NSW: Q&A Common Property Defects and Reimbursement for Repairs

The following questions are from New South Wales strata lot owners asking about costs and reimbursements for repairs required due to common property defects.

Table of Contents:

• QUESTION: Our tiled balcony has leaked into the unit below. The OC has quotes for repairing the membrane. Can I insist on tiles? Who moves the large pot plants so work can commence?


• QUESTION: We agreed to a cash settlement to fix water damage to our roof from a storm. The owners corporation will only release funds when the work is complete. Where do we stand?


• QUESTION: An owner has cracks in the internal walls of the lot. Is it the owners corporation’s responsibility to investigate the cause of the cracks?


• QUESTION: I claimed on the strata insurance. The insurance paid the money to the owners corporation to be reimbursed to me when work was completed. Months later, I still haven’t received the money. Can the owners corporation withhold my money?


• QUESTION: Due to loose wiring connections in my new unit’s internal switchboard, I have an invoice for an after hours callout from an electrician. Who pays the bill?


• QUESTION: If alterations or improvements have been made to common property without approval, should the lot owner be reimbursed?


• QUESTION: We located a leak. The insurer’s builder has quoted a delay before work can commence. We are worried about mould. Can we speed up the repair process?


• QUESTION: Would the lack of adequate stormwater drainage and the absence of a waterproofing membrane on a balcony be the owners corporation’s responsibility?


• QUESTION: Despite repeated requests, the OC has failed to rectify water ingress defects in my unit. Can I seek reimbursement for nuisance and loss of income from them for not addressing the defects?


• QUESTION: Due to building defects, we are unable to clean and service our air conditioner grills. Who is responsible for fixing the defect so we can access the space?


• QUESTION: We recently purchased a rooftop apartment and had approval for terrace works. The renovations uncovered defects with the tiles and efflorescence. Who pays for the repairs of the defects?


• QUESTION: Our tenant had to move out for the duration of common property works. Shouldn’t the OC cover any reasonable costs such as alternative accommodation for the tenant?


• QUESTION: As a result of a burst pipe, our gas and electricity bills associated with hot water have increased. I can’t find any mention of this in our insurance policy PDS. If the responsibility for the repair falls to the owners corporation, should they also cover these increased expense?


• QUESTION: The Strata Manager sent their plumber to fix a plumbing issue in my lot. The repair required the replacement of a tap, and a promise from the plumber to be back in 2 weeks with the matching fitting. It’s been over a month. What do I do?


• QUESTION: A plumbing issue flooded my 2 yr old apartment. The original construction plumbers investigated and located the issue, admitting responsibility. They are coming back to patch the holes in the walls and the damage caused, but are they responsible for my ruined timber flooring?


• QUESTION: An owner retiled over existing balcony tiles without approval and now the waterproofing below the original tiles has failed. Who fixes what?


• QUESTION: The committee will not repair a rotting timber balustrade on my balcony. Can I organise the repair myself and withhold levies to the value of the work?


• QUESTION: Our Owners Corporation is claiming against the builder for defects that the builder refuses to repair. Can the OC refuse to fund these repairs?


• QUESTION: Our committee suffered damage to common property due to faulty workmanship. Should the strata manager and committee instigate an insurance claim before recouping cost of repairs from lot owners?


• QUESTION: The waterproofing on my balcony needs repair. If the decking on the balcony is damaged during the repair, is the owners corporation responsible to replace it?


• QUESTION: A lot owner in our 25 yr old building allowed the bathroom to deteriorate to the point that major waterproofing work is required. Is this, and the subsequent cost of the bathroom, at the cost of the owners corporation?


• QUESTION: The Owners Corporation is undertaking remedial waterproofing on a common property rooftop terrace which is included in our title. They have asked us to move our large pots and spa. Shouldn’t this be there cost?


• QUESTION: My bathroom is being repaired by the owners corporation. Their appointed builder does not return calls. What are my rights to select my own builder?


• QUESTION: A roof leak and has caused water damage to some ceiling and walls. What repairs are the owners corporation responsible for?


• QUESTION: If an issue in common property leads to flooding in the unit and damage to the unit, is the owners corporation responsible to repair or reimburse the costs incurred to fix the damage?


• QUESTION: The roof on our older building needs the waterproofing checked but the committee is unable to reach a decision. We are awaiting mediation, but what else can we do?


• QUESTION: Sewer water from the unit above has leaked and caused damages to the unit below. Pipes are concealed in the wall and not visible. Can we ask the owners corporation to facilitate professional inspection to determine the exact damages to pipes and get it repaired appropriately to prevent Leaks in the future?


• QUESTION: How long must a lot owner wait for a reimbursement for waterproofing the bathroom? What can I do to obtain a resolution?


• QUESTION: We have received strata approval to lay new laminate on the floor of our apartment. The original concrete floor is not level and needs levelling at a cost of $2000. Would this be strata responsibility?


• QUESTION: There is no insulation under the concrete roof of my top floor apartment. On hot days, the apartment is basically unliveable. Is the Owners Corporation responsible for this problem?


• QUESTION: I had a split water pipe in the cavity wall between my bathroom and laundry. I contacted the strata and they said it was not their responsibility. So who can I claim the works cost back from?


• QUESTION: A resident reported a blocked drain to me. I’m a committee member. I relayed this to the other 4 committee members with no reply. The repair has been completed and 3 of the 5 committee members are refusing the invoice stating the correct procedure was not followed.


• QUESTION: Water has entered the external wall of our building and has damaged a section of the floating floor of a lot owners apartment. Is the repair the responsibility to be compensated by the buildings insurance?


• QUESTION: A builder has confirmed I have water between my tiles and the waterproofing layer in my bathroom. I have contacted strata. What do I do now?


• QUESTION: I’m renovating my unit’s flooring. The flooring has magnesite and needs to be repaired by the OC first. Should they draft the bylaw for the renovation?


• QUESTION: Fire updates within our complex Led to the installation of a box cover over my bathroom vent which caused massive problems with mould in the bathroom. How can I get this fixed?


• QUESTION: We discovered a leak in the ceiling of our newly renovated bathroom. Strata will fix but will cover the repair hole with a vent. We’d like it returned to the condition it was in prior to the leak.


• QUESTION: A lot owner put down a hard floor under a special bylaw to transfer the obligation of maintenance of the surrounding common property to the lot owner. We now need to dig up the floor for a pipe repair and they are not being cooperative.


• QUESTION: While carrying out kitchen renovations, engineering work was required to repair concrete cancer in the floor. Can I be reimbursed the substantial costs for repairs to common property defects?


• QUESTION: Water damage was caused to a lot owner’s floating floor boards from a common property defect. Aren’t internal floor coverings the responsibility of the lot owner?


• QUESTION: Our hardwood floors have suffered major water damage due to common property defects. Should the Body corporate reimburse out of pocket expenses for accommodation and food while we vacate the property for repairs?


• QUESTION: Our bathroom’s waterproofing membrane has failed and is causing damage to the lot below. Should the Owners Corporation be responsible for all repairs, as these are only needed due to common property defects?


• QUESTION: Due to a common property defect, my tiles were damaged in an area on my verandah. As the tiles could not be matched, the whole space must be retiled. Should the OC pay for all work?


• QUESTION: The floor in a lot’s kitchen has to be repaired because of concrete cancer. The lot owner now wants the owners corporation to pay for a new kitchen.


• QUESTION: One lot owner has put in a claim for over $6000 from the owner’s corporation for bathroom renovations.


• QUESTION: A lot owner wants reimbursement for repairs required due to common property defects, although they did not follow the correct process. Should the Owners Corporation appease this lot owner?


• QUESTION: Who is Responsible for sanding and polishing floorboards?

Question: Our tiled balcony has leaked into the unit below. The OC has quotes for repairing the membrane. Can I insist on tiles? Who moves the large pot plants so work can commence?

I live in a Sydney apartment in a block of 12 units. I have a large tiled balcony. Unfortunately, water is leaking from the balcony into the unit below. The owner’s corporation has received quotes for a new waterproof membrane.

The committee would like to paint the balcony. Can I insist on tiles? I have large pot plants on the balcony. Am I responsible for moving these?

Answer: You are responsible for moving the pots on your balcony.

An owners corporation has the statutory obligation to maintain and repair common property in accordance with section 106 of the Strata Schemes Management Act 2015 (“the Act”).

The owners corporation has the obligation to properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation.

You would need to show why the tiles would be necessary and whether they fall under section 106 of the Act.

You are responsible for moving the pots on your balcony.

Pierrette Khoury Khoury Lawyers E: pierrette@khourylawyers.com.au P: 0415 459 486

This post appears in Strata News #690.

Question: We agreed to a cash settlement to fix water damage to our roof from a storm. The owners corporation will only release funds when the work is complete. Where do we stand?

Our unit had storm damage. We agreed to a cash payout to replace roof tiles and repair and paint the bedroom ceilings.

Insurance arranged the claim, and we signed a deed of release for around $4000 to complete the repairs.

The insurer paid the money into the owners corporation trust fund. The owners corporation will only release the funds to us when the work is complete. The insurer agrees that the cash settlement should be released so repairs can be completed. Isn’t that the purpose of a cash settlement?

Where do we stand? If we experience another storm, the roof can still leak.

Answer: It is common practice among owners corporations to reimburse the owner directly upon receipt of a cash settlement, enabling them to undertake repairs without delay.

For the application of insurance funds in strata schemes, it’s crucial to reference Section 163 of the Strata Schemes Management Act 2015. This section clearly outlines the responsibilities of an owners corporation in managing insurance money from claim payouts.

A key point of discussion is the Act’s requirement for the immediate application of these funds for repairs. This raises an important question: Does requiring an owner to pay for repairs before releasing the funds comply with the legislation? “Immediately applying” suggests a prompt action, which could be interpreted as conflicting with asking owners to front the cost.

Moreover, it’s essential to recognise that the owner is an insured party under the policy. When the settlement pertains to their lot, the funds are inherently intended for the lot owner to repair their property. For this reason, it is common practice among owners corporations to reimburse the owner directly upon receipt of a cash settlement, enabling them to undertake repairs without delay. This approach best aligns with legislative requirements.

If the committee has concerns about the utilisation of funds or the specifics of a cash settlement, the committee should engage in a transparent discussion with the owner about their specific concerns.

