I work at an apartment complex and the grease trap is located on common property on P2 carpark level. The grease trap is located in a room behind the carwash bay. Is it the responsibility of the owner’s corporation to service and maintain the grease trap?

Answer: Refer back to the SMS and check the schedules

In short, in our experience of similar circumstances – yes.

It sounds like you have entered into a mixed-use strata complex. If so, it’s highly likely that this forms part of the “Shared Facilities” within the Strata Management Statement (“SMS”) and will have a small contribution from all Building Management Committee (“BMC”) members which the Strata Plan and Retail make up. The SMS will have a schedule of all the items/assets the BMC contributes to, including the various “onsite grease traps and tanks”. I would refer back to the SMS and check the schedules. In our experience, with a BMC type of set-up, the contribution from the Strata Plan for that particular asset is minimal. It can range anywhere between (3-10%) with the main contribution coming from the retails lots.

Even without a BMC, the “trade waste plumbing system” forms part of the overall hydraulic design that all lot owners contribute. However, you can still seek advice from a hydraulic consultant if there has been an overuse or abuse of the grease trap. In some instances, it would be worth checking if the grease trap services the car wash bay. Depending on when the complex was built, all carwash bays must have a separate grease arrestor to the grease trap. However, this development could have a particular case that warrants further investigation.

Dino Biordi
LUNA – The Building Management Company
E. [email protected]
P: 1800 00 LUNA (5862)

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

Question: We own a villa in a two lot strata scheme that is in need of repainting. The owners of the other lot do not want to pay for the property to be repainted.

We own a villa in a two lot strata scheme that is in need of repainting. The owners of the other lot do not want to pay to have the property repainted. We have offered to bear the cost of repainting both lots ourselves, but they declined.

I am told by our strata manager that we can paint our lot but cannot change the colour. If we obtained agreement from the other lot owner (if needed) can we change the colour providing it is sympathetic eg from pale pink to pale grey?

Answer: You are within your rights to make an application to NCAT that the Owners Corporation complies with its statutory duties ie re-paint the exterior of the building

An Owners Corporation is responsible for the repair & maintenance of the common property including external painting. You are within your rights to make an application to NCAT that the Owners Corporation complies with its statutory duties ie re-paint the exterior of the building (though you would have to go through the mediation process first).

As you are carrying out “works” to the common property, you would need a by-law (to be passed by special resolution) additionally, because, arguably you would be changing the external appearance of the lot (and the proposed colour would not “be in keeping with the appearance of the building”). So, if the other lot owner agreed by way of approving a by-law, the colour change would be acceptable (subject to any Council approvals/restrictions which may apply to the colour).

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

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

Question: Can the owners corporation park a common property maintenance issue forever, quoting lack of funds?

If common property repairs cost $10k to fix and strata have $20k in the capital works account, can the owners corporation park the common property maintenance issue in the pending list, citing a lack of funds?

Answer: Definitely not.

Definitely not. Section 106 of the Strata Schemes Management ACT states that the Owners Corporation must repair and maintain the common property to ensure that it’s in working order. So if it’s failed, it’s not working, it doesn’t operate and Owners Corporation has an obligation to repair it. Having no funds is not an excuse to make that obligation. It just means that the Owners Corporation needs to take steps to raise those funds. That’s why legislation permits you to raise what they call a special levy that’s above and in addition to your ordinary coordinately quarterly levies, so they will just have to raise a special levy to meet the obligations to repair and maintain the failed common property.

So if they don’t have enough funds, the short answer is they must raise those funds.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

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

Question: Who is responsible for a broken window in a strata unit?

Who is responsible for a broken window in a strata unit? Who should be invoiced – the tenant (occupying at the time the glass broke), the owners, or the Owners Corporation?

I have read the Fair Trading Common Property Memorandum but under 9 Windows for Owners Corporation Responsibilities it does not specify the glass.

Could you please advise what happens if a tenant breaks the window glass? Is it the responsibility of the landlord, tenant or the Owners Corporation?

Answer: Generally, if a tenant breaks the glass either the tenant is liable to replace it (if the tenant caused the breakage) or the Landlord’s insurance should cover it.

Generally, if a tenant breaks the glass either the tenant is liable to replace it (if the tenant caused the breakage) or the Landlord’s insurance should cover it. The residential tenancy lease would govern the exact position.

Although, in saying the above, glass is deemed to be common property if situated on a communal boundary and there are no by-laws to state otherwise. Therefore if there is no evidence to confirm the tenant caused the breakage, the owners corporation is responsible to repair the glass and may be able to claim it on the building insurance under accidental damage if the cause was of such nature.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

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

Question: In our 20 year old building, the original water membrane in many unit’s bathrooms are failing. Our Strata Manager insists it is the responsibility of the owners corporation. Is this correct?

We are a small strata unit block with 19 units. Each unit has two bathrooms. The unit block is 20 years old. We’ve received a number of complaints for water leaks caused by failure of the original bathroom membrane affecting only the individual lot’s Internal bedroom / lounge / wall.

We are of the view that it is the responsibility of the individual lot owner and not the owners corporation as the leak is affecting only the individual lot. However, our Strata Manager insists it is the responsibility of the owners corporation.

Can we get a definitive answer on who is responsible for the repairs?

Answer: This is a matter that the Owners Corporation is likely responsible for.

This is a matter that the Owners Corporation is likely responsible for.

The waterproofing membrane source should be looked into. It may be the case the pipes are within the common property wall which is affecting this unit. This is why it would be a matter for the Owners Corporation to attend to.

According to section 106 of the Strata Schemes Management Act 2015 this relevantly provides:

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.

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.

Once it is determined it is common property, there is an obligation on the Owners Corporation 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.

Pierrette Khoury
Khoury Lawyers
E: [email protected]
P: 0415 459 486

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

Question: Is the owners corporation required to carry out necessary maintenance to common property within a legislated timeframe? In this case, for mould.

I have recently informed the owners corporation of extensive mould and wood rot inside a large window. On the exterior, a substantial portion of the cladding under the window is soft, like wet cardboard.

When it rains the smell of dampness and mould is intense throughout my unit and causes migraines and breathing difficulties.

What is the legal timeframe for the owners corporation to repair or replace the window and cladding etc.

Answer: Failing to exercise a function is defined in section 232 as not acting for a period of two months.

The owners corporation has a strict liability to maintain and repair the common property that starts as soon as it is in a state of disrepair. In terms of timeframes, you may want to consider section 232 of the Strata Schemes Management Act 2015 which has a provision enabling NCAT to make orders where the owners corporation has failed to exercise a function. Failing to exercise a function is defined in that section as not acting for a period of two months.

You may want to start the Fair Trading mediation process as the mediation unit is backlogged at the moment and you may not be allocated a mediation date for 4 to 6 weeks.

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

This post appears in Strata News #485.

Question: We’ve found out the marble tile installed in our apartment was unapproved by the owners corporation and they are asking us to pull it up. Isn’t the tile part of the common property? Shouldn’t the OC replace the flooring at their cost?

We bought an apartment with marble tile flooring glued to magnesite on top of the concrete slab.

We later find out that this marble tile installation many years ago was unapproved by the owners corporation.

In the event that the OC want this hard floor taken up under section 106 of SSMA 2015:

Does the unapproved marble tile constitute being part of common property?

Does the OC have an obligation to replace the flooring at their cost?

Answer: You might want to review the strata plan.

The flooring is common property if it is affixed to common property floors. You might want to review the strata plan.

The general position on the Owners Corporation’s duty is contained in section 106(1) of the Strata Schemes Management Act 2015 (“the Act”) : 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. This is s a duty to ensure the common property is maintained.

The Owners Corporation can resolve this is not appropriate and in its decision not to maintain, review or repair will not affect the safety of the building in accordance with section 106(3) of the Act.

This section does not apply to a particular item of property if the owners corporation determines by special resolution 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.

The decision will need to be supported and meet the conditions above.

Pierrette Khoury
Khoury Lawyers
E: [email protected]
P: 0415 459 486

This post appears in Strata News #484.

Question: I had an issue with mould in my bathroom. As the mould was due to a leak in the common property wall, should strata pay for the repairs?

I noticed some mould in my bathroom. We discovered that the bath was not installed correctly causing a separation of 5-10mm between the bath and the walls along the bath allowing water to enter the gap.

As the mould was due to a leak in the common property wall, should strata pay for the repairs?

Answer: If the bath was replaced/re-installed as part of a subsequent renovation, the owner carrying out those renovations would have assumed responsibility for the renovations pursuant to a by-law.

If the bath was an original installation at the time of the registration of the strata plan (subject to any notations on the strata plan and by-laws applicable to your scheme), the repairs are likely to be common property repairs. However, if the bath was replaced/re-installed as part of a subsequent renovation, the owner carrying out those renovations would have assumed responsibility for the renovations pursuant to a by-law.

