Question: Our owners corporation is up for $200,000 to repair concrete spalling in one unit. Larger units have to pay more. How is this fair? Can we limit our liability?
I am the owner/ occupier and Strata Committee Member of a 4 bedroom unit in a block of 12 units. Within the scheme, there are also some 2 bedroom units.
Last year, a 2 bedroom unit was sold. During renovations by the new owner, concrete cancer was found.
The Strata Manager engaged an engineer. Coring samples were taken and the report showed extensive concrete spalling.
We have been informed that, for this flat alone, the owners corporation must pay for:
- rectification of all the floors throughout this flat
- balcony rectification and retiling
- kitchen cupboards etc and tiling.ie total renovation
- bathroom renovations and new fixtures such as vanity, etc.
We’ve been quoted from $200,000 for the repairs. Lot owners in larger flats are to pay a larger share. Is this fair and equitable?
The lot owners would like to know the legal limits of our financial liability.
Do we need to pay for total kitchen and bathroom renovations (cupboards, fixtures, taps, shower cubicle, vanity etc) of this old flat which was about to be renovated anyway by the new owner?
Do we have a legal right to refuse to pay for these “extras” except the rectification of the concrete cancer in the floor?
Could the owner legally apply for rent loss from us?
The spalling in the kitchen / living room area was caused by long term water ingress due to leaky windows and balcony doors in times of windy storms. The Strata Manager had known for a long time that the windows and balcony doors let in water.
Are we able to claim any of this on strata insurance?
Do we need to get legal advice to set limits to our liability? The matter was not discussed with the Owners Committee. We were just “informed” of the cost.
How do other affected strata blocks handle such a situation?
Answer: All costs and expenses of an owners corporation for the repair of lot and common property caused by a defect in the common property must be paid for by all individual owners in proportion to their unit entitlements.
All costs and expenses of an owners corporation for the repair of lot and common property caused by a defect in the common property must be paid for by all individual owners in proportion to their unit entitlements.
Does the owners corporation have to pay for the bathroom and kitchen?
If these items were damaged due a defect in the common property, then yes, you do need to pay for total kitchen and bathroom renovations, however it is difficult to see how taps could be damaged – in our view they could likely be reused.
The Owners Corporation only has to repair like for like and any superior finishes should be the responsibility of the individual owner. For example, if the kitchen contained vinyl benchtops and the owner wanted, say, replacement with granite, this upgrade would be at the cost of the individual owner.
Lot owners do not have the legal right to refuse to pay for any “extras” if there is evidence that the defect in the common property caused the damage to lot property.
Could the owner legally apply for loss of rent?
An owner of a lot in a strata scheme may recover rent loss from the owners corporation, as damages for breach of statutory duty (ie the defect in the common property), any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation.
The Owners Corporation is under a strict statutory duty to keep all the common property in good and serviceable repair.
Can this damage be claimed on strata insurance?
Some leaky pipes water damage may be covered, however, generally, building defects, wear and tear, general maintenance are generally excluded under the strata building insurance policy. You must review the specific terms of your insurance.
Can the owners corporation limit their liability?
It is always prudent to obtain legal advice, however, the engineer’s report will likely determine what damage has been caused and what the source of that damage was (and therefore, who was liable).
Leanne Habib
Premium Strata
E: info@premiumstrata.com.au
P: 02 9281 6440
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