Applicable Legislation – Strata Schemes Management Act 2015

163 Use of insurance money by owners corporation

1. An owners corporation that receives money from an insurer for the destruction of or damage to a building must immediately apply that money in rebuilding, replacing, repairing or restoring the building.


2. This section does not apply to an owners corporation if the owners corporation determines, by unanimous resolution, that the money is not to be so applied.


3. This section is subject to any order made under the Strata Schemes Development Act 2015.

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in the March 2024 edition of The NSW Strata Magazine.

Question: An owner has cracks in the internal walls of the lot. Is it the owners corporation’s responsibility to investigate the cause of the cracks?

Our strata plan consists of free-standing townhouses.

One lot has cracks in the bathroom along the internal walls and bathtub. The cracks do not appear on the external walls of the townhouse. The lot owners have requested an investigation of the doomer roof underneath the bathroom to determine whether the cracks are structural. Would the investigation be the cost of the owners corporation?

Answer: It would be prudent to have the owners corporation’s experts investigate the cause/source of the defect to determine who bears what responsibilities and liabilities.

Though internal walls are generally within the cubic air space of a lot (and therefore lot responsibility) if a defect in the common property causes damage to lot property, the owners corporation is liable to rectify the common property defect and any consequential damage to lot property, e.g. internal walls, bathtub.

It would be prudent to have the owners corporation’s experts investigate the cause/source of the defect to determine who bears what responsibilities and liabilities, e.g. common property defect or potential cracks caused by unlawful works by the subject or another lot or neighbouring development, etc.

The owners corporation’s expert will be able to opine on whether it is necessary to access/open the dormer roof and/or if investigative or alternative access/inspection is advisable.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in the December 2023 edition of The NSW Strata Magazine.

Question: I claimed on the strata insurance. The insurance paid the money to the owners corporation to be reimbursed to me when work was completed. Months later, I still haven’t received the money. Can the owners corporation withhold my money?

I made an insurance claim on the strata insurance. The claim was approved. The owners corporation instructed the insurance company to deposit the money in the strata account for accounting purposes. The owners corporation instructed me to pay for the approved repairs and send receipts for reimbursement.

After three months, I’m still waiting on the reimbursement of my money. I’ve been told the owners corporation is chasing $12k in arrears. Once the late levies have been paid, they can pay me. They have offered to credit the amount to future levies, but I need the money now.

Can the owners corporation legally withhold the insurance claimed money?

Answer: The strata cannot withhold your reimbursement.

In the first instance, you should demand immediate reimbursement and ask that a special levy be raised due to their shortfall in funds. If the funds were properly due to you, the strata cannot withhold your reimbursement.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in the December 2023 edition of The NSW Strata Magazine.

Question: Due to loose wiring connections in my new unit’s internal switchboard, I have an invoice for an after hours callout from an electrician. Who pays the bill?

I recently had to pay an electrician for an after hours callout to my unit. There was a total power outage to only my unit. The electrician stated this was caused by loose electrical wire connections behind my unit’s internal switchboard.

As no work has been carried out on the switchboard in my unit since I bought the unit, and the wiring seems to have been loose since construction, is this repair the responsibility of the owners corporation?

Answer: Fuses/fuse boards serving only that lot and electrical wiring in non-common property walls within a lot and serving only that lot are the responsibility of the individual owner).

While it may seem unfair in your case, the general position is that fuses/fuse boards serving only that lot and electrical wiring in non-common property walls within a lot and serving only that lot are the responsibility of the individual owner, rather than the owners corporation.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #661.

Question: If alterations or improvements have been made to common property without approval, should the lot owner be reimbursed?

The exterior of our eight villa complex needs painting. At the AGM, we decided there was not enough money available to carry out the works, and further discussion would occur later if levies were available.

Three owners would not wait and, without approval, paid to have their villas painted. A year later, we had enough owners corporation funds to paint the remaining five villas.

The three villas who paid for painting have requested the owners corporation reimburse them.

If alterations or improvements have been made to common property without approval, should the lot owner be reimbursed? Would this apply in our case?

Answer: An owners corporation is under no obligation to reimburse a lot owner who has chosen to repair or maintain common property by their own accord.

Section 111 of the Strata Schemes Management Act 2015 (NSW) (‘the Act’) expressly prohibits an owner from undertaking work to common property unless they are authorised:

1. by the owners corporation:
   
   1. by special resolution; or
   
   
   2. in accordance with its by-laws; or


2. by any other way mentioned in Part 6 of the Act, such as:
   
   1. by special resolution authorising an owner to add to, alter or erect new structures on common property;
   
   
   2. undertaking cosmetic work or minor renovations;
   
   
   3. by way of a licence to use common property; or
   
   
   4. by way of a lease of part of the common property.

On that basis, an owners corporation is under no obligation to reimburse a lot owner who has chosen to repair or maintain common property by their own accord.

The owners corporation is fundamentally responsible for and therefore has control over who performs work to common property.

This is not to say that an owners corporation cannot enter into an agreement with an owner about such matters (either before or after works).

If an owners corporation were to decide to approve unauthorised works retrospectively, a special resolution would be required in accordance with section 111(c) of the Act.

Tim Sara Strata Choice E: tsara@stratachoice.com.au P: 1300 322 213

This post appears in the August 2023 edition of The NSW Strata Magazine.

Question: We located a leak. The insurer’s builder has quoted a delay before work can commence. We are worried about mould. Can we speed up the repair process?

We own and live in our apartment with our two children. We noticed a leak in the apartment a few months ago. The leak was between the internal wall and the block work under our kitchen sink.

The strata insurance has a $5K excess. The builder has provided a quote of $8K. We haven’t received a building inspection report or itemised quote despite the inspection taking place a month ago.

The builder has given at least a 5-week wait before he can attend to start an invasive investigation under the sink and carry out repairs.

Is there any way the repair can be fast-tracked? We are concerned about the health implications if there are delays. My partner has a medically identified mould/mildew allergy and is taking medication to cope.

Answer: The repair process can be faster if you use your own repairer.

Owners are able to engage their own local repairers. In fact, this can sometimes be a better option as the cost of repairs for the insurer’s repairers can be higher due to project management fees associated with the insurer’s repairers.

The repair process can also be faster if you use your own repairer.

It must be noted the insurer does not guarantee the work of any tradesperson they do not engage and therefore, the owner will need to take any workmanship issues up with the builder themselves.

If you are using your own builder, we suggest you arrange a quote and submit it for the insurer to confirm coverage prior to work starting. As your reasoning for using an alternate builder, include your health concerns due to the mould.

Given the health issues, consider whether it is appropriate to ask the insurer to consider the Temporary Accommodation benefit under the policy. This is designed to offer temporary accommodation when the property is uninhabitable or unfit to be occupied for its intended purpose.

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in the June 2023 edition of The NSW Strata Magazine.

Question: Would the lack of adequate stormwater drainage and the absence of a waterproofing membrane on a balcony be the owners corporation’s responsibility?

Would the lack of adequate stormwater drainage under a slatted wooden floor on a balcony and the absence of a waterproofing membrane on the concrete balcony floor be the owners corporation’s responsibility? The lot owner carried out pre-purchase inspections of the owners corporation’s records under the legal principle of “caveat emptor”?

Does this principle apply under current legislation? Does the owners corporation have any protection at law?

Answer: Generally speaking, the owners corporation will be responsible for any structural elements of the building.

It’s difficult to provide any specific feedback without more information. Generally speaking, the owners corporation will be responsible for any structural elements of the building itself. This usually includes balconies.

It sounds like there have been some water ingress issues in this case and it appears that some wooden slats sit on top of the balcony floor. If the slats have been installed by the owners and they have resulted in water ingress, there may be issues in holding the owners corporation responsible for any water damage.

If the drainage system from the balcony is insufficient to drain water from the balcony effectively, the owners corporation may be responsible. It’s not so much an issue of whether the purchaser undertook due diligence before purchasing the property. Rather it will be a question of whether the balcony is considered part of the common property of the building or part of the lot.

Michael Ferrier Eyeon Property Inspections E: michael.ferrier@eyeon.com.au P: 02 9260 5510

This post appears in the March 2023 edition of The NSW Strata Magazine.

Question: Despite repeated requests, the OC has failed to rectify water ingress defects in my unit. Can I seek reimbursement for nuisance and loss of income from them for not addressing the defects?

My unit has had water ingress since March 2022. Despite repeated requests, the OC has failed to rectify the defect.

The OC is in legal discussion with the builder to fix all defects, including my water issue. These discussions have dragged on for nealry 8 months with no date set for rectfication or when the deed will be signed between the OC and the builder.

Meanwhile, water issues continue. I purchased a new property to move into but I’ve had to let it until the water ingress issues have been fixed in my current residence.

What orders can I seek in relation to the nuisance, potential loss of income as i cant seem to let my existing unit and had to rent my new property that I had intended to move into. The OC declined to attend mediation at NSW Fair trading, so I’m wondering how to approach NCAT for relief and what orders or compendation I should be seeking. What are my chances of any relief?

Answer: You could seek payment of reasonably foreseeable damages for the breach of the owners corporation’s duty to repair and maintain the common property.

You would likely seek an order under section 232 of the Strata Schemes Management Act 2015 (‘the Act’) that the owners corporation comply with their duty to repair and maintain the common property under section 106 of the Act. You could also seek payment of reasonably foreseeable damages for the breach of the owners corporation’s duty to repair and maintain the common property under section 106(4) of the Act.

Please note that the owners corporation can defer compliance with their duty to repair and maintain the common property whilst they are ‘taking action’ against the builder.

Matthew Jenkins Bannermans Lawyers E: enquiries@bannermans.com.au P: 02 9929 0226

This post appears in Strata News #623.

Question: Due to a building defects, we are unable to clean and service our air conditioner grills. Who is responsible for fixing the defect so we can access the space?

Due to building defects, we are unable to clean and service our air conditioner grills. There is an access panel, but it goes nowhere.

Who is responsible for adjusting the roof space and access panels so that we, as owners, can access the area to clean and service the unit?

Answer: Has the Owners Corporation taken action against anyone for the building defects?