Further, you have rights pursuant to Section 126 of the Strata Schemes Management Act, 2015 (NSW)

Orders relating to alterations and repairs to common property and other property

Order requiring owners corporation to carry out work on common property The Tribunal may, on application by a lessor of a leasehold strata scheme or an owner of a lot in a strata scheme, order the owners corporation to consent to work proposed to be carried out by an owner of a lot if the Tribunal considers that the owners corporation has unreasonably refused its consent and the work relates to any of the following:
1. minor renovations or other alterations to common property directly affecting the owner’s lot,
2. carrying out repairs to common property or any other property of the owners corporation directly affecting the owner’s lot.

Order consenting to owner’s work on owners corporation property The Tribunal may, on application by a lessor of a leasehold strata scheme or an owner of a lot in a strata scheme, make an order (a “work approval order”) approving of minor renovations or alterations or repairs already made by an owner to common property or any other property of the owners corporation directly affecting the owner’s lot if the Tribunal considers that the owners corporation unreasonably refused its consent to the minor renovations or alterations or repairs.

A work approval order is taken to be the consent of the owners corporation to the renovations, alterations or repairs and may provide that it has effect from a day specified in the order that occurred before the order was made.

In deciding whether to grant a work approval order or to provide for the order to have effect from a day that occurred before the date of the order, the Tribunal may take into account the conduct of the parties in the proceedings, for example, if an owner did not first seek the consent of the owners corporation before carrying out the renovations, alterations or repairs.

Responsibility for ongoing repair and maintenance of affected property The Tribunal may specify in an order under this section whether the owners corporation or the owner of the lot has the ongoing responsibility for the repair and maintenance of any additional property arising out of a minor renovation or alteration or repair to common property approved under the order.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

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

Question: My garage is in immediate need of repair to the point of causing damage to my car. I have requested maintenance but nothing is done. What can I do?

My basement garage in my strata building has no glass in its windows, just some plasterboard covering where glass should be, and the window is ‘in’ an open drain from the garden above. The frame is also rotting away, and there is concrete cancer over my parked car.

Grass, weeds, dirt/soil and water enter through the window, causing further deterioration to the frame.

Three times in 3 years I have requested this window be repaired or bricked up (the cheapest option) and even obtained three quotes. All to no avail.

I’m waiting for the day I see scratches on my car from where the concrete has fallen onto it.

Can you please tell me what my options are?

Answer: It is the strict duty of the Owners Corporation to repair and maintain the common property

The subject window appears to be common property and it is the strict duty of the Owners Corporation to repair & maintain it. You may apply for mediation and, if the Owners Corporation refuses to attend or no resolution is reached, you may seek orders from NCAT that the Owners Corporation carry out its duty.

Under the strata legislation you may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by you as a result of the Owner Corporation’s failure to repair and maintain the common property.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #479.

Question: Does neglected maintenance within a lot become the owner’s responsibility after a certain period?

We have a Strata Scheme that is over 28 years old. Around half of the 70 lots have not been renovated. At what point can the OC be removed from responsibility of “original” wet areas that have the major financial burden on the OC?

It does not seem reasonable to replace bathrooms at the cost to owners that have updated their lots at their own expense and be burdened by those who have not. Does neglected maintenance within a lot become the owner’s responsibility after a certain period? Especially given that there is no way for the OC to review or maintain the “wet areas membrane” if it’s not looked after by a lot owner.

Answer: This will depend on the nature of the work required to be undertaken.

It would be good to know on what date the strata scheme was registered. You should also review the by laws that apply to this scheme.

Presently section 106 of the Strata Schemes Management Act 2015 is the guiding statutory basis for determining the Owners Corporation’s obligations in relation to common property.

This will depend the nature of the work required to be undertaken.

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.

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.

Section 106(3) does also provide that it is not applicable to a particular item of property if the owners corporation determines by special resolution 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.

The nature of this will need to satisfy the test in section 106(3) and if it does a resolution to that effect is required by the owners corporation at the meeting.

Pierrette Khoury
Khoury Lawyers
E: [email protected]
P: 0415 459 486

This post appears in Strata News #474.

Question: We recently had a Special Levy passed to replace Balustrades on balconies in our Strata Block. We own ground floor units and therefore do not have balconies let alone balustrades. Should we be exempt from this Levy?

We recently had a Special Levy passed to replace Balustrades on balconies in our Strata Block.

We own 2 ground floor units and therefore do not have balconies, let alone balustrades.

The total of our Special Levies for the two lots is almost $7000. Should we be exempt from this Levy?

We applied for Mediation, but the Owners Corporation were not interested, so we have made an application to NCAT for a hearing.

Are we correct in not wanting to pay for something that doesn’t affect or benefit us?

Question: Our apartment block has a car stacker. As our apartment doesn’t have a car space, why we are levied for maintenance etc when this common property is of no benefit to us?

The following response answers both questions:

Answer: If the car stacker and balcony balustrades are common property and there is no common property rights by-law transferring responsibility for their repair and maintenance to the lot owners who use them or have the benefit of them, then the owners corporation must pay for their repair and maintenance from funds to which all lot owners contribute.

If there is nothing noted on the strata plan that indicates the car stacker or the balcony balustrades are lot property and not common property, then the car stacker and balcony balustrades will likely be common property. If they are common property and there is no common property rights by-law transferring responsibility for their repair and maintenance to the lot owners who use them or have the benefit of them, then the owners corporation must pay for their repair and maintenance from funds to which all lot owners contribute.

The above situation is the same as a door or a window in an external common property wall that only services or benefits one lot: the door and window are common property that the owners corporation must repair and maintain.

Even if common property can only be used by some lot owners and not all, it is still common property that the owners corporation must pay to repair and maintain. The only way an owners corporation can pay for repairs and maintenance is to raise levies on all lot owners.

Unfortunately, there is no legal basis for a lot owner to avoid paying a levy that is being used to repair and maintain common property that that owner does not have the use or benefit of. Therefore, in the NCAT case brought by the lot owners who wish to be exempt from a special levy to repair balcony balustrades, assuming the balcony balustrades are common property and there is no common property rights by-law transferring responsibility for their repair and maintenance to lot owners, based solely on the argument that their lots do not have any balcony balustrades, it is likely that NCAT will dismiss the case and there is the possibility that NCAT will make a costs order against them if it finds that special circumstances exist.

NCAT is likely to find special circumstances exist and make that costs order if the case has no tenable basis in law or fact, which may appear to be the case here. However, these lot owners should seek legal advice before proceeding any further with their case to understand whether they have an arguable case with prospects of success, what could happen if NCAT dismisses their case and the costs orders that could be made against them.

Carlo Fini
Lewis & Charles Lawyers
E: [email protected]
P: 02 9159 9053

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

Question: The hallway connecting several units and the lift has had a very foul odour for quite some time. What can I do to get strata to investigate the cause and rectify the problem?

The hallway connecting several units and the lift has had a very foul odour for quite some time. Strata have been notified about the problem. They have not identified the cause of the problem and only respond by cleaning the carpets. The odour keeps returning after a couple of weeks.

I have lost two tenants because of this and my unit has now been vacant for 2 months. Potential tenants say they would lease the unit if the smell wasn’t there.

What can I do to get strata to investigate the cause and rectify the problem?

Answer: Ask the strata manager when the next service or maintenance of the elevator is. Meet the tech and ask for the elevator pit to be checked.

Sometimes the elevator pit will get water in it, which will become stable over time. Ask the strata manager when the next service or maintenance of the elevator is, meet the tech, and ask for the elevator pit to be checked.
Alternatively, make a separate service call, it will cost you a few dollars, and ask to meet the mechanic and ask him/her to inspect the pit and maybe the roof of the car, just in case.

See how you go.

Nigel Wraight
Forte Asset Services
E: [email protected]
P: 1800 351 078

This post appears in Strata News #469.

Question: Who is responsible for repairing a pipe that passes through common property, but only services one unit?

Our strata building of 6 was built in the late 60’s. There is a hot water pipe under the ground floor (common property) servicing one single unit and it appears to have a leak according to tradesmen renovating the unit.

This pipe services only that unit and no other unit taps into it. Who is responsible for repairing a pipe that passes through common property, but only services one unit?

Answer: If the pipe only serves that lot and is not within any common property wall then that would fall on the individual owner as his or her responsibility. However, if the pipe is within a common property wall it would fall on the Owners Corporation as its responsibility to maintain and repair.

Pierrette Khoury
Khoury Lawyers
E: [email protected]
P: 0415 459 486

This post appears in Strata News #464.

Question: In NSW, do owners corporations need to hold a meeting and pass a resolution to replace something that existed on the common property and was removed to carry out repairs?

In NSW, do owners corporations need to hold a meeting and pass a resolution to replace something that existed on the common property and was removed? For example, floor tiles on stairs were removed so that cracks in the concrete could be repaired.

Some time has passed and now the strata committee says there are not enough funds to lay new tiles. The strata committee obtained 4 quotes, voted on which to accept and want to ask the tiler to start work. Some owners say the work cannot start until approval is given in an EGM and other owners say that owners corporation consent is not required to replace tiles because the stairs were tiled previously. Most owners want the work done as soon as possible to avoid restrictions in future if covid-19 worsens.

