s meter. Sometimes they say you must as a condition of approving your works do work to ensure capacity for the whole building. Essentially, the owners corporation is putting to one side the overall energy capacity for the building. By sticking their heads in the sand and not addressing the issue, at some point the electrical system is going to reach capacity and potentially start to fail. This may then require special levies or loans to fund urgent work.

The Blanket Ban Approach. This tactic recognises that there is an issue with the building’s energy capacity. However, rather than to address it the approach is to say ‘no’ and refuse to permit any new installations. The issue here is that it perpetuates an inequality favouring lot owners with existing systems and could be argued to unnecessarily restrict a lot owner’s proprietary right to enjoy their property and or the refusal be considered to be unreasonable. On a wider view, it does not address the underlying issue.

The Status Quo Approach. This is a variation of the Blanket Ban Approach (and has the same issues). While the scheme recognises an issue with the building’s energy capacity and in reaction prohibits the installation of specific new works sunless the works have approximately the same power draw as is being currently used in an attempt not to rock the boat and require an electrical overhaul of the building. This is a stop gap measure at best as it does not address the use increasing use of energy in the home for example for home security such as ring doorbells, monitoring pets such as pet cameras and feeding devices, interconnected smart devices such as fridges, TVs and washing machines and electronic devices such as e-scooters.

The We Are Working on It Approach. This is where a scheme realises there is current issue or that there will be a future issue. The scheme will obtain advice on their existing energy needs and current capacity and what future needs look like. Advice will also be taken on what is required to meet future needs and a plan be established for these works. These schemes may acknowledge current issues by restricting the installation of say EV chargers in every lot as to not overload the current system and at the same time install common property chargers to meet the occupant’s need for these chargers. They may also introduce by-laws that permit the installation of air conditioning systems but specify their maximum power draw. In the meantime, as a longer-term project the scheme considers its future energy capacity, the scope of work required and costings so as start raising the required funds over time. This approach has a lot of merit. It acknowledges there is an issue, puts in place systems to deal with the current capacity and a plan to address the issue in the future in a way that allows the owners corporation to raise funds over time.

The Future Proofing Approach. Here scheme’s will acknowledge that there is an issue, conduct energy audits and obtain expert advice on both the current and expected future usage resulting in a scope of work to overhaul the current electricity system for the building. That scope of work is then put to tender and the works conducted to future proof the building. While this is the gold star approach it is not for all schemes. This is because this a large, time consuming project. Not all strata committees have the time or the energy to undertake the work, particularly if there are urgent repairs to be conducted. Also, not all schemes have the funds (consultants cost money) or the inclination (lot owners may not obtain a direct benefit and this falls into the not-my-problem category) to be able to so. The benefits are however that the owners corporation is proactively managing its assets and funds to ensure it future proof’s the scheme.

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For lot owners who are concerned about their scheme’s energy capacity then they should start raising the issue within their scheme. The first step would be to request the owners corporation obtain an audit of the current energy use and the current infrastructure. Advice could then be obtained on what capacity would be required in the future and on the works required to ensure this.

If energy capacity becomes an issue that is swept under the carpet or ignored then schemes will very likely be forced to act. Why? By-laws restricting what can be installed may be considered harsh, unconscionable or oppressive and invalided by the Tribunal, works by-laws that are refused may be considered to have been unreasonably refused by the Tribunal and be ordered made. There is also going to be a point where the electrical system is either not functioning satisfactorily or falls into a state of disrepair which would make the owners corporation in breach of its obligation under section 106(1) of the Strata Schemes Management Act 2015. this would make it open for the Tribunal to make works orders and, if a lot owner suffers a loss due to this failure, damages orders.

If not planned for it can cause a significant headache for schemes due to unplanned, potentially expensive work. The question then is whether an overhaul of the electrical capacity of the building is a repair or an upgrade (requiring a special resolution at a general meeting) but this is a topic for another blog.

Where lot owners have been denied the ability to install new kitchen appliances such as rangehoods or AC or EV chargers then they should obtain advice specific to their circumstances on whether refusal refusal is open to challenge in the NSW Civil & Administrative Tribunal.

Allison Benson
Kerin Benson Lawyers
E: [email protected]
P: 02 4032 7990

This is general information and should not be considered to be legal advice. You should obtain legal advice specific to your individual situation.

This post appears in Strata News #733.

This article has been republished with permission from the author and first appeared on the Kerin Benson Lawyer website.

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