While the Owners Corporation is responsible to repair and maintain the common property, Section 106(4) of the Strata Schemes Management Act, 2015 (NSW) states:

If an owners corporation has taken action against an owner or other person in respect of damage to the common property, it may defer compliance with subsection (1) or (2) in relation to the damage to the property until the completion of the action if the failure to comply will not affect the safety of any building, structure or common property in the strata scheme.

Has the Owners Corporation taken action against anyone for the building defects?

Does your issue impact on health or safety? If so, and if the air-conditioning is an item of common property, you should write to your strata manager and advise them of urgent temporary measures which should be undertaken by the Owners Corporation but also provide the builder the first opportunity to repair or provide a temporary repair to mitigate any loss.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #619.

Question: We recently purchased a rooftop apartment and had approval for terrace works. The renovations uncovered defects with the tiles and efflorescence. Who pays for the repairs of the defects?

We bought our rooftop apartment in Sydney around 12 months ago. On the terrace, there were a lot of timber tiles laid by the previous owners some years ago, and pot plants they had left behind. At our last AGM, we applied for outdoor renovations that included removing the temporary timber tiling. We were given permission to proceed with this work.

When we removed the old timber tiles we discovered two significant problems: 

1. The original ceramic tiles underneath the timber tiles have all been permanently stained with what looks like a bleaching effect from efflorescence, and 


2. The tiles themselves are showing distinct signs of water penetration, lifting up, grout & silicone damage. Our complex is 12 years old.

Rectifying this cosmetically and structurally will cost from $42,000 to $112,000. Who is liable for this cost? Is it the previous owners, the owners corporation, the new owners?

Answer: Taking a patch and repair approach can lead to issues with the contractor providing warranties, particularly when you are dealing with waterproofing components.

James McIntosh, Sedgwick:

A comprehensive repair, down to the substrate of the balcony, doors out, balustrade walls wrapped etc is what is required.… not an isolated repair as the lot owner indicates is their preference.

We would also note that taking a patch and repair approach can lead to issues with the contractor providing warranties, particularly when you are dealing with waterproofing components (e.g. waterproofing membranes), full replacement is what would be required in most instances for a contractor to provide warranty of the works.

Leanne Habib, Premium Strata:

Subject to any notations on the strata plan and any special by-laws applicable to the scheme and provided that the tiles were in situ at the time of the registration of the strata plan, usually, the ceramic tiles and what is beneath them (eg waterproofing) is common property and therefore the responsibility of the Owners Corporation.

In terms of whether you may recover any costs from the previous owners for “latent” defects, you will need to consult with the conveyancer/lawyer who acted on your purchase.

James McIntosh Sedgwick Building Consultancy division E: james.mcintosh@au.sedgwick.com P: 0415 459 486

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in the October 2022 edition of The NSW Strata Magazine.

Question: Our tenant had to move out for the duration of common property works. Shouldn’t the OC cover any reasonable costs such as alternative accommodation for the tenant?

Bathroom repairs had to be undertaken in a tenanted one bathroom apartment due to water membrane failure. This was deemed common property.

The tenant had to move out for the duration of bathroom works. The Owners Corporation has refused requests to cover the tenant’s relocation costs.

As the bathroom repair has been deemed common property, shouldn’t the OC cover any reasonable costs such as alternative accommodation for the tenant?

Answer: We would recommend first seeking to make a claim for damage along with any loss of rent with your strata insurer and get a formal response.

In this instance, the insurer will not cover maintenance costs associated with finding and fixing the damaged membrane due to exclusions applying (such as lack of maintenance, rust, oxidation, wear & tear, corrosion, gradual deterioration, developing flaws, building defects, rectification of faulty workmanship etc.)

However, water damage resulting from the leak can be considered provided the damage is sudden and accidental. If the property becomes uninhabitable due to the insured damage, the policy can also consider loss of rent cover.

We would recommend first seeking to make a claim for damage along with any loss of rent with your strata insurer and get a formal response.

Should the insurance claim not be successful, it would fall on the lot owner demonstrating the owner’s corporation are legally liable for the loss.

If you are seeking the owners corporation to make payment for your loss because you believe they are legally responsible, to start with you will need to send a letter of demand which outlines the circumstances, why you feel the owners corporation are responsible and the amount you are seeking compensation for. Alternatively, you can visit the fair trading website for further information on resolving disputes.

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in the October 2022 edition of The NSW Strata Magazine.

Question: As a result of a burst pipe, our gas and electricity bills associated with hot water have increased. I can’t find any mention of this in our insurance policy PDS. If the responsibility for the repair falls to the owners corporation, should they also cover these increased expense?

Answer: If the owners corporation are responsible for maintaining the pipe, there may be a legal argument that they are responsible for the costs.

Cover for excess water usage will differ from insurer to insurer – for example, some insurers will offer cover if the insured property is damaged by an event covered by the policy. If the claim is just for a burst pipe from wear and tear, the policy usually does not respond.

The question of who is responsible for the water expense outside of an insurance claim best fits with a legal or strata management professional. If the owners corporation are responsible for maintaining the pipe, there may be a legal argument that they are responsible for the costs.

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in the September 2022 edition of The NSW Strata Magazine.

Question: The Strata Manager sent their plumber to fix a plumbing issue in my lot. The repair required the replacement of a tap, and a promise from the plumber to be back in 2 weeks with the matching fitting. It’s been over a month. What do I do?

The common property isolation valve in the bathroom wouldn’t function. The Strata Manager was advised and he sent their plumber to fix it. The plumber replaced the chrome tap with a brass tap (changing look of bathroom) and advised at time it would be replaced with a chrome tap in approx 2 weeks. 

The plumber and Strata Manager continue to inform me that the plumber will be in contact to fix and replace the tap but nothing has happened and now it has been over 1 month. 

Are there time limits on repairs? What can I do?

Answer: There is no failure to fulfil a function until 2 months have elapsed.

There is no failure to fulfil a function until 2 months have elapsed, so keep accurate records of your repeated requests in case you wish to pursue the matter through mediation (and possibly NCAT).

While the owners corporation has rectified the defect, it also has a duty to match the fittings as closely as possible in appearance and value to the existing fittings so as not to detract from the appearance or value of the lot.

Technically, however, there is no failure to fulfil a function until 2 months have elapsed, so keep accurate records of your repeated requests in case you wish to pursue the matter through mediation (and possibly NCAT).

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #587.

Question: A plumbing issue flooded my 2 yr old apartment. The original construction plumbers investigated and located the issue, admitting responsibility. They are coming back to patch the holes in the walls and the damage caused, but are they responsible for my ruined timber flooring?

My 2 year old apartment flooded. I called the plumbing firm who had installed the plumbing in our block of apartments during construction.

Water could be heard from behind the fridge cavity and after three large holes in the gyprock, finally located two pipes that had not been crimped during installation.

After fixing the pipes, they submitted a full report admitting responsibility for the issue. They are coming back to patch the walls and clean up. My timber flooring was damaged during the event. Are they also responsible for replacing my ruined timber floor?

Answer: It is worth trying to claim on insurance through the owners corporation.

It seems like this is a building defect from the time the building was originally built. If it is a recent building then a claim could be made under either the Home Building Act 1989 or the Design & Building Practitioners Act 2020 if the scheme’s insurer does not respond to the claim.

Even if they were common property pipes, then many insurers have exclusions for covering building defects. It is worth trying to claim on insurance through the owners corporation. They can only say no. If they decline the claim then if the pipes were common property then you have a right to claim for damages against the owners corporation under s106(4) & (5) of the Strata Schemes Management Act 2015 provided that you make the claim within two years of incurring the loss.

Allison Benson Kerin Benson Lawyers E: allison@kerinbensonlawyers.com.au P: 02 4032 7990

This post appears in Strata News #584.

Question: An owner retiled over existing balcony tiles without approval and now the waterproofing below the original tiles has failed. Who fixes what?

An owner retiled over the existing balcony tiles without approval from the owners corporation. No bylaw for the work exists. The existing waterproofing below the original tiles has failed.

How should we proceed? Is the owner responsible for removing the top layer of tiles and retiling and the owners corporation responsible for the original tiles and waterproofing?

Answer: The Owners Corporation can take steps for a by-law to be approved retrospectively this will also deal with ongoing maintenance obligations.

The Owners Corporation can take steps for a by-law to be approved retrospectively this will also deal with ongoing maintenance obligations by the owner. Arguably and I would need to review the By-laws of the scheme for a more definitive answer, the Owners Corporation could request the unauthorised works be removed and reinstated to their original condition. The Owners Corporation obligation’s role is to properly maintain and keep in a state of good and serviceable repair the common property.

Pierrette Khoury Khoury Lawyers E: pierrette@khourylawyers.com.au P: 0415 459 486

This post appears in Strata News #572.

Question: The committee will not repair a rotting timber balustrade on my balcony. Can I organise the repair myself and withhold levies to the value of the work?

It took 6 months for our strata committee to agree on a quote to repair and replace a rotting timber balustrade on my common property balcony. I have had an unsafe balustrade for 7 months now with no rectification in sight.

Can I obtain my own quotes and repair the defect myself? Once repairs have been completed, can I send the bill to the committee for reimbursement or withhold strata levies to the value of the repair?

Answer: Owners cannot undertake repairs to common property and then expect to be reimbursed.

An owners corporation has a fundamental duty to repair and maintain its common property in accordance with section 106 of the Strata Schemes Management Act 2015 (NSW) (‘the Act’).

In this scenario, the owners corporation appears to have failed in its duty and attempting mediation is the correct first step.

On many occasions, the Courts have upheld the view that an owners corporation owns and is responsible for making decisions on how it repairs and maintains its common property. For that reason, owners cannot undertake repairs and then expect to be reimbursed. In fact, section 111 of the Act expressly prohibits it unless under specific circumstances.

Also, the non-payment of contributions (levies) is not considered by the Courts as an appropriate or relevant course of action, as evidenced by many cases in relation to debt recovery. The saying “two wrongs do not make a right” comes to mind. These are separate issues.

Owners have the right to seek orders from the Tribunal requiring an owners corporation to undertake repairs and maintenance to common property if it fails to do so. An application can be made to the Tribunal now that mediation has been attempted.

Tim Sara Strata Choice E: tsara@stratachoice.com.au P: 1300 322 213

This post appears in the May 2022 edition of The NSW Strata Magazine.

Question: Our Owners Corporation is claiming against the builder for defects that the builder refuses to repair. Can the OC refuse to fund these repairs?