For the record, no owner is objecting to the style of the tiles as they’re almost the same as the previous tiles.

Answer: The strata committee can approve repair and maintenance of the common property.

Assuming that the strata committee is not restricted by resolution at a general meeting from making such a decision, the strata committee can approve repair and maintenance of the common property which would include replacing common property floor tiles with the same or similar tiles if the same tiles cannot be found.

Any addition or alteration of the common property would require a special resolution at a general meeting under section 108 of the Strata Schemes Management Act 2015.

Matthew Jenkins
Bannermans Lawyers
E: [email protected]
T: 02 9929 0226

This post appears in Strata News #458.

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: [email protected]
P: 02 9281 6440

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

Question: Our sinking fund has run out of money and we need a lot of repairs and maintenance done to common property.

Our sinking fund has run out of money and we need a lot of repairs and maintenance done to common property:

the window paint has all peeled off and in some cases starting to rot,

lintels are rusting,

there is a very large common area window that needs to be replaced (totally rusted)

structural pointing to brick work is required and this will require a lot of scaffolding.

I had a remedial report commissioned that was agreed to at an AGM detailing about $360k of works.

We did not have a capital works plan in 2020 so I’ve had one commissioned. The report identified that we needed to raise 60k per lot (taking into account contingencies) and that we also need to double the amount of our levies. These need to be increased from 5k to 10k to cover future expenses.

Owners have agreed to levy increase but WILL not agree to a Special Levy of 360k. If we leave these issues they will get worse and if we use up the increased levies for the current maintenance that is required, we will not have money left for future expenses like replacing the roof and repainting in 10 years time.

We live in a block of 6 lots. What can we do?

Answer: The owners corporation needs to be made aware of its strict liability to repair and maintain the common property and that failure to do so exposes it to applications to NCAT to force them to comply.

The owners corporation needs to be made aware of its strict liability to repair and maintain the common property and that failure to do so exposes it to applications to NCAT to force them to comply with their statutory duties and to claims for compensation for breach of such statutory duties.

You may apply to NCAT for Orders that a compulsory managing agent be appointed and make all decisions of the owners corporation and strata committee. The downside is that no one will have a vote for the duration of the appointment, but, the managing agent will arrange to carry out the works (or NCAT will stipulate that the agent must carry out the specified works) and pursue owners for outstanding levies.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #444.

Question: My balcony doors & shutters were damaged in strong winds 7 months ago, but nothing has been done. Is this considered acceptable to wait for an Insurance company before any repairs are carried out when it could be dangerous?

I own a Strata apartment in Sydney which was built in 2013. My apartment is on the top floor (level 4) and balcony doors & shutters were damaged in strong winds back in February 2020. The sliding balcony doors, although very heavy, were pushed inwards off their track in the wind and were jammed shut. Nothing has been done to secure these doors and I get very frightened every time we have strong winds.

I have contacted Strata Management and the Committee various times as I am frightened that if wind can push them half off inwards, there is no guarantee they won’t be pushed the whole way in next time. All I get told is it is part of an insurance claim and nothing will be done until that is finalised.

I did ring the Insurance company myself about 3 weeks ago and was told the claim was approved but it seems some things may not have been although no one has told me if that has anything to do with me.

I am thinking of putting in a complaint to NSW Fair Trading as it over 6 months and I am frightened for my safety and any further damage to inside my apartment. I don’t mind waiting for the shutter to be put back up but I think the door should have been fixed straight away.

Is this considered acceptable to wait for an Insurance company before any repairs are carried out when it could be dangerous?

Answer: The delay is quite unreasonable, however, you have an obligation to mitigate your losses.

Leanne Habib, Premium Strata:

It is likely that the subject sliding doors are common property (subject to any notations on the strata plan or any by-laws to the contrary) and therefore the responsibility of the Owners Corporation, and, in this case, its insurer.

The delay is quite unreasonable, however, you have an obligation to mitigate your losses. In other words, you should notify the Owners Corporation in writing, that you will carry out the required repairs, at the Owners Corporation’s expense, if they do not do so by a certain date. If they do not carry out the works within the stipulated time frame, then we would recommend you temporarily secure (rather than carry out permanent repairs or replacement, if possible) the doors and remit the invoice to the Owners Corporation for payment.

Lodgement of an insurance claim does not relieve the Owners Corporation of its strict liability to repair and maintain the common property.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

Tyrone Shandiman, Strata Insurance Solutions:

Most insurance policies have conditions which require you to take all necessary steps to minimise and/or stop any further loss or damage from occurring and maintain your duty of care to others by taking reasonable actions to address safety concerns. The question of what is reasonable is subjective and can differ from person to person.

If a safety hazard exists until an insurer indemnifies costs for a claim, the party that has responsibility to maintain the balcony doors should take action to address this safety hazard. In this instance and given the insurance claim is taking so long, it might include conducting repairs prior to the insurance claim being finalised. The act of repairing damage generally will not affect whether the insurer accepts the claim, however if during assessment the insurer deems the damage not covered, the party who has responsibility to maintain the balcony doors will be responsible for costs associated with those repairs. If you are repairing prior the claim being settled, we recommend you ask the repairer documents their view on the cause of the damage.

If the owners corporation are responsible for the balcony doors Section 106 (1) of Strata Schemes Management Act 2015 states 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.

Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
T: 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 and the specific coverage afforded under their policy wording. 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 #434.

Question: We had a leak in our ceiling and now mould is growing on the water damaged parts. We reported it to our strata manager months ago, but nothing has been done to fix the problem. What are my options as an owner?

We had a leak in our ceiling and now mould is growing on the water damaged parts. We reported this to our strata manager months ago. He advised this was from a balcony above us and that it was going to be fixed.

I have followed up numerous times and they have not been able to tell us if it has been fixed and can’t tell us when the damage to our ceiling will be fixed either.

I’m concerned about the mould for health issues. Is there a legal turnaround time for repairs to be made? Can you please tell me what my options are as an owner?

Answer: For issues relating to maintenance of “lot owners” property, legalisation does not provide the same obligation on maintenance it does for the owners corporation.

Section 106 (1) of the Strata Schemes Management Act 2015 No 50 states 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.

Comments from the judge in the case Seiwa Pty Ltd v Owners Strata Plan 35042 [2006] NSWSC 1157 relating this legislation may provide some guidance on timeframe to repair “That duty is not one to use reasonable care to maintain and keep in good repair the common property, nor one to use best endeavours to do so, nor one to take reasonable steps to do so, but a strict duty to maintain and keep in repair. The duty to maintain involves an obligation to keep the thing in proper order by acts of maintenance before it falls out of condition, in a state which enables it to serve the purpose for which it exists”

For issues relating to maintenance of “lot owners” property, legalisation does not provide the same obligation on maintenance as section 106 (1) does for the owners corporation.

If you do not feel the actions of the owners corporation or lot owner (depending on who has responsibility to maintain the balcony) are reasonable, you may wish to refer to the Fair Trading website on resolving disputes: NSW Fair Trading

From an insurance perspective, water damage claims are our most contested claims with insurers because there is often a component of maintenance and also repair of water damage.

Insurers cover the cost to repair water damage but generally exclude repairs costs related to fixing and finding the leak, as it generally considered the owners/owners corporation responsibility to maintain their property and such repairs relate to general maintenance or wear and tear.

The insurer has exclusions such as lack of maintenance, rust, oxidation, wear & tear, corrosion, gradual deterioration, developing flaws, building defects etc.

Generally, leaks are only covered if the leak is caused from “sudden and accidental damage” such as impact damage, storm damage etc. However, the consequential water damage (to insurable property) can be considered on a case by case basis – most policies will exclude damage caused by non-rectification of a known property defect, error or omission. Long term water damage or rot may also be something that the insurer does not cover depending on the circumstances as strata policies are designed to cover sudden and accidental damage.

Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
P: 07 3899 5129

This post appears in Strata News #423.

Question: Due to recent storm events there was water ingress from common areas into my apartment, damaging floorboards. What is the process to fix the damage?

Due to recent storm events (driving rain and winds), there was water ingress from common areas (under the front door) into my apartment damaging floorboards. My front door is located on an outside walkway that is a common area as it provides access to 4 units.

I’ve contacted my strata managers various times within the last week (since discovering the damage), however, I’m still waiting for their response and action to the matter.

I was advised they need to organise a plumber to inspect if there are any burst pipes and a roofer to check for leaks. As part of my enquiries and various phone calls and email, I kept advising that no pipes or leaks are visible as there is no water damage or continued water seepage from pipes or on the ceiling.

Can you please advise the process moving forward to fix the damage? and if Strata or the building insurance should repay and pay for the damage as the front door does not provide a full seal.

Answer: In the case of water damage claims, generally insurers will require the cause of the leak to be repaired before repairs commence for consequential water damage.

In the case of water damage claims, generally insurers will require the cause of the leak to be repaired before repairs commence for consequential water damage.

If the claim is as straight forward as the questioner is suggesting, usually an explanation of the event (i.e. water ingress under the front door from heavy rains) and an invoice showing the door seal has been put on the door should be sufficient for a claim to proceed. However, if the source of the leak is unknown or there is concern the leaks will continue, action should be taken to appoint an appropriate trades person to address why water is entering the building – this can include engaging specialist leak detector companies.

Once the leak issue is addressed, the lot owner needs to understand which policy provides cover between the strata insurance & lot owners contents/landlords insurance.

If the flooring is a temporary or floating floor, it is only covered by strata if the policy specifically covers floating floors. The Strata Management Act does not require an owners corporation to insure temporary/floating floors, however some insurers automatically provide cover or have an optional benefit for floating floors. If it is not covered by the strata insurance policy, the lot owner will need to claim on their contents/landlords insurance policy.

If you are claiming on the strata policy this can be done by claiming through the strata manager, broker or insurer. If it is a contents/landlords claim then the owner will need to contact their insurer.

Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
P: 07 3899 5129

Question: Can the owners corporation fix my neighbour’s leaking verandah?

My mother’s apartment has a flat above her whose verandah area is partly over her lounge and for the last year has been suffering due to the upstairs verandah leaking through her roof.

They are new owners who recently renovated the verandah and since then it has leaked.

The Strata company don’t appear to be doing anything, supposedly some repairs were done recently but the roof still leaks.

How can get things moving to resolve the leak? My Mother is about to return home after being in hospital and is absolutely devastated that nothing has been done. She is 85 and this is her home, which is becoming unliveable!

Answer: While the exact cause of the balcony leakage is unknown, this is likely an issue with the common property.

The owners corporation must properly maintain and keep in a state of good and serviceable report the common property in accordance with section 106 of the Strata Schemes Management Act 2015 (the Act). While the exact cause of the balcony leakage is unknown, this is likely an issue with the common property.

In addition, the provisions of the by-laws and building management statement, if any, should also be taken into account as they may impose more specific requirements in addition to the general requirements under the Act.

Who has responsibility for the ongoing maintenance of a renovated balcony/verandah?

It is unclear what kind of renovation has occurred and whether prior approval by the owners corporation is required (and obtained).

If there was a special resolution approving the renovation under section 108 of the Act that specifies that the ongoing maintenance of the balcony after its renovation is to be the responsibility of the owner, instead of the owners corporation, then it is up to your neighbour to fix the leakage.

However the more likely scenario is that the renovations were completed either without owners corporation approval, or with a special by-law registered to the effect that the owner of the lot undertaking renovation work indemnifies the owners corporation for any liabilities arising from the renovation. If that is the case, the primary person responsible for fixing the issue, as far as all other owners in the strata scheme are concerned, would still be the owners corporation.

Consequences of the owners corporation not fulfilling their duty to maintain and repair common property

According to section 106 of the Act, 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. It may, however, be difficult to quantify the loss associated with the general unpleasantness of the water leakage and the consequent limited use/enjoyment of part of the units.

You may also consider joining the strata managing agent to any claim that you may have against the owners corporation if the managing agent has not fulfilled its duties.

Next steps

Review previous minutes for general meetings to find out if there is any special by-law that was proposed for your neighbour’s renovated verandah.

If there is no by-law that negates the owners corporation’s obligations then write to the strata manager and the secretary requesting their immediate action to fix the leakage and/or propose a motion for an upcoming general meeting for the issue to be attended to and that the contract with the current strata manager not to be renewed and another strata manager appointed.

If the matter remains unresolved, you can lodge an application for mediation with NSW Fair Trading or start proceedings in NSW Civil and Administrative Tribunal.

Yuhao Gu
Omega Legal
E: [email protected]
P: 0402 990 108

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

Question: Water has been leaking from our front yard into the car park below for a few years without resolution. Must I use the strata’s expensive contractor for the basement waterproofing? How do I get the committee to act?

I am a committee member in a complex that contains 28 townhouses. Our front yard is common property and directly under this common property is our car space in the garage.

We’ve had a leaking problem for a few years. All units have paid a lot of special levies a few years ago to get this leakage problem fixed. The problem has been mostly fixed except in our area and a couple of other spots because the previous contractor left without fully finishing the basement waterproofing. Our leak is the only one causing water to directly run onto our car.

The contractor came out and waterproofed part of our neighbour’s front yard instead of ours. The error occurred because of mismanagement from strata. Plus, our strata manager keeps changing, so there is no consistency with communication.

With some difficulties, I finally managed to get our strata manager to organise someone to look at our basement waterproofing again. The contractor has come back with a quote that is ridiculously expensive for waterproofing a very small area. The new strata manager sent this costly quote to the committee. No-one has responded to the quote. The leaking has been getting worse because it has not been rectified for a few years and I am really concerned it may cause even more problems if we don’t fix it soon.

Can I get another quote from another contractor or do I have to stick with the one that Strata sent through?
Does Strata have the right to force us to use their delegated contractors? Would they argue that only their contractors can do the job?
What can I do if none of the committee members responds?
Does committee/strata have the obligation/responsibilities to repair common property ie waterproofing our front yard? What if one of the committee members object to this?
What options do I have to get Strata/Committee to carry out the repairs?

Answer: You may get another quote from another contractor, however, make sure that the quote covers exactly the same scope of work so that any comparison in cost is viable.

Yes, you may get another quote from another basement waterproofing contractor, however, make sure that the quote covers exactly the same scope of work so that any comparison in cost is viable.

The strata committee should pass a resolution to obtain more competitive quotes.

Your Strata Manager’s track history of fixing the problem leaves a bit to be desired. With such a large and complex job, consider obtaining a consultant to determine the source of the water egress who can then prepare a scope of works to put out to tender. This will ensure that the job gets done and that any price comparisons are like for like.

If you can obtain some support, a committee meeting must be convened if at least one-third of the committee members so request. Alternatively, you may make a qualified request (with not less than ¼ of the unit entitlements) to convene a general meeting of the owners corporation.

The Owners Corporation has a strict duty to repair and maintain the common property. As for your waterproofing, it must be determined whether it is lot or common property. Generally, it will be common property but you will need to review the strata plan for any notations and see if any by-laws displace the general position.

If the failure to repair relates to common property, this is a breach of the Owners Corporation’s statutory duty. Remedies include seeking compulsory appointment of a managing agent to carry out such duties, however, you will need to ensure that the failure relates to common property. You may also seek to recover damages for breach of this statutory duty.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

These articles are not intended to be personal advice and you should not rely on it as a substitute for any form of advice.

This post appears in Strata News #211.

Question: What steps do we take to organise a leaky roof repair? What if some owners refuse to pay?

I purchased into a medium sized strata scheme earlier in the year. This is our first experience living in strata. I am now the chairperson of the scheme.

Our roof leaks and is in need of repair. Is a leaky roof repair something that usually falls to the committee, or in most circumstances would the strata manager handle the roof repair? There is hardly any money in the sinking fund, so lot owners will have to contribute. How do we go about raising the amount and what do we do about the lot owners who refuse to put their hand in their pocket?

I guess if there is a recalcitrant owner who doesn’t pay, the Strata Manager should sue the owner and if after all the other following proceedings no payment is made the owner would be subject to bankruptcy and the unit sold.

Is it possible to provide a step by step plan of how we can accomplish the leaky roof repair? I’m at a loss as to how we proceed.

Answer: The roof repairs will be common property and a repair that jointly the Executive Committee and the appointed Strata Manager would arrange for its repair.

The roof repairs will be common property and a repair that jointly the Executive Committee and the appointed Strata Manager would arrange for its repair. Subject to the delegated duties of the Strata Manager, generally Repairs and Maintenance such as a leaky roof repair fall under the agreed services of a Strata Manager.

The Strata Manager will generally assist with the process of sourcing quotes, making the necessary enquiry etc. on behalf of the committee, however, the decisions and instructions will remain the responsibility of the committee and owners.

First, an expert should be engaged to inspect and determine the scope of repairs required to address the issues with the roof, upon a scope being finalised and agreed to, tenders for repairs should than be obtained.

Once tenders are obtained, a meeting of the Owners Corporation should be held to consider the tenders and raise funds if there isn’t enough surplus in the sinking fund. Following the approval and raising of funds, work can commence on the leaky roof repair.

The raising of funds via a special levy can only be considered at a general meeting. 50% of owners present and entitled to vote will need to be in favour of a special levy for the motion to be passed. Therefore both the special levy and tenders should be referred to a general meeting as each motion will be subject to another, i.e. funds are required only if the works are approved.

If the special levy and approval of works is not passed by owners, and the roof repairs are essential to maintain the common property, the Owners Corporation will then be in breach of its obligations under Section 106 of the Strata Schemes Management Act 2015, which states:

106 Duty of owners corporation to maintain and repair property

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.

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.

This section does not apply to a particular item of property if the owners corporation determines by special resolution 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.

The process for debt recovery is the same for all levy types, ordinary and special levies.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #114.

Question: Why am I required to fund my neighbour’s leaky roof repair?

I am in a strata with 12 units. The front 8 units are at least 25 years older than the back 4 units, which I own one of.