Our Owners Corporation is claiming against the builder for defects that the builder refuses to repair, including the following:

• drummy balcony tiles


• water damage that has come from apartment above


• other defects

Can the OC refuse to fund these repairs? My apartment is 2.5 years old and in a multi level complex. What are my next steps?

Answer: If the Owners Corporation is making a claim from the builder for building defects, it does have the power to defer compliance with its obligations.

If the Owners Corporation is making a claim from the builder for building defects, the Owners Corporation does have the power to defer compliance with its obligations pursuant to section 106 of the Strata Schemes Management Act 2015.

106 Duty of owners corporation to maintain and repair property

This is contained in section 106(4) which relevantly provides:

If an owners corporation has taken action against an owner or other person in respect of damage to the common property it may defer compliance with subsection 1 or 2 in relation to the damage to the property until the completion of the action if the failure to comply will not affect the safety of any building, structure or common property in the strata scheme.

The effect of the above will mean that the Owners Corporation may defer compliance with its obligation to properly maintain and keep in a state of good and serviceable repair the common property vested in the Owners Corporation if it deems that the work identified in your email will not affect the safety of the building, structure or common property in the strata scheme.

Pierrette Khoury Khoury Lawyers E: pierrette@khourylawyers.com.au P: 0415 459 486

This post appears in Strata News #557.

Question: Our committee suffered damage to common property due to faulty workmanship. Should the strata manager and committee instigate an insurance claim before recouping cost of repairs from lot owners?

Our Strata Manager and Committee approved a person unknown to the Owners Corporation to carry out a $90,000 Major Capital Works Job to replace 12 large Planter Boxes and a 300 sq meter courtyard. The contractor didn’t construct the stormwater runoff correctly and in a recent storm a unit was flooded.

The Strata Manager and Strata Committee then appointed a plumbing company the $30,000 job to remediate the tradesman’s mistake. They held an EGM stating all owners needed to contribute to the $30,000 invoice. There has been no mention of claiming the cost of the repair work against our strata insurance.

What were the options available to the Strata Manager and Committee? Are they required to pursue insurance claims before passing costs onto Owners?

Answer: In this instance an insurance claim would not be a viable option.

Strata insurance covers “sudden and accidental damage” and all policies I am aware of exclude costs associated with rectification of faulty workmanship.

In this instance an insurance claim would not be a viable option as the repair works are associated with rectifying faulty workmanship.

The committee may seek to obtain legal advice in relation to whether a claim may be made against the original contractor who installed the planter boxes.

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 07 3899 5129

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in the April 2022 edition of The NSW Strata Magazine.

Question: The waterproofing on my balcony needs repair. If the decking on the balcony is damaged during the repair, is the owners corporation responsible to replace it?

In my apartment I have an outside balcony deck that has waterproofing underneath. The waterproofing is leaking into the downstairs lot and is about to be repaired.

The owners corporation is paying for the waterproofing, but do they also pay to pull up the decking? It’s not my fault that it needs to be removed. If the decking is damaged during the repairs and can’t be reused, is the owners corporation required to replace the decking?

Answer: If the Owners Corporation concedes that the waterproofing is at its cost and responsibility, they are liable for any damage to your lot or any of its contents caused by carrying out such works, unless the damage arose because the Owners Corporation was obstructed or hindered.

If you installed the decking, you should have a by-law authorising such an installation, and, that by-law would likely specify whose ongoing responsibility the waterproofing and/or decking would be.

If your decking is an original installation, ie it was installed at the time of registration of the strata plan, the by-laws and/or strata plan may direct whose responsibility the deck and/or waterproofing are. For example, the deck may be wholly within your cubic lot space and wholly your responsibility.

As a general proposition, if the Owners Corporation concedes that the waterproofing is at its cost and responsibility, and carries out such works, the Owners Corporation is liable for any damage to your lot or any of its contents caused by the carrying out of such works, unless the damage arose because the Owners Corporation was obstructed or hindered. If the deck was installed by you, that arguably could be construed as you causing an “obstruction” – ie the Owners Corporation had to remove and potentially damage your deck in order to carry out its duties regarding waterproofing. On the other hand, if the deck is properly authorised or common property, it is likely that the Owners Corporation would be liable to rectify any damage or re-instate it if damage occurred.

In sum, it is difficult to determine with any precision whose responsibility damage to the deck would be where it is not known if the deck is an approved structure, lot or common property.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in the February 2022 edition of The NSW Strata Magazine.

Question: A lot owner in our 25 yr old building allowed the bathroom to deteriorate to the point that major waterproofing work is required. Is this, and the subsequent cost of the bathroom, at the cost of the owners corporation?

I own a lot in a 25 yr old villa complex. 

One of the previous owners allowed the original bathroom to deteriorate with water leaking behind the tiles on the floor and internal wall due to grout degradation. The new owner is saying that the waterproofing is compromised with some areas of dampness in the subfloor although no deterioration of same.

It has been difficult to get consistent advice from the plumber and builders. Some say the waterproofing is intact and others say that it is not.

Is the Owners Corporation fully responsible for what will be a new bathroom given that the previous owner had never requested preventative maintenance? There are still some original bathrooms over the 10 lots and all are in good repair. The new owner was fully aware of the problems prior to purchase. 

Answer: Regardless of the state of repair of the bathroom or that the owner was aware of the problems prior to purchase, the owners corporation is responsible to repair and maintain the waterproofing membrane and floor tiles.

The owners corporation has a strict duty to repair and maintain the common property tiles and waterproofing membrane. This is regardless of whether or not the current (or previous) owner performed or advised the owners corporation of any preventative maintenance.

A waterproofing membrane in a bathroom that was in place at registration of the strata plan would normally be common property. Under normal circumstances, a waterproofing membrane will last for a minimum of 10 years as this is the usual warranty provided by installers. If the villa complex is 25 years old, the waterproofing membrane could be expected to be reaching the end of its serviceable life.

I would suggest that the owners corporation engage a waterproofing expert to undertake testing to ascertain whether or not the waterproofing membrane requires repair or replacement and for the expert to suggest a scope of works for the repair or replacement.

Regardless of the state of repair of the bathroom or that the owner was aware of the problems prior to purchase, the owners corporation is responsible to repair and maintain the waterproofing membrane and floor tiles. This includes replacement of the waterproofing membrane and floor tiles if required. If the repairs or replacement damage lot property items, such as wall tiles, toilet, shower screen, vanity, the owners corporation is responsible to repair or replace those items on a like for like basis in accordance with section 122(6) of the Strata Schemes Management Act 2015.

David Bannerman Bannermans Lawyers E: enquiries@bannermans.com.au P: 02 9929 0226

This post appears in the December 2021 edition of The NSW Strata Magazine.

Question: The Owners Corporation is undertaking remedial waterproofing on a common property rooftop terrace which is included in our title. They have asked us to move our large pots and spa. Shouldn’t this be their cost?

The Owners Corporation is undertaking remedial waterproofing on a common property rooftop terrace which is included in our title. We have a spa and large pot plants and they want us as owners to pay for these to be moved for the waterproofing work to commence.

Who should pay for these to be moved? I thought this would be considered the Owners Corporation cost.

Answer: Your pots are an obstruction.

The Owners Corporation is exercising its rights under Section 122 of the Strata Schemes Management Act, 2015 (NSW) extracted below. The risk for you is that if your large pots and plants are damaged in the course of the Owners Corporation carrying out its duties, the Owners Corporation may not be liable because your pots were an “obstruction”. See paragraphs (5) & (6) below.

122 Power of owners corporation to enter property in order to carry out work

1. An owners corporation for a strata scheme may, by its agents, employees or contractors, enter on any part of the parcel of the scheme for the purpose of carrying out the following work:
   
   
   1. work required or authorised to be carried out by the owners corporation in accordance with this Act (including work relating to window safety devices and rectification work carried out under Part 11),
   
   
   2. work required to be carried out by the owners corporation by a notice given to it by a public authority,
   
   
   3. work required or authorised to be carried out by the owners corporation by an order under this Act.


2. An owners corporation for a strata scheme may, by its agents, employees or contractors, enter on any part of the parcel for the purpose of determining whether any work is required to be carried out by the owners corporation in accordance with this Act.


3. In an emergency, the owners corporation may enter any part of the parcel for those purposes at any time.


4. In a case that is not an emergency, the owners corporation may enter any part of the parcel for those purposes with the consent of any occupier of that part of the parcel or, if the occupier does not consent, in accordance with an order of the Tribunal under this Division.


5. A person must not obstruct or hinder an owners corporation in the exercise of its functions under this section. Maximum penalty: 5 penalty units.


6. An owners corporation is liable for any damage to a lot or any of its contents caused by or arising out of the carrying out of any work, or the exercise of a power of entry, referred to in this section unless the damage arose because the owners corporation was obstructed or hindered.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #526.

Question: My bathroom is being repaired by the owners corporation. Their appointed builder does not return calls. What are my rights to select my own builder?

My bathroom waterproofing has deteriorated. The building manager has viewed the bathroom and agreed the owners corporation will cover the repairs, including removing tiles, new waterproofing and retiling.

The owners corporation’s recommended building company does not return correspondence. As such, I do not wish to use their services and I have found my own builder who has provided a similar quote.

The OC have since advised that for an owners corporation funded repair, I must use their suggested builder. What are my rights to select my own builder?

Answer: The Owners Corporation have the right to use a preferred tradesman that they have ensured are vetted, insured and licensed to complete the works.

No works should be completed to common property without approval from the Owners Corporation.

Although the contractor selected isn’t as responsive as you would wish them to be, the Owners Corporation and their agent (e.g. an appointed Building Manager) have the right to use a preferred tradesman that they have ensured are vetted, insured and licensed to complete the works. If you were to undertake the works without approval you would run the risk of not being able to recoup the cost of the work, as they would be completed without authority.

You might be able to negotiate using your preferred contractor or even undertaking a renovation of the bathroom and receive a payout to complete the works yourself (although that would require approval as a renovation of this nature always must) but it sounds like this avenue has been explored.

If you are not satisfied with the progress being made due to the selection of contractor, remind the Owners Corporation of the requirement under Section 106 (5) of the Strata Schemes Management Act 2015 which specifies “An owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation.”. If you remain unsatisfied the correct avenue for you to take is through an application with NSW Fair Trading and if the desired outcome is not reached you have the right to make an application for an Order to NSW Civil and Administrative Tribunal.

Robert Fothergill Strata Life E: Robert@thestratalife.com.au P: 02 9456 9917

This post appears in the November 2021 edition of The NSW Strata Magazine.

Question: A roof leak has caused water damage to some ceilings and walls. What repairs are the owners corporation responsible for?

My roof has a leak and now there is water damage to the ceiling and walls of the toilet. There is extensive mould on the ceiling and watermarks and mould on the walls. What repairs are the owners corporation responsible for? Apart from the roof leaks do they have to repaint the ceiling and walls or am I responsible for the cosmetic repairs?

Answer: Some items are the responsibility of the Owners Corporation and some, the individual owners’ responsibility.

There are some matters raised by this question that are the responsibility of the Owners Corporation and some matters that relate to the individual owners’ responsibility. The roof is likely to be the responsibility of the Owners Corporation pursuant to section 106 of the Strata Schemes Management Act 2015.

You mention that there is water damage to the ceiling and walls of the toilet. This is also likely to be the responsibility of the Owners Corporation. Internal painting of walls are not common property are the responsibility of the lot owner.

Pierrette Khoury Khoury Lawyers E: pierrette@khourylawyers.com.au P: 0415 459 486

This post appears in the October 2021 edition of The NSW Strata Magazine.

Question: If an issue in common property leads to flooding in the unit and damage to the unit, is the owners corporation responsible to repair or reimburse the costs incurred to fix the damage?

If an issue in common property leads to flooding in the unit and damage to the floor or ceiling within the unit, is the owners corporation responsible to repair or reimburse the costs incurred to fix the damage?

To investigate an issue reported by the owner of the unit, a tradesperson sent by strata pulls out some wood from the flooring. Does strata have the responsibility to fix this damage?

Answer: The short answer is yes. The Owners Corporation is responsible to repair the flooding damage and to repair the reinstatement works required.

So it’s no different to my car hitting your car. I would be responsible for the damage to your car. That’s how I always put it, very simple.

If the common property has caused damage to lot property, the Owners Corporation who is responsible for the common property is equally responsible to repair any damage caused to lot property. Same as if the Owners Corporation sent a contractor to carry out explanatory investigative works to repair common property, it would be the responsibility of the Owners Corporation to reinstate that common property as well as reinstate the lot property that it has interfered with to conduct those explanatory works.

So yes, the short answer is yes. The Owners Corporation is responsible to repair the flooding damage and to repair the reinstatement works required.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #505.

Question: The roof on our older building needs the waterproofing checked but the committee is unable to reach a decision. We are awaiting mediation, but what else can we do?

The roof of our building is a cement slab that is 40 years old. The waterproof membrane has never received any maintenance. We live on the ocean and receive a significant amount of saltwater damage and have had to fix concrete cancer on balconies and repair rust spots. There are 5 people on the committee of 9 who don’t believe there is anything wrong with the current state of the rooftop and we are currently in the process of awaiting mediation. 

In the meantime the chairperson has put forward a motion to go to the next committee meeting regarding access to the roof as follows: MOTION: That the persons authorised to have unqualified access to the roof are the Chairperson, The Secretary, and any person so authorised by five members of the Executive Committee, for the sole purpose of discharging their duties as Chairperson or Secretary. Unqualified access means access to that person alone unless any other persons have previously been authorised by five members of the Strata Committee. 

Answer: Any issue concerning the strata committee and validity of decision making should be brought to the strata manager’s attention at first instance.

This is potentially the responsibility of the Owners Corporation in accordance with section 106 of the Strata Schemes Management Act 2015. On the information provided it is unclear whether there is a strata manager appointed. I suggest that any issue concerning the strata committee and validity of decision making should be brought to their attention at first instance. 

The motion appears challengeable. A chairperson at a meeting may rule a motion out of order if the chairperson considers that the motion, if carried, would conflict with the Strata Schemes Management Act 2015 or the by-laws of the strata or would otherwise be unlawful or unenforceable.  

There are duties a strata committee is required to comply with. Section 37 provides that each member of the strata committee of an owners corporation is to carry out his or her functions for the benefit so far as practicable of the owners corporation and with due care and diligence. 

If the owners corporation are not discharging their duties in accordance with the above and Act an application can be submitted under the Act for a compulsory manager to be appointed. 

On application to the NSW Civil and Administrative Tribunal the Tribunal may make an order appointing a strata managing agent to exercise all the functions of an owners corporation or specified functions. 

In your set of circumstances if you feel the strata committee is not exercising their functions of the owners corporation as set out above and are concerned, you can consider bringing an application for a compulsory strata manager.

Pierrette Khoury Khoury Lawyers E: pierrette@khourylawyers.com.au P: 0415 459 486

This post appears in the August 2021 edition of The NSW Strata Magazine.

Question: Sewer water from the unit above has leaked and caused damages to the unit below. Pipes are concealed in the wall and not visible. Can we ask the owners corporation to facilitate professional inspection to determine the exact damages to pipes and get them repaired appropriately to prevent leaks in the future?

Sewer water from the unit above has leaked and caused damages to the unit below. Pipes are concealed in the wall and not visible.

Can we ask the owners corporation to facilitate professional inspection to determine the exact damages to pipes and get them repaired appropriately to prevent leaks in the future?

Previous seepage of sewer water has caused damages including loss of rents due to Tenant moving out due to this problem. Who compensates for the past and ongoing damages ( loss of rent, amending repair etc)?

Answer: The first point of consideration would be a claim for water damage and loss of rent under the strata insurance.

Leanne Habib, Premium Strata

Yes, this would be the prudent course, as in the process of that inspection it could be definitively determined what the source and cause of the damage was. If the damage is caused by a defect in or malfunction of the common property an owner may recover damages from the Owners Corporation as per subsection (5) below:

Division 1 – Common property

106 Duty of owners corporation to maintain and repair property

1. An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation.


2. An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation.


3. This section does not apply to a particular item of property if the owners corporation determines by special resolution that:
   1. it is inappropriate to maintain, renew, replace or repair the property, and
   
   
   2. its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.


4. If an owners corporation has taken action against an owner or other person in respect of damage to the common property, it may defer compliance with subsection (1) or (2) in relation to the damage to the property until the completion of the action if the failure to comply will not affect the safety of any building, structure or common property in the strata scheme.


5. An owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation.


6. An owner may not bring an action under this section for breach of a statutory duty more than 2 years after the owner first becomes aware of the loss.


7. This section is subject to the provisions of any common property memorandum adopted by the by-laws for the strata scheme under this Division, any common property rights by-law or any by-law made under section 108.


8. This section does not affect any duty or right of the owners corporation under any other law.

Tyrone Shandiman, Strata Insurance Solutions

In relation to the second question, the first point of consideration would be a claim for water damage and loss of rent under the strata insurance.

Generally speaking (subject to the terms conditions and exclusions of the policy), the policy will cover “water damage” resulting from the leak but will exclude costs associated with finding and fixing the leak if the cause of damage relates to an exclusion such as lack of maintenance, rust, oxidation, wear & tear, corrosion, gradual deterioration, developing flaws, building defects etc. Long term water damage or rot may be something that the insurer does not cover depending on the circumstances as strata policies are designed to cover sudden and accidental damage.

In relation to Loss of Rent, a claim can be considered where the damage makes the property uninhabitable or unfit to be occupied for its intended purpose. You will need to discuss the process for claiming loss of rent with the insurer.

For losses that are not covered by an insurance claim, the owners corporation can only consider compensation where you can demonstrate they were legally liable for the damages and financial loss. Things that you may consider is first whether the owners corporation are responsible to maintain the damaged pipe and if so, whether they were negligent in their maintenance of pipes for example knowledge of leaks and failure to take reasonable actions to fix the leaking pipes etc.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 07 3899 5129

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in the March 2021 edition of The NSW Strata Magazine.

Question: How long must a lot owner wait for a reimbursement for waterproofing the bathroom? What can I do to obtain a resolution?

How long must an owner wait for an entitled and agreed reimbursement for waterproofing the bathroom? What can I do to obtain a resolution?

All invoices were submitted 14 months ago and finally acknowledged. Reimbursement was promised at the AGM 4 months ago, but all to no avail.

Answer: You may consider escalating the matter to the Tribunal.

If the work relates to common property, the Owners Corporation is required to comply with section 106 of the Strata Schemes Management Act 2015.

This section provides that the Owners Corporation must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the Owners Corporation.

You will need to show that the works were necessary to be carried out.

I would suggest you call a meeting at the Annual General Meeting, or at the strata committee meeting (if you are on the strata committee) and/or raise the issue with the strata manager at the first instance. Should this not happen and you can show the works were necessary to be carried out you may then consider escalating the matter to the Tribunal.

Pierrette Khoury Khoury Lawyers E: pierrette@khourylawyers.com.au P: 0415 459 486

This post appears in the March 2021 edition of The NSW Strata Magazine.

Question: We have received strata approval to lay new laminate on the floor of our apartment. The original concrete floor is not level and needs levelling at a cost of $2000. Would this be strata responsibility?

Answer: If the sloping floor is considered to be a building defect, rectification of that defect (if any) would be the responsibility of the owners corporation.

Sometimes, though we understand there are certain tolerances under the Building Code of Australia, a uneven slab may constitute a building defect in certain circumstances – this link explains acceptable deviations and tolerations: New South Wales: Guide to Standards & Tolerances 2017

If the sloping floor is considered to be a building defect since the concrete slab is almost always common property, rectification of that defect (if any) would be the responsibility of the owners corporation.

However, this could be construed as “upgrading” the common property and therefore your responsibility and not the owners corporations. The Owners Corporation may argue that the defect is only a defect because you have elected to change the type of flooring within your lot and that the levelling works are merely preparation works to allow for the timber flooring wherein the original carpet on the existing levelling may be fit for its purpose but not for timber flooring.

You should obtain expert advice on this specialist area.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in the February 2021 edition of The NSW Strata Magazine.

Question: There is no insulation under the concrete roof of my top floor apartment. On hot days, the apartment is basically unliveable. Is the Owners Corporation responsible for this problem?

When the summer sun heats the concrete roof of my top floor apartment all day, that evening the concrete sheds its heat into the apartment! On some over 35 degree days, my apartment is still over 30 degrees in the early morning!