Currently we have the situation where the front 8 need their roof replaced (the front 8 are all attached, the back four are completely separate to them) and of course, there is not enough in the sinking fund to cover this. So the strata have called for all owners to put in $3000 to top up the sinking fund to cover the leaky roof repair expense.

We are currently getting this organised, but it has been frustrating me that the back four owners have to pay for the leaky roof repair when we have nothing to do with this section of the strata scheme. Our roof is not being touched and we get no benefit from this.

I certainly agree that their roof needs replacing and I don’t want to stand in the way of them getting this done, but selfishly, I don’t see why I am required to pay for this.

What are the usual strata rules in this scenario, where there is a significant age difference between units, and certain units need building works, and others do not?

Answer: If all lots are under one strata scheme, all owners of that strata scheme will be responsible to contribute to the common property repairs.

If all 12 lots, i.e. the 8 front units and 4 back units are under one strata scheme, then all owners of that strata scheme will be responsible to contribute to the common property repairs.

The Strata Scheme Management Act requires the Owners Corporation under 106 to repair and maintain common property. It is not based on if all owners use the area or benefit from the subject roof space but where an area is deemed to be common property the owners corporation are liable to repair and maintain.

The roof is generally common property unless there is a special bylaw transferring responsibility back to a lot owner(s) or if the Owners Corporation have especially resolved to divest of their responsibility pursuant to Section 106 (3) of the Strata Schemes Management Act 2015 wherein the Owners Corporation have determined that it is inappropriate for the Owners Corporation to maintain, renew or replace or repair or the roof areas.

Therefore, in summary, the Special levy if raised to cover the leaky roof repair requires consent by the majority of owners at a general meeting, the total amount will be levied to each owner according to the unit entailments. Your contribution will be calculated based on your unit entitlement.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

Question: Who is responsible for contractor’s added costs when site access is deliberately limited?

Who is responsible for contractors added costs when site access is deliberately limited?

I have been advised by a contractor that access to one owner’s lot has repeated been restricted as the residents leave the premises without making access arrangements.

All other residents leave keys with neighbours so that tradesmen can make regular calls during ongoing balcony renovations.

The inefficiencies resulting from restricted site access are costing the contractors time & money and they have advised that random access restrictions will incur additional costs for our Owners Corporation.

Can the SC insist that the rogue owner solely responsible for costly work delays be held individually responsible for reimbursing the Owners Corporation for additional expenses incurred as a direct consequence of their actions.

Answer: The owners corporation could seek an order for access ongoing. Breaches of this can lead to penalties.

Ultimately, the owners corporation could seek an order for access ongoing (and breaches of this can lead to penalties). This will incur time and cost in going to the tribunal.

The owner needs to be put on notice immediately as to the issues they are causing – I would then suggest a fee proposal is sought from a lawyer regarding the access issues and that should the issues continue, the scheme should take advice in this regard. Ultimately, if the contractor is already onsite you don’t want to inflame the owner such that access is denied completely (which may cause all work to stop), however the owner/s need to understand that they are part of a common community and all need to go their bit in assisting the owners corporation to conduct works and anything else it needs to do which necessitate access within lots.

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

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—

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),

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.

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.

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

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.

Andrew Terrell
Bright & Duggan
E: [email protected]
P: 02 9902 7100

This post appears in Strata News #403.

Question: In our strata scheme, there are 25 unit walk ups and 12 units in the tower. The tower has a lift, only servicing lot owners who live in that building. Do all lot owners have to pay for maintenance of the lift or is it solely the responsibility of those units that have use of it?

Answer: You should refer the question to your strata manager, however – the strata plan or by-laws may contain information which isolates the costs of the lift upkeep only to those owners that have the benefit of it.

Andrew Terrell
Bright & Duggan
E: [email protected]
P: 02 9902 7100

This post appears in Strata News #398.

Question: A resident has repeatedly requested the committee repair a known trip hazard that hasn’t been fixed for years. What are the insurance implications around known hazards that the committee will not address?

Answer: You need to first to receive confirmation from a qualified person that the trip hazard exists.

With trip hazards, firstly you need to establish if someone qualified has given advice saying that this is a trip hazard and the committee has not addressed that specific issue.

If that’s the case, then when the policy comes due for renewal, you do have to disclose all things relevant to the insurers decision to insure the property. If the trip hazard has just been identified by an owner, but there isn’t a professional saying that it should be remedied, it wouldn’t necessarily be an item that would need to be disclosed.

Aside from what does and doesn’t need to be disclosed to the insurer, if there is a claim and there is evidence by the injured person to show that the body corporate or owners corporations were advised of the trip hazard and didn’t take action, it will increase their culpability at the time of the claim. Of course, that then has a flow on impact in that it increases the cost of the claim and impacts your claims history more severely.

The idea is that it’s not necessarily just about what you do and don’t have to disclose with the insurer. Risk minimisation is also recommended to assist in reducing your claims history when you are seeking quotes for insurance.

Regarding the other question from NSW which was related as well: A stair carpet is threadbare and uneven in parts. Does this compromise our insurance? This would fall under the same thing.

Committees should take steps to minimise claims but you don’t have to disclose every single potential hazard to the insurer, just the major hazards that you think they should know about when taking the policy out. But you should take action to minimise losses because less claims will definitely help you when you’re seeking quotes for insurance.

Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
P: 07 3899 5129

This post appears in Strata News #391.

Question: Our committee is aware of safety hazards and incidences have occurred but they refuse to spend money to fix these items. What can be done when the committee won’t spend on necessary maintenance?

What can we do when the committee won’t spend on necessary maintenance?

Our committee is aware of quite a few items which require urgent attention in our building. The situation is so bad it is a safety hazard. A work health and safety audit was finally done. It has been 6 years since the last audit. The audit highlighted a known trip hazard. It states the possible danger is on many floors in the building and recommends it be repaired or replaced in the short term.

Residents have tripped on this hazard. We have elder people living in the building. There are other major repairs that are also required.

The Committee will not act despite the fact that we have a very very large sum of money in our fund.

What sort of liability is the building opening themselves up to by not getting this work done?

Answer: The strata committee needs to turn their attention towards the idea of ‘lets you make best use of this money. Let’s improve our buildings.’

I’ve seen this before in buildings. We took over a building two years ago that had a million dollars in their fund, it’s a high profile building and they were able to raise the funds but they just weren’t spending them. This is due to governance and decision making issues. What that often means is that the people on the strata committee for some reason aren’t able to spend the money because they haven’t been able to either get organised or turn their attention and hearts towards the idea of ‘lets you make best use of this money. Let’s improve our buildings.’

The strata committee would need to take a good look at the way they’re doing business because it is probably problematic, and they need to put some more attention towards that. So that’s the awkward bit – a necessary conversation for that building.

The first you should do would be to write to the strata manager and ask them to attend to this problem. It doesn’t have to be a thesis just a straightforward email, ‘we wish to write and formally put in a request to repair this item on common property. It’s on these levels ___. Can you please arrange for this to take place? Please raise this from the committee and I’ll get a formal reply to them’.

If the Strata Manager said no, the next thing I would do is I would personally get a couple of quotes to do the repairs and put a motion on the next AGM agenda. Any owner can put a motion on the AGM agenda and the motion I would put would be to accept one of the two quotes.

If this gets voted down, apply to Fair Trading New South Wales for an application to mediation which now costs nothing. Include the history, the work health and safety report, the quotes, the AGM minutes the AGM agenda and what was discussed and what you want to achieve, which is: get this item fixed. I would be surprised if that wasn’t successful.

Regarding liability for not getting the work done, you have insurance. I hate it when I hear buildings say, ‘Oh, we’ve got the public liability insurance don’t worry about it’. Actually, how about stepping back. We do not want anyone to get hurt in our buildings, we want to look after our tenants and our visitors and our tradespeople. You do have insurance, but there is always liability in strata buildings and in litigation the net goes out. The strata manager gets called in, the committee gets called in, the building gets called in, and the last thing you want to go through is litigation because someone’s broken a bone or really hurt themselves and is now impaired and you would have to sleep at night with that. Anything to do with safety is just so important.

Nikki: Like to say it’s not just about the liability insurance is it. It’s the people that are actually living in the building.

If it’s a safety hazard that’s been picked up six years ago, that’s a problem that should be addressed.

Rod Smith
The Strata Collective
E: [email protected]
P: 02 9879 3547

This post appears in Strata News #384.

Question: In our commercial unit, there have been leaks for many years and we can’t seem to get them fixed. What action can I take to get repairs carried out as the condition of the building is ruining our office and some of our stock?

We are the largest unit in a commercial complex so pay the highest levies. There have been some leaks in the unit for many years now and they never seem to be fixed. A couple of contractors have attended but the building leaks every time it rains. They have said they have done everything they can do but it is ruining our office and some of our stock.

What action can I take to put them on notice/ get this resolved as I am extremely frustrated with their lack of care?

Answer: I would have a look at the agreement with the owner of the building including any terms and conditions entered into.