My air-conditioning unit in the lounge room does little and fans in the bedrooms merely distribute the heat radiating from the ceiling.

At the AGM, I requested a special motion for the owners corporation to apply heatproof paint. I provided documentation, a quote and research, but as tenants occupy a majority of rooftop apartments, I was unable to gather sufficient numbers at the meeting, and the motion was denied.

The summer temperatures in my top floor apartment are unbearable and several other top floor apartment owners agree. We feel this is due to a complete lack of insulation installed when the concrete roof of the block was repaired. Is there any responsibility on the owners corporation to rectify this fault in the concrete roof affecting all top floor apartments? The temperatures are so bad, the apartment is basically unliveable.

Answer: You will need a building consultant’s expert opinion.

While insulation and waterproofing of rooftops is common in the thermal management of buildings, whether or not it is a requirement of the Building Code of Australia for your particular building is a matter you will need a building consultant’s expert opinion on.

If indeed, it is a requirement and you can prove that the absence of insulation (or inadequacy of insulation) is a defect in the common property, then the Owners Corporation has a positive duty to rectify that defect.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #348.

Question: I had a split water pipe in the cavity wall between my bathroom and laundry. I contacted the strata and they said it was not their responsibility. So who can I claim the works cost back from?

I had a split water pipe in the cavity wall between my bathroom and laundry. The repair involved opening the wall in the laundry, fixing the pipe and then a handyman repaired the wall. I had this happen quite a number of years earlier and it was covered by the strata.

I contacted the strata and they said it was not their responsibility. If the wall had been an external wall it would have been covered but as the water supply was only to my unit it was my responsibility. I then called my broker to use my landlord policy and they also said it was not their responsibility. From who can I claim the cost of the works of around $1000?

Answer: It will depend on the location and time of registration of the strata plan, as this may determine the waterproofing affixed to the common property walls.

It will depend on the location and time of registration of the strata plan, as this may determine the waterproofing affixed to the common property walls.

Also if the common property memorandum applies it will determine if this is a common property item.

However, if the pipe only serves your lot and is not within the common property wall it is the responsibility of the lot owner. If it is an internal wall it is the lot owner’s responsibility.

If the pipe serves several units, it is likely to be the Owners Corporation’s responsibility. If this is the case, this should be brought to the attention of the Owners Corporation. The Owners Corporation should then address reimbursement and also contact the insurer.

Either way you will need to determine whether the pipe serves your lot solely or several lots.

Pierrette Khoury Khoury Lawyers E: pierrette@khourylawyers.com.au P: 0415 459 486

This post appears in the December 2020 edition of The NSW Strata Magazine.

Question: A resident reported a blocked drain to me. I’m a committee member. I relayed this to the other 4 committee members with no reply. The repair has been completed and 3 of the 5 committee members are refusing the invoice stating the correct procedure was not followed.

A resident reported a blocked drain to me. I’m a committee member. He was prevented from showering. I relayed this to the other 4 committee members with no reply.

Consequently, after 24 hours the owner called the building’s plumber, the repair was carried out for a reasonable amount and he submitted the bill to the strata manager for payment. 3 of the 5 committee members are refusing the invoice stating the correct procedure was not followed.

I would have thought by not answering the situation would have been considered an emergency. The three other members also have a vehement grudge against this unit.

I feel these committee members – Chairman, Secretary and Treasurer are not acting appropriately.

The strata manager makes no comment. Should this small bill be paid?

Answer: The answer, in our view, depends on the cause of the blockage.

The answer, in our view, depends on the cause of the blockage.

If it is normal wear and tear and the drain cannot cope with the daily function of showering, this is likely a defect in the common property and so should be paid for by the Owners Corporation.

If it is malicious, then that should be the responsibility of the individual lot.

We consider that a blocked drain is an emergency, not because he could not shower, but because of the possibility of the pipes bursting or causing a flood in the building.

In sum, it is likely that the responsibility for the plumbing bill is the Owners Corporation’s despite the owner not following the proper process because of the emergency nature of the repair.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in the December 2020 edition of The NSW Strata Magazine.

Question: Water has entered the external wall of our building and has damaged a section of the floating floor of a lot owners apartment. Is the repair the responsibility to be compensated by the buildings insurance?

Water has entered the external wall of our building due to weep holes being blocked preventing it to escape and has damaged a section of the floating floor of a lot owners apartment.

The water issue has since been resolved but the lot owner has now made a claim for damages compensation to repair/replace the floating floor, gyprock, skirting and painting to the affected area. The floating floor however had not been approved by the body corporate before the lot owner had it installed.

As this floor covering is not part of the original build and was not approved before installation is it the responsibility to be compensated by the buildings insurance even though it was damaged by a fault in common property.

Answer: Does the policy provide cover for floating floors?

There are a few issues to consider here. Firstly, does the policy provide cover for floating floors?

New South Wales legislation provides that the owners corporation are not required to insure temporary flooring (i.e floating floors). If there is no cover, the owner does not have a valid claim under the Property section of the policy.

Some strata policies automatically include cover or have the optional benefit to insure floating floors. Cover for floating floor boards can be convenient for owners as it may mean they do not need to lodge a claim with their contents insurer and strata insurer for one event and thus not pay two excesses. It can however have an unintended consequence that if there is a claim whereby floating floors are the only items damaged and the owner has contents insurance, as some contents insurers will only provide cover for items excluded by strata, it can also mean that a claim must be made on strata insurance even if there is a desire (by the owners corporation or lot owner) that a claim is made under contents.

Where the floating floors are covered by the policy, the owner having contributed towards the insurance policy and having an insurable interest, may have the ability to claim for the damaged flooring under the strata insurance.

If the floating floors are covered by the policy, I am not aware of any provisions in insurance policies which afford the insurer the opportunity to exclude cover where the owners corporation did not approve the installation of flooring. The approval process for installing flooring and claiming for the flooring on an insurance policy are two separate and distinct issues.

Lastly, where the floating floors are not covered by the Property section of the policy, and the owner is claiming compensation due to “negligence” the Public Liability section of the policy can provide cover in instances where the owner can demonstrate that the owners corporation were legally liable for the damaged flooring (i.e. negligence) subject to the insurers terms, conditions and exclusions.

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 07 3899 5129

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in Strata News #397.

Question: A builder has confirmed I have water between my tiles and the waterproofing layer in my bathroom. I have contacted strata. What do I do now?

I had noticed something wrong with the grout in my bathroom and my metal door frames are starting to get corrosion on them. I organised for a builder to check the problem and he stated I have water between the tiles and the waterproofing layer.

The builder is supplying me with a letter for our owners corporation. I have let our strata know of the problem but was wondering what is the next step should be? The building is not quite 2 years old.

Answer: You should keep reminding the strata manager of the need to investigate your water issue and keep records of same.

It is critical that the source of the water ingress be determined. You should liaise with the strata manager to obtain an expert report in relation thereto.

While you must not allow the leak to go unchecked, you should exercise caution before carrying out any works yourself so as not to potentially void or compromise the owners corporation’s insurances (eg in case the leak is a common property defect covered by relevant home building warranties).

You should keep reminding the strata manager of the need to investigate your water issue and keep records of same.

You have done the right thing to notify the strata manager who should now liaise with the strata committee for a determination as to the cause and attributing responsibility for the costs of rectification.

Should there be an undue delay in investigating your water issue, then you should consider escalating the matter.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in the September 2020 edition of The NSW Strata Magazine.

Question: I’m renovating my unit’s flooring. The flooring has magnesite and needs to be repaired by the Owners Corporations first. Should they draft the bylaw for the renovation?

I am renovating my entire Unit’s Flooring. The Strata Committee is requesting that prior to doing any flooring renovations, the magnesite needs to be completely removed and any concrete spalling repairs need to be carried out.

As the Strata Committee needs to repair the flooring, is it the Owners Corporation’s responsibility to draft a new By-Law for my bathrooms?

Answer: The OC is carrying out its statutory duty to repair & maintain the common property and therefore, does not require a by-law.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #397.

Question: Fire updates within our complex Led to the installation of a box cover over my bathroom vent which caused massive problems with mould in the bathroom. How can I get this fixed?

I finished renovating my unit last year. Not long after we had fire updates done throughout the complex. This led to the installation of a box cover over my bathroom vent.

This has caused massive problems with mould as there is no ventilation in the bathroom except the window. I complained to my owners corporation and they said they would address the issue later but the job had to be completed first.

Strata and the owners corporation are now telling me that it is my problem and not their responsibility to fix this issue. I have asked them for the reasoning or legislation behind this statement but they have not responded. How can this be my issue to repair?

The apartment is let and my tenants are opting to move out because of the mould problem. My managing agents have informed me the ventilation problem must be rectified before we even consider reletting.

Answer: The Owners Corporation should rectify the reduced ventilation in your bathroom.

While the Owners Corporation may have had a duty to implement a fire upgrade, in doing so, it appears they may have caused a defect in the common property i.e. through the obstruction of your vent. In our view, the Owners Corporation should rectify the reduced ventilation in your bathroom, whether by way of the installation of an exhaust fan or otherwise – noting that the Owners Corporation may be held liable for compensation in case of breach of their statutory duties to properly repair and maintain the common property.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #382.

Question: We discovered a leak in the ceiling of our newly renovated bathroom. Strata will fix but will cover the repair hole with a vent. We’d like it returned to the condition it was in prior to the leak.

I recently noticed a drip through a light fitting in my main bathroom. We completely renovated the apartment earlier this year, including this bathroom.

The strata manager has agreed to fix the defect but the plumber will cover the hole he needs to cut with an air vent.

We’ve just spent over 6 figures completely renovating our apartment. I feel Strata should, after repairing the pipes, return the ceiling to the condition it was in prior to the leak. Is this unreasonable and what can we do?

Answer: If the leak is due to a defect in the common property, the owners corporation should re-instate all affected lot and common property.

Pursuant to Section 122 Power of owners corporation to enter property in order to carry out work of the Strata Schemes Management Act, 2015 (NSW):

6. an owners corporation is liable for any damage to a lot or any of its contents caused by or arising out of the carrying out of any work, or the exercise of a power of entry, referred to in this section unless the damage arose because the owners corporation was obstructed or hindered.