I would have a look at the agreement with the owner of the building including any terms and conditions entered into. I would remind them of their obligations under the agreement. Without having seen the agreement my answer is limited. It is unclear whether you are a tenant. If you are, the terms of the lease will have specific clauses in relation to the matters you have raised. If necessary a report can be prepared for you to rely on in relation to the defects and you have recourse through the Tribunal or court.

Pierrette Khoury
Khoury Lawyers
E: [email protected]
P: 0415 459 486

This post appears in Strata News #383.

Question: Is it allowable/acceptable to get in touch directly with strata manager for unit repairs to common property, rather than go through the executive committee?

Answer: Yes, because in all likelihood, before the strata manager issues a work order for the repairs (subject to the extent of repairs), the strata manager will seek approval from the strata committee to determine if the matter is a proper expense of the owners corporation.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

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

This post appears in Strata News #290.

Question: The garden directly outside my apartment never gets maintained as I’m the only one affected by it. How can I ensure garden maintenance is scheduled and regular?

I live in an apartment in a small scheme. In the block I live in, we have a walkway that has a well-established garden on either side of the path. In front of and beside my unit is a well establish hedge to block the view of the garbage area.

None of the owners corporation members live in the block of units with a garden or hedge, so I find these areas are just left to grow wild unless I ask for the hedge to be trimmed. Every time, I have to ring and complained and then it takes a while to have the job done.

I get the feeling that unless the garden maintenance is near their apartment and directly affects them, they don’t care. Knowing that the garden and hedge need maintenance at less twice a year, it makes sense to me for the job to be scheduled.

Why doesn’t the garden maintenance outside my apartment happen without me asking?

Answer: The scheme has a strict obligation to maintain all aspects of common property. Follow our 4 steps to find out how to make sure this is regularly scheduled.

The scheme has a strict obligation to maintain all aspects of common property – here is what Judge Brereton said a long time ago.

“….4 The duty to maintain involves an obligation to keep the thing in proper order by acts of maintenance before it falls out of condition, in a state which enables it to serve the purpose for which it exists. Thus the body corporate is obliged not only to attend to cases where there is a malfunction but also to take preventative measures to ensure that there not be a malfunction. The duty extends to require remediation of defects in the original construction of the common property. And it extends to oblige the owners corporation to do things which could not be for the benefit of the proprietors as a whole or even a majority of them. 5 It follows that as soon as something in the common property is no longer operating effectively or at all, or has fallen into disrepair, there has been a breach of the s 62 duty…..”

The section is now Section 106 under the new legislation.

I should think the easy way to handle this is to raise at the AGM:

when you are discussing the budget, get the cost allocated in the fundraising

get the committee meeting after the AGM to commit and instruct the manager to organise it. Work out the dates in the year eg April and November when the maintenance needs to be done so the manager diarises this and then it’s locked in and minuted

If it is still not done, you know it is an issue with the manager, not the committee and you can raise this as a performance matter about the strata manager (and bring the oversight to the attention of the committee) at the next meeting. They’ll make sure they do it in the future.

If it doesn’t get up at the meeting at budget level (and the committee meeting after the AGM to approve the frequency and dates and instruct the manager) then write to the manager to put on the meeting agenda for next year. They are legally obligated to put it on or you can go to Fair Trading (which starts with mediation) and this may be the reality check they need to get on with it.

Karina Heinz
Progressive Strata Services
E: [email protected]
P: 02 9389 9599

This post appears in Strata News #264.

Question: Our Owners Corporation collects levies but there is a failure to maintain and repair common property. What can I do to get things back on track?

I pay a levy to our strata and believe that this includes maintaining the grounds, lighting, mowing of the lawns/gardens etc. This has not been done for months. I’ve contacted them and they are not interested in doing anything.

What can I do or who can I contact about this?

Answer: You should put the Strata Managing Agent on notice that the Owners Corporation is in breach of its duties.

All the items to which you refer are part of the Owners Corporation’s repair and maintenance duties pursuant to Strata Schemes Management Act 2015 – Sect 106 Duty of owners corporation to maintain and repair common property.

You should put the Strata Managing Agent on notice that the Owners Corporation is in breach of its duties and that the disrepair of the common property is devaluing your lot.

If action is not taken and the Owners Corporation persists in neglecting to properly maintain and repair common property, you could obtain orders from the NSW Civil and Administrative Tribunal (NCAT) that it do so (after mediation if the Owners Corporation elects to attend) and depending on the severity of neglect, you might be able to appoint a compulsory managing agent for 12 months to bring the building up to a state of proper repair.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

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

This post appears in Strata News #115.

Question: Should the Strata Manager Advise the Owners Corporation to Upkeep and Repair Common Property?

An item on our Agenda at our recent AGM has caused me concern. This item also had been on our AGM meetings Agenda for the past five years or more, and not approved to be repaired by the Owners corporation each time. The repair is always deemed “Not urgent”.

The item:

The flooding of the rear yard of the units – caused by a block drain – or most likely a broken pipe – that floods the rear yard after heavy rain.

Once against the Owners Corporation all agreed to put this item aside and not repair common property, saying it isn’t urgent!….. Reason given – lack of funds.

Is it wrong for the Strata Manager to not advise the Owners Corporation that they are responsible for repair common property? Shouldn’t the Strata Manager suggest a special levy be called to pay for the repair?

This small unit block is a heritage building and registered as an item in the local council heritage registry.

Answer: The role of the Strata Managing Agent is to represent the Owners Corporation

The role of the Strata Managing Agent is to represent the Owners Corporation. Some agents are appointed with limited delegation that would determine the extent of their duties.

In the majority of management, the Strata Managing Agent would have it noted that they can give owners general legislative advice. The Managing Agent takes instructions from the Executive Committee. The Executive Committee is like the Board of Directors of a company and the Manager is like a CEO.

The Owners Corporation must comply with Strata Schemes Management Act 2015 – Sect 106 Duty of owners corporation to maintain and repair the property and other similar sections in other states. This section places an absolute duty on the Owners Corporation to maintain and repair common property unless the Owners Corporation passes a resolution to exclude the Strata Plan from this duty.

The Managing Agent is doing the right thing by including the item on the agenda, but it is the decision of the Owners Corporation to pass the works to repair common property.

If an owner is not happy with a resolution of the Owners Corporation then the lot owner can:

Apply for Mediation through Fair Trading

if no agreement can be made at Mediation then the owner can

Apply for an Adjudicator’s Order under section 140 of the Strata and Community Schemes – NCAT (NSW Civil Administrative Tribunal) or other similar Tribunals in other states.

Jan Browne
Bridge Strata
E: [email protected]
P: 02 6109 7700

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

Question: Our apartment is having rising damp repairs carried out. Are we required to contribute to the cost to repair and maintain common property?

I am an owner of a unit in a strata building. There are approximately 60 units in the building of which 2 units are on ground level.

These 2 units are affected by rising damp. The cause of the rising damp has been determined by 2 independent structural engineers to have been caused by incorrect installation of damp causing. The build is about 35 years old and in 2003 was converted from hotel accommodation to residential units.

The executive committee of the body corporate has accepted responsibility and wishes to complete some structural repairs to maintain common property.

The repairs that they will be conducting will be to apply a moister barrier to the inside walls of the unit to a height of about 1 meter. The quote obtain indicates that we have to vacate the unit for a period of 7-8 weeks while this work is undertaken.

The executive committee have advised that there will pay for this work to maintain common property and will repaint the part of the wall of the unit to the height of the repair.

However, they have advised that:

They will only re-render the wall to the high of the membrane and if the join is noticeable it will be at our cost to have the whole wall rendered if wish to have a smooth wall.

That they will only paint to the repair line and if the paint does not match (which it is unlikely to do) we will have to pay for the cost to have the rest of the wall painted.

That the cost of the temporary accommodation while the repair to the building is being undertaken will not be covered by them.

I feel that, as the work is being completed to correct a building defect (as described by the structural engineer), I expect the unit be returned in the same condition it is handed over in (smooth walls and an even paint job).

In regards to the cost of temporary accommodation, it is my understanding that all owners in the building are responsible for the cost of repairs to the building structure. As such I would think the temporary accommodation cost should also be covered, as the repair cannot be conducted unless we vacate our unit for the required period.

Answer: The Owners Corporation has a statutory obligation to repair and maintain common property

This query relates to the duty of the Owners Corporation 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” in accordance with Section 106 of the Strata Schemes Management Act 2015.

The Strata Schemes Management Act 2015 came into force on 30 November 2016. Prior to that, the duty was found at Section 62 of the Strata Schemes Management Act 1996.

Both the old and the new sections use the same language to express the duty to “properly maintain and keep in a state of good and serviceable repair the common property”.

In addition, both old and the new sections provide that: “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.”

When it comes to the sufficiency of the intended scope of work and whether it will suffice to meet the duty which the legislation imposes, one should focus in the key phrases “maintain and keep” in respect of the common property and “renew and replace” in respect of any fixtures or fittings comprised in the common property.

There is ample case law to support the proposition that the Owners Corporation cannot adopt a watered down or lesser scope of works if to do so would mean that the common property is not being properly maintained and kept in a state of good and serviceable repair. The Owners Corporation must replace like with like.

On the issue of paying for temporary accommodation, Section 106(5) provides: “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”.

This section was introduced with a view to overturning the decision in the matter of The Owners – Strata Plan No. 50276 v Thoo (2013) NSWCA 270. In that case, which dealt with Section 62 as it then was, the Court of Appeal decided that a breach of the duty to properly maintain and keep in a state of good and serviceable repair the common property did not give rise to claim for damages to a lot owner.

Section 106(5) puts the entitlement of an owner to seek damages for any loss suffered due to a breach of the duty on a statutory footing and opens the door for claims in respect of damage to personal property, loss of rental and, of course, the cost of alternative accommodation.

However, based on the actual wording of the section, there may be some room for debate in cases where the Owners Corporation is taking steps to comply with the Act. The section says an owner can recover a loss suffered as a result of the owners corporation failing to comply with its duty. Even though it would seem to lead to a somewhat absurd outcome, in this case, the section does not say you can recover loss suffered as a result of the Owners Corporation undertaking works to comply with the duty imposed.

Pierrette Khoury
Khoury Lawyers
E: [email protected]
P: 0415 459 486

Question: Some common walls in our building have cracks. What procedure should our Executive Committee follow to repair these common wall cracks?

We have a number of units where there are small common wall cracks (not all) apparently due to the building settling.

The Strata rules indicate that common walls are a Body Corporate responsibility – The Executive Committee have indicated that they will pay for the remedial work required for one of the owners who has claimed repair work.

Should the Executive Committee now notify all owners of this situation to allow them to have remedial work done if required? – What about owners who have already had work done can they claim retrospectively?

What is the Executive Committee responsibility if it does or does not notify all owners?

Answer: In the interest of accountability it’s important that the Executive Committee alerts all people on the property of potential work.

In the interest of accountability, it’s important that the Executive Committee alerts all people on the property of potential work. This is so that everyone knows exactly what’s going on the property and no one makes a fuss, later on, saying that they weren’t informed etc.

Other owners can only claim money back if any work done to the walls was done out of necessity, not only if they had aesthetic changes. Ideally, owners should only be allowed to make changes to common property with the permission of the Body Corporate.

Basically, if the problem is on common property then it is the Body Corporate’s responsibility and the Executive Committee should notify everyone. If the Executive Committee doesn’t do this and a problem occurs later down the track, the Body Corporate will be held liable for failing to go through all the reasonably practicable steps to mitigate risk, especially when they know that risk may be present.

Not knowing the age of the building in question below I have given a couple of examples of how settling can occur. Depending on the site preparation and the type of soil e.g. clay, stability could continue to be affected for several years after that. Cracking defects could fall into two categories, category 1 defect usually means:

Allow water penetration into a building

Adversely affect the health and/or safety of the occupants

Adversely affect the structural adequacy of the building

Adversely affect the serviceability, performance, or functional use of the building

Examples:

Leaks in roofs, showers, doors, windows, walls

Faulty or inadequate flashing

Footing movement – subsidence or settlement

Fretting or spalling masonry

Extensive cracking or distortion of wall or ceiling beyond normal frame settlement, shrinkage or thermal movement

Extensive cracking or dislodgment of floor or wall tiles

Defective, incomplete or inadequate termite protection methods

Inadequate provision for discharge of roof water

Incorrect or inadequate site drainage

Category 2 defects generally result from a failure of the contractor to meet reasonable standards of construction and finish or is a kind which commonly occurs during the “settling in” period of a new building.

Examples:

Sticking doors or windows

Cracked plasterboard joints, cornice joints

Poor finish detail

Peter Berney
National Business Development Manager
Solutions in Engineering
E: [email protected]
P: 1300 136 036

This post on appears in Strata News #126.

Question: A lot owner’s internal walls have non-structural common wall cracks from slight building settlement. Where does the responsibility of owners corporation fall to repair the walls? Are they responsible at all?

We have a unit owner who has reported common wall cracks in their walls from slight building settlement. It has been determined that these cracks are not a structural issue but limited to their apartment’s internal cement render.

As all walls are common property I assume that the cost of their cosmetic repair is our body corporate’s responsibility. It is apparent that once the common wall cracks are filled and sandpapered flat, the walls will require repainting. All costs associated with painting internal walls are, I understand, to be the sole responsibility of the lot owner.

Can our responsibility’s limits be confirmed so that the unit owner appreciates the bounds of the responsibility of owners corporation for repairs?

Answer: I would suggest the owners corporation take no further action.

If the cracking has been assessed as being of cosmetic / minor nature by a professional you trust, I would suggest the owners corporation take no further action. If the owner is concerned with the common wall cracks and how it looks, they can simply patch and paint the wall at their cost.

Minor cracking is very normal in apartments. The NSW Fair Trading guide to standards and tolerance is a good starting point can be found here.

Rod Smith
The Strata Collective
E: [email protected]
p: 02 9879 3547

This article is for reference purposes only and is not intended to be a comprehensive review of the developments in the law and practice or to cover all aspect of the subject matter. It does not constitute legal or other advice and should not be relied upon this way. Readers should take legal or other advice before applying the information containing in this publication.

This post appears in Strata News #185.

Question: Is it possible to access a unit if the owner has not granted permission but the tenant has? This is for the sake of a dye test and roofing repairs.

Answer: The occupier needs to give his consent, therefore, the committee may enter the lot because it is the occupier’s consent that is determinative.

The access provision of the Strata Schemes Management Act, 2015 (NSW) are drafted in terms of the “occupier” giving access.

The definition of “occupier” of a lot means a person in lawful occupation of the lot. Therefore, in our view, the occupier may be the owner-occupier or tenant, so, in your case, the occupier needs to give his consent, therefore, the committee may enter the lot because it is the occupier’s consent that is determinative. Further, the Owner must not “obstruct” or “hinder” the owners corporation and such obstruction or hindrance attracts penalties.

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

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.

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.

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

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.

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

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: [email protected]
P: 02 9281 6440

This post appears in Strata News #431.

Question: Our strata is trying to charge us for the repair of the balcony. Is this part of the common property? We feel bullied and are not sure how to proceed.

We are two senior sisters who own a unit. We have bought it with an enclosed balcony. In our small strata scheme, approximately half of the balconies are enclosed. We all have the Council approval for these enclosed balconies.

For the last few years, there has been a lot of arguing about the bad, unsafe state of most of the balconies, not only those enclosed.

Two enclosed balconies (whose owners are on the strata committee) blew away in a storm and the Strata insurance replaced them.

Now our strata want to pass a bylaw saying that all the balconies that need replacement have to be repaired. Strata will pay for all of the open balconies and the owners of the enclosed balconies must pay for theirs, approximately $25,000 each!

Do we have to vote and sign for this bylaw as we feel it is unfair!

We had paid for our enclosed balcony after receiving approval from Council to enclose it. There is no existing bylaw saying that these enclosed balconies are not part of our strata!

Strata want to replace the balconies, as they did not do ongoing maintenance to the building previously. So if they are going to demolish the open balcony automatically, strata will demolish our enclosed balcony, so Strata has to replace it.

The two enclosed balconies damaged by a storm were replaced by the Strata insurance, so Strata is responsible for the enclosed balconies!

We are being bullied by the Strata manager, some Body Corporate members (especially the ones who had their balconies replaced by insurance) and even other owners who have open balconies! Please, where do we stand? We are very stressed, especially at our age. Please advise us on this very complex matter.

Answer: Section 106 of the Strata Schemes Management Act 2015 defines quite clearly the Owners Corporation’s responsibility to repair and maintain common property.

This topic throws up a couple of curve balls and reminds me of a legal precedent that has been set on a similar matter.

Issue 1 – Proper Approval/Enduring Rights for the Alteration

The first issue that arises is, though the sisters and others who have enclosed balconies have Council Approval, do they have the proper consent of the Owners Corporation for enclosing the balconies?

In NSW under the previous and current Acts, to enclose a balcony an Owner would need to seek the consent of the owners corporation. This may have been done previously simply by the written consent of the Executive Committee but should have been done at the time by a Special Resolution and Exclusive Use by-law.

Without the Exclusive Use by-law having been passed and registered on title, the owner may not have enduring rights to keep the structure enclosing the balcony. Further, the By-law would define who is responsible for ongoing maintenance of the enclosure and the common property that it is attached to and without a By-law being passed and registered the responsibility for ongoing maintenance falls on the Owners Corporation.

It would be prudent for the owners of the lots with enclosed balconies to seek the By-law to permit the installation of the structure to enclose the balconies, and to provide for the ongoing maintenance of the enclosure that they installed, and the attachment to the common property affected by the installation. This by-law could be passed and registered with somewhat a retrospective approval. This by-law is of benefit to owners with the enclosure and the Owners Corporation.