So, if the leak is due to a defect in the common property, the owners corporation should re-instate all affected lot and common property.

You should raise this position with your strata manager, and, if the owners corporation still refuses to re-instate your ceiling/paint/lights, you may apply for Mediation to attempt to resolve the situation (failing which, commence action in NCAT).

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #356.

Question: A lot owner put down a hard floor under a special bylaw to transfer the obligation of maintenance of the surrounding common property to the lot owner. We now need to dig up the floor for a pipe repair and they are not being cooperative.

We have a situation in our building, which is a complex of 40 units in Sydney, New South Wales. A lot owner put down a hard floor in 2012. We asked the lot owner for a special bylaw to transfer the obligation of maintenance of the common property on which the floor was laid to the lot owner. This was approved at an extraordinary general meeting and recorded in the minutes.

We now find that we need to take up some of the hard floor in order to access pipes that were embedded in the concrete at the time of construction.

The owner has shown us the Strata Scheme Management Act for that time which says that in order for a bylaw to be binding it needs to be signed by the owner and he did not sign anything because we didn’t know to ask him to sign.

52 How does an owners corporation make, amend or repeal by-laws conferring certain rights or privileges?

1. An owners corporation may make, amend or repeal a by-law to which this Division applies, but only:
   1. with the written consent of the owner or owners of the lot or lots concerned

Our strata manager says that there is also a clause in the legislation that says that after two years it is deemed that everything was correctly done with respect to the bylaw and therefore the by-law is binding.

After 2 years from the making, or purported making, of a by-law to which this Division applies, it is conclusively presumed that all conditions and preliminary steps precedent to the making of the bylaw were complied with and performed.

Answer: Look to section 148 – Order revoking amendment of by-law or reviving repealed by-law

It is arguable that section 52 applies which provided at that point in time:

4. After 2 years from the making, or purported making, of a by-law to which this Division applies, it is conclusively presumed that all conditions and preliminary steps precedent to the making of the by-law were complied with and performed.

I am presuming the special by-law was prepared, however not signed and registered.

Having regard to the Strata Schemes Management Act 2015 there are provisions which are relevant. An application may be made to the Tribunal regarding the special by-law which is set out in section 148. The Truibunal is to consider the interests of all owners of the lots in the strata scheme.

Order revoking amendment of by-law or reviving repealed by-law

1. The Tribunal may, on application by a person entitled to vote on the amendment or repeal of a by-law or addition of a new by-law or the lessor of a leasehold strata scheme, make one of the following orders–
   
   1. an order that the amendment be revoked,
   
   
   2. an order that the repealed by-law be revived,
   
   
   3. an order that the additional by-law be repealed.
   
   
2. The Tribunal may make an order only if the Tribunal considers that having regard to the interest of all owners of lots in a strata scheme in the use and enjoyment of their lots or the common property, the change to the by-laws should not have been made by the owners corporation.


3. An order under this section, when recorded under section 246, has effect as if its terms were a by-law (but subject to any relevant order made by a superior court).


4. When making an order under this section in relation to a common property rights by-law, the Tribunal may direct the payment by the owners corporation of compensation to the owner of the lot, or owners of the lots, referred to in the by-law.Note: Section 78 of the Civil and Administrative Tribunal Act 2013 provides for the recovery as a judgment debt of amounts ordered to be paid by the Tribunal.


5. An order under this section operates on and from the date on which it is so recorded or from an earlier date specified in the order.

A further power is contained in section 149 of the Act: Order with respect to Common property rights by-law. Subsection (b) is of relevance where an owner of a lot has unreasonably refused to consent to the terms of the proposed amendment or repeal of a common property rights by-law.

1. The Tribunal may make an order prescribing a change to a by-law if the Tribunal finds–
   
   1. on application made by an owner of a lot in a strata scheme, that the owners corporation has unreasonably refused to make a common property rights by-law, or
   
   
   2. on application made by an owner or owners corporation, that an owner of a lot, or the lessor of a leasehold strata scheme, has unreasonably refused to consent to the terms of a proposed common property rights by-law, or to the proposed amendment or repeal of a common property rights by-law, or
   
   
   3. on application made by any interested person, that the conditions of a common property rights by-law relating to the maintenance or upkeep of any common property are unjust.
   
   
2. In considering whether to make an order, the Tribunal must have regard to–
   
   1. the interests of all owners in the use and enjoyment of their lots and common property, and
   
   
   2. the rights and reasonable expectations of any owner deriving or anticipating a benefit under a common property rights by-law.
   
   
3. The Tribunal must not determine an application by an owner on the ground that the owners corporation has unreasonably refused to make a common property rights by-law by an order prescribing the making of a by-law in terms to which the applicant or, in the case of a leasehold strata scheme, the lessor of the scheme is not prepared to consent.


4. The Tribunal may determine that an owner has unreasonably refused consent even though the owner already has the exclusive use or privileges that are the subject of the proposed by-law.


5. An order under this section, when recorded under section 246, has effect as if its terms were a by-law (but subject to any relevant order made by a superior court).


6. An order under this section operates on and from the date on which it is so recorded or from an earlier date specified in the order.

Pierrette Khoury Khoury Lawyers E: pierrette@khourylawyers.com.au P: 0415 459 486

This post appears in Strata News #329.

Question: While carrying out kitchen renovations, engineering work was required to repair concrete cancer in the floor. Can I be reimbursed the substantial costs for repairs to common property defects?

I recently carried out renovations to my unit.

During the process I noticed that the concrete slab area in the kitchen had crummy patches and loose concrete.

I contacted a structural engineer to look at the slab. The engineer removed further concrete to find the whole area was crummy and the reinforcement was significantly rusted to the point where steel came out with loose concrete.

The engineer specified what should be done to repair the slab. I engaged a specialist contractor and he carried out the works. There was no lump sum cost as he was not able to determine the full extent of work. The work eventually cost $27000.

Can these costs be given to the owners Corp for reimbursement as repairs to common property defects? Is there a time frame for claiming the reimbursement? I have only been made aware the owners Corp paid for this work in another unit at $60,000.

Answer: An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation.

The usual process is that the owner notifies the strata managing agent of any issues concerning the property as soon as they become aware. This should be in writing.

Section 106 of the Strata Schemes Management Act 2015 provides a statutory duty that the Owners Corporation is to comply with.

It provides that:

1. An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation.


2. An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation.

The section does not apply if the owners corporation has determined by special resolution at a meeting that: it is inappropriate to maintain, renew, replace or repair the property, and its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.

Relevantly to your situation section 106(5) provides:

5. An owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation.


6. An owner may not bring an action under this section for breach of a statutory duty more than 2 years after the owner first becomes aware of the loss.

At first instance, I would notify the strata managing agent of the works undertaken with the evidence of the same attached and seek reimbursement. You will need to ensure that the works carried out affected the common property. You will also need to show it was a reasonable foreseeable loss you suffered and that is why you took steps to carry out the work and mitigate your loss.

In the event, you do not receive a response I would refer the strata managing agent to section 106 outlined above whereby the Owners Corporation have a statutory duty to properly maintain and keep in a state of good and serviceable repair the common property and any personal property.

Pierrette Khoury Khoury Lawyers E: pierrette@khourylawyers.com.au P: 0415 459 486

This post appears in Strata News #314.

Question: Water damage was caused to a lot owner’s floating floor boards from a common property defect. Aren’t internal floor coverings the responsibility of the lot owner?

We recently had an owner put in a claim for the owners corporation to pay for damage to their floating wooden floor within their living area. The damage was due to water leakage.

After consulting with our Strata agent they advised that this is now a ‘grey area’ in NSW and that the owners corporation may be liable.

This is news to me as I thought it was clear cut. I thought the internal floor coverings; carpet, floating and fixed wooden floors that were installed by past or present owners are the responsibility of the present owner and should be covered by their own household insurance.

Answer: It is important to understand the difference between “responsibility to insure” and “responsibility for damage”.

I think it is important to understand the difference between “responsibility to insure” and “responsibility for damage”. It is my view this may be the cause of the misunderstanding.

“Responsibility to Insure” is covered by Section 161 (4) Strata Schemes Management Act 2015 and outlines that temporary floor coverings are not required to be insured under a strata policy. Subsequently, strata insurers will exclude cover for floating floors.

Insurers have however started providing an optional benefit to cover floating floors. This muddies the waters somewhat as contents/landlords insurance which has traditionally been the policy to insure floating floors now covers fixtures that are not insured by the strata policy. In the event of a claim for damage to floating floors, if an owner tries to make a claim on their contents/landlords insurance policy, the contents insurer may require confirmation that the strata insurer is declining to provide cover. If the strata insurance policy has the optional benefit covering floating floors selected and you contact the insurer for a decline letter. The insurer technically can not decline a claim for something they cover. For this reason, we caution owners corporation clients about taking the floating floors optional benefit because it can have the unintended consequence of forcing an owner to claim on strata even if their preference is to claim on their contents/landlords insurance.

“Responsibility for damage” or a negligence claims against the owners corporation are different from any property damage claim. Strata policies have public liability insurance which is designed to provide cover for claims for property damage they become legally liable for. If the leak was from the owners corporation property (such as a leaking pipe the owners corporation are responsible for) and the owner can demonstrate negligence on the part of the owners corporation or a legal responsibility for the damage, then a public liability claim can be considered by the insurer. The insurer will either defend the claim if they feel there are reasonable grounds to do so or they will settle the demands.

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 07 3899 5129

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in Strata News #306.

Question: Our hardwood floors have suffered major water damage due to common property defects. Should the Body corporate reimburse out of pocket expenses for accommodation and food while we vacate the property for repairs?

We have had major water damage occur to a hardwood floor laid on battens on a slab as part of the original build in a 10 year old NSW town house complex.

The hardwood floors are recognized as Body Corporate responsibility as the damage is due to common property defects.

For reasons too convoluted to go into, insurance is refusing to pay out.

Body corporate are willing to pay for the repair, though I will need to vacate my property for at least a week while the floor is replaced.

Does Body corporate have an obligation to reimburse me for out of pocket expenses to house and feed my family for a week while we vacate the property for repairs?

Answer: The accommodation should be recoverable, but it is unlikely that the costs of food etc would be reimbursed.

If the water ingress can be construed as a failure on the part of the owners corporation to properly repair and maintain the common property, then under Section 106(5) of the Strata Schemes Management Act 2015 (NSW):

5. An owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation.

If the above clause is applicable, in our view, the accommodation should be recoverable, but it is unlikely that the costs of feeding etc would be, given that you must feed your family wherever you live ie the requirement to feed your family has not arisen because of any breach of the owners corporation. Bearing in mind too, that you must mitigate your losses, so rather than stay at eg a 5-star hotel and eat room service every night, we recommend you find a serviced apartment of similar quality in the vicinity of your existing apartment.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #300.

Question: Our bathroom’s waterproofing membrane has failed and is causing damage to the lot below. Should the Owners Corporation be responsible for all repairs, as these are only needed due to common property defects?

Our bathroom is the original bathroom and the waterproofing membrane has failed and is causing damage to the lot below.

The Owners Corporation’s contractor has advised that to comply with the current building codes, the entire bathroom needs to be stripped out, the waterproofing membrane replaced and the bathroom tiles and fixtures renewed.

As the bathroom and waterproof membrane are original and there is nothing wrong with the tiles or fixtures, shouldn’t the Owners Corporation be responsible for the cost to replace these? The repairs are only needed due to the common property defects and so the Owners Corporation can maintain the common property membrane. Is this correct?

The current bathroom is tiled in marble and we have even advised we will accept a standard white tile instead of requiring the like for like marble tiles, as this will keep the cost lower.

What bylaw or part of the legislation would we be able to quote in regards to this? Who is responsible? The property is about 30-40 years old.

Answer: There is a very similar 1999 strata titles case.

There is a 1999 case where water had leaked into two lots below another lot so the owners corporation removed two rows of tiles to effect membrane repairs. The owners corporation was insistent that its obligations extended only to replacement of the 2 rows of titles it had removed. The Owner, however, wanted his entire balcony retiled.

An Adjudicator ordered that the owners corporation had to retile with tiles that matched as closely as possible in appearance and value so as not to detract from the appearance of the balcony floor or negatively impact on the value of the lot. Further, if reasonably matching tiles were not available and those non-matching tiles might detract from the appearance of the lot, the owners corporation was to retile the whole balcony.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #266.

Question: Due to a common property defect, my tiles were damaged in an area on my verandah. As the tiles could not be matched, the whole space must be retiled. Should the OC pay for all work?

My veranda incorporates a steel post that structurally supports the roof above. The post was defective in that it had no ‘weep holes’ to allow condensation to flow out. The water resulting inside the post eventually rusted the base of the post and, destabilised the tiles and tile bed.

In fixing this common property defect, the tiles could not be matched therefore the veranda had to be retiled.

The Strata management advised that this was not their responsibility even though the damage was consequential to the defective pipe and only required replacement due to damage caused by the common property defect.

The strata manager said that they may be responsible for the portion of the tiles that were damaged by the pipe but not the whole retiling job. I note again that the tiles could not be matched so there was no alternative other than full replacement.

Can you advise my rights to recover costs?

Answer: There is a strata titles case very similar to yours.

There is a strata titles case concerning a common property defect (Denning v The Owners – Strata Plan No. 11318 [1999] SA/99/038) which states that the duty of the Owners Corporation to repair tiles on a balcony, in a context similar to yours, was, either to match new tiles as closely as possible in appearance and value to the existing tiles so as not to detract from the appearance or value of the lot OR in case very similar tiles were not able to be sourced, then the owners corporation would have to retile the whole balcony floor.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #220.

Question: The floor in a lot’s kitchen has to be repaired because of concrete cancer. The lot owner now wants the owners corporation to pay for a new kitchen.

Who is responsible for a kitchen in a unit? The floor in a lot’s kitchen has to be repaired due to common property defects, specifically because of concrete cancer. The lot owner now wants the owners corporation to pay for a new kitchen. The original kitchen was 30 years old! Where do we stand?

Answer: The Owners Corporation would need to address concrete cancer and then reinstate the kitchen with like for like.

It sounds like the kitchen is original. Subject to any by-laws applicable to the scheme and any notations on the strata plan, the general position is that the floor tiles, any membrane and the structure of the concrete slab are all common property, and, therefore, the responsibility of the Owners Corporation.

The Owners Corporation would need to address concrete cancer and then reinstate the kitchen with like for like. Any upgrade or superior finishes would be at the cost of the individual lot owner.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

Question: One lot owner has put in a claim for over $6000 from the owner’s corporation for bathroom renovations.

What are the responsibilities of Strata Committee members in relation to maintenance work? One lot owner has put in a claim for over $6000 from the owner’s corporation for bathroom renovations. Is this allowed? Who has the right to view the bathroom in question? All lot owners, or just the Strata Committee members?

Answer: If the owner alleges the renovations were required due to common property defects, then such defects should have been notified to the owners corporation.

Bathroom renovations require a by-law under the legislation – which the owner appears not to have obtained. If the owner alleges the renovations were required due to common property defects, then such defects should have been notified to the owners corporation.

The owners corporation should not be liable to foot the bill unless there is compelling evidence of a defect in the common property necessitating a full bathroom renovation. This does not seem to be the case. You should seek legal advice on this one. Before you can access the lot, you will need the relevant owner’s consent.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

Question: A lot owner wants reimbursement for repairs required due to common property defects, although they did not follow the correct process. Should the Owners Corporation appease this lot owner?

We had a motion passed after a discussion held at our last years AGM.

See below:-

MOTION

If an owner authorises work on common property and bypasses the Strata Committee and Strata Manager then the Owners Corporation will not reimburse the owner for such works. All requests for maintenance must be channelled through the Strata Committee and the Strata Manager who will then issue a work order to a certified contractor.

The motion will then either be CARRIED/AMENDED or LOST

This was carried by the Owners Corporation.

Since this was passed at the last AGM, we had an owner get work done on her lot. The work was necessary due to a common property defect and was carried out by their own contractor. They are now demanding a reimbursement for the cost of the work.

Just prior to this claim, another owner wanted the same issue caused by the common property defect repaired. They requested the issue to be repaired through the strata manager and after confirming it was strata responsibility, the job was done at strata’s costs. This owner followed the correct process, as per the motion.

The owner who has not followed the process and has had the work done outside of this motion is causing all kind of demands because the compliant lot owner was compensated by strata.

We passed this motion because we have previously had owners being reimbursed at a later date for works that have not been channelled through the strata manager and strata committee.

Should the strata committee go against a motion passed at an AGM by the Owners Corporation to appease this owner?

Answer: We would not entertain reimbursement until such time as the owner demonstrated actual costs, the qualifications of the workers, the necessity for the works, the insurances/warranties obtained.

This is a difficult question because the motion passed implies that an owner has authority to issue work orders for work on the common property (which they do not) but if they do so, they will not be reimbursed. While we understand this was intended to dissuade lot owners from by-passing the proper channels for common property repairs, Section 111 clearly states that owners must not carry out work on the common property without the proper approvals. Further, Section 126 gives the Tribunal powers to order an Owners Corporation to consent to common property repair works carried out by an owner and which directly affects the owner’s lot.

The concern for the Owners Corporation is that where a lot owner carries out the work, the Owners Corporation does not obtain the benefit of any warranties for works carried out. Also, it is not aware of the qualifications of the contractor carrying out works on the common property and there is a possibility that the insurances of the Owners Corporation may have been compromised.

All that said, we cannot give you legal advice. However, we are of the view that the by-law is confusing and could be better drafted.

In terms of the current issue at hand with the lot owner demanding reimbursement, again while we cannot give you legal advice, we would not entertain reimbursement until such time as the owner demonstrated:

• actual costs


• the qualifications of the workers


• the necessity for the works


• the insurances/warranties obtained.

Ultimately, and because of the strict liability of the Owners Corporation to properly repair and maintain the common property, the owner could make application to NSW Civil & Administrative Tribunal and recover from the Owners Corporation damages for the Owners Corporation’s breach of statutory duty Section 106 (5).

Question: Who is Responsible for Sanding Polishing Floorboards?

I wonder if you can clarify a strata question that is very grey with regards to my floorboards.

Our building in Sydney NSW was completed on the year 2000. Each townhouse has a section of floorboards in the lounge room.

Our Strata manager says the floorboards are not common property and are the owners responsibility.

This contradicts the following – last year we had some rectification works due to common property defects relating to waterproofing and some of the townhouses did have some water damage to their floorboards and the strata paid for the repairs to the floorboards.

When I asked the strata manager about sanding polishing floorboards, they said NO as these are the owner’s responsibility. When I asked the Executive Committee, the chairperson said that because the other units had damage caused by the reification works of the common property defects, the owners corporation had to pay for them.

I find this inequitable and am really confused. What do I do?

Answer: You need to confirm whether your flooring is common property or lot property

It is not uncommon for the Owners Corporation to repair lot property resulting from damage caused by common property defects. Therefore, whilst the flooring may not be common property, the Owners Corporation would still be responsible to repair flooring where their property has caused the damage.

However, to determine if your flooring is common property or lot property, and which party is responsible for general repair and maintenance of the flooring, the following should be confirmed:

1. Type of timber flooring , hard flooring or floating floors


2. How the timber flooring is installed, is the flooring attached to the common property in any way, i.e. screwed, glued to the floor slab.


3. Is the timber flooring part of the original building, i.e. installed at the time of construction and not replaced or altered by an individual owner(s) since construction


4. Are there any special bylaws that transfer the responsibility of maintaining the flooring to either party, the individual Owners or the Owners Corporation

In summary, if the flooring was installed at the time of construction, has not been altered since by an individual owner(s) and is affixed to the common property floor slab within your lot, and there is no special by law in place to determine who is responsible, the flooring will be deemed to be common property and the Owners Corporation would be responsible to repair and maintain. Please note there is an argument excluding the polish/lacquer, which is lot owner responsibility as it is our view that the polish sits within your lot space. It is the upper surface of the floor and the starting point of your cubic airspace in as much as you own the painted surface of the common property ceiling in your lot.

Therefore, in practice, while the Owners Corporation is responsible to repair and maintain the floorboards, any cost for application of polish would be payable by you.

In conclusion, further assessment of the need for re-sanding will assist in determining who’s proper responsibility the polish is, as there are alternate arguable views regarding the responsibility to repolish the flooring.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #211.

These articles are 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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