Without the By-law being passed and registered, it is possible that with a “changing of the guard” of the owners corporation/strata committee, an owner or even the Owners Corporation could seek an order of NCAT to seek that the enclosures be removed. Based on past precedent, they may be successful in obtaining this order, but the Owners Corporation may end up paying for the removal and make good of common property.

Issue 2 – Works to the Balconies

It would be good to clarify what works are required to the balconies. For example, is it that the original floor/structure of the balcony needs replacing, the balustrade needs repair or replacement, or the balcony door/wall/window structure that is now needing work? Also, what was the date of registration of the Strata Plan? If the strata plan was registered prior to 1 July 1974, the lot owners are responsible for the balcony door/wall/window structure separating the balcony from the rest of the apartment.

Section 106 of the Strata Schemes Management Act 2015 defines quite clearly the Owners Corporation’s responsibility to repair and maintain common property. If the works relate to the balcony slab/floor or the balustrades, it is clear that the Owners Corporation is responsible for these works whether or not the balconies are enclosed and especially as no By-law has previously been passed. Further to this, it could be argued that in doing the works to the balconies, given the current position where there is no By-law in place, the Owners Corporation may have an obligation to reinstate the enclosure of the balcony fitted by a number of lot owners.

If the Owners Corporation were to seek to determine that some balconies were not the Owners Corporation’s responsibility to repair and maintain, there would need to be a Special Resolution passed at a General Meeting to determine this and most importantly they would need to resolve.

“(b) 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.”

Issue 3 – Insurance Obligations

The Owners Corporation has an obligation to insure Fixtures and Fittings, and ordinarily, this will be included in a Strata Insurance policy. Section 161 of the Act covers the details clearly as to what parts of the building are to be covered by a damage policy. But this in no way defines who has responsibility for ongoing repair and maintenance. So it is not unusual that the Owners Corporation’s insurance policy has responded to the previous storm damage claim.

Best Outcome for All

Given all of the above, it would be best for the Owners Corporation to tidy up their act and work cohesively as a community. The best outcome will be for the Owners Corporation to accept their ongoing responsibility for the maintenance of the common property components of the balconies, and that the owners with enclosed balconies obtain and agree to the wording, passing and registration of the Exclusive Use By-law, giving them the rights to keep the balcony enclosure and responsibility to maintain their structure.

Happy to discuss this response further and understand it is lengthy.

Luke Derwent
Wellman Strata
E: [email protected]
P: 02 8065 6575

This post appears in Strata News #150

Question: Who pays for the repair of my balcony and what are my rights regarding the design? Should the unsafe balcony be replaced with something similar?

I am in an owner in a block of four units in NSW. Both mine and one of my neighbour’s balconies are structurally unsound and the problems look to go back to the original builder. It was a while ago and all four owners are going to review an insurance claim separately to the action of fixing both balconies.

Right now the other two owners (without balconies) do not want to pay for the replacement of the existing balconies and want us to replace our balconies with either Juliette balconies or windows as its cheaper and less disruptive to them.

Both myself and the other neighbour who’s balcony is impacted want to replace the balconies to the original like for like state. We are currently deadlocked and the units have tenants, so safety is one issue.

The question I have is – can my neighbours actually push for this under the law? I am not asking for more than previous, just to replace the balcony to the existing situation and I also don’t want to lose any value off my apartment.

What is your view under the strata guidelines on the repair of the balconies and what happens also when the vote is 50/50 on this topic?

Answer: If balconies form part of the common property, their maintenance and repair is the responsibility of the owners corporation.

Our reply is based on the assumption that the balconies are on title to the lots, but form part of the common property.

The Owners Corporation has a responsibility under Section 62 to repair and maintain common property to ensure it is in safe and working order; this is regardless of whether owners have a balcony or not. Generally, the balcony structural elements are common property and as such would require repair by the Owners Corporation.

The balconies, if deemed to be structurally unsound, would in our view require the Owners Corporation to immediately take steps to ensure the subject areas are safe and the replacement or repair of the balconies should be undertaken with urgency.

To change the current set up of balconies to either a Juliette balcony or windows would require a special resolution of the Owners Corporation (in addition to DA consent from council), as the subject changes will change the overall appearance of the building which requires a special resolution.

Therefore you and the other unit will need to have 25% or more of the total unit entitlement to vote against the special resolution which will prevent the change going through.

The general replacement of the same set up will require an ordinary resolution by the Owners Corporation.

Leanne Habib
Premium Strata
P: 02 9281 6440
E: [email protected]

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

This post appears in Strata News #101.

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

Can you relate to this situation? Is something similar happening at your scheme? What have you tried to solve garden maintenance at your apartment building? Please let us know below in the comment section.

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Comments

CJ says

March 31, 2021 at 6:55 am

Interesting question and answer that was provided regarding who is responsible for repairing a pipe that passes through common property?

What I like to know in an actual situation; who is responsible where a Lot Owner decides to undertake a Do-It-Yourself (D-I-Y) kitchen renovation and during this kitchen renovation the hot water pipe that passes through the common property cavity which this hot water pipe exclusively services the Lot Owners who are undertaking a D-I-Y kitchen renovation, bursts and causes damage to the other Lot Owner’s ceiling that resides directly below?

The Lot Owners who are undertaking this D-I-Y project did not provide a security bond nor a certificate of currency nor provide the Owners Corporation (OC) with their credentials/qualifications nor was there a special by-law for this kitchen renovation shown to the OC’s to view and vote on their proposed D-I-Y kitchen renovation.

The OC finished up paying a few thousand dollars for this debacle.

So, who is responsible for the damage caused?

Should these D-I-Y Lot Owners have provided those additional documents including the amount of the security deposit bond? And in which account would this Security Bond be held in?

Should a Special By-Law for kitchen renovation been provided by these Lot Owners for the OC to vote on?

Can the Owners Corporation formally request the D-I-Y Lot Owners to reimburse for the cost of repairs?

Reply
- Liza Admin says
  
  April 20, 2021 at 3:08 pm
  
  Hi CJ
  
  Pierrette Khoury, Khoury Lawyers has responded to your comment on this article:
  
  NSW: Q&A Strata approval for renovations – What is the process?
  
  Reply
Jason Robards says

January 20, 2021 at 3:18 pm

In regards to the 360K needing to be raised by a strata of 6 lots. I can totally understand why people would refuse to do that at 60K per lot.
What I would do is seek a EGM to be held or table a discusiion if soon around an AGM to seek a potential outcome.
I feel a better way than handing over writes of redress to others is seek a strata loan to be paid back of 15-20 yrs to lessen the blow to all lot owners including yourself.
Also in future seeking a better and structured maintainance and capital works plan with timeframes set for repairs.
eg as per below spreadsheet I did myself as treasurer of a 6 unit lot in newcastle and owner of 1 unit.

Jason
Proposed Capital Works FUND Budget 2013-2038 (25YRS)
Item Replacement Cost Lifespan YRS YRLY Allocation Due
1 Irrigation System 1320 10 132 2023
2 Exterior Painting 23000 10 2300 2023
3 Landscaping 390 6 65 2026
4 Pumps and Motors 10905 15 727 2028
5 Landscaping 390 6 65 2032
6 Water Tank 5000 20 250 2033
7 Intercom 2640 20 132 2033
8 Roof 50000 20 2500 2033
9 Irrigation System 1320 10 132 2033
10 Exterior Painting 23000 10 2300 2033
11 Gutters / Down-pipes 5300 25 212 2038
12 Landscaping 390 6 132 2038
13 Fencing 2625 25 105 2038

Reply
- HD says
  
  March 22, 2021 at 4:28 pm
  
  I have given alternatives such as a strata loan and that was rejected as well. The fact is that they have kept the levies very low for about 30 years and have not had a capital works plan at all! – even though it’s the law! I got that rectified and its very clear that levies needed to double and 60K still needs to be spent upgrading what should have been done 10 years ago. This weekend (and for the fourth time) I spent all day mopping up water ingress that frankly was like a “water feature” in my sunroom. My sympathy does not extend to owners who are self confessed mortgage free and living in a 1.6 million dollar apartment cannot “find” 60k to fix known issue that if ignored will result in even more expense if not addressed.
  
  Reply
N/A says

January 19, 2021 at 9:44 am

Thanks very informative but it does not mean anything if we do not have Fair Trading helping the Home owners in a building.
Could you please answer the following question: 2017 I needed the roof to be attended because the tenant on the other side of the building and me were having problems with water penetration and it was causing mould on our Lots in a building of 4 Lots..
The first NCAT member asked the strata manager who attended the meeting for expert advise. The Strata Manager failed to inform the Strata Manager that the tenant had complained to them about his daughter’s bedroom having mould.
We had AGM meeting and again the Strata Manager failed to inform two new owners or me about the tenant having problems. with mould. In the Strata Manager’s expert report I was the person who came as rude …
What does happen when the Strata Manager does not disclose the truth to the member on a NCAT hearing?

Reply
stephen says

September 4, 2020 at 9:37 am

Our committee is aware of safety hazards and incidences have occurred but they refuse to spend money to fix these items. What can be done when the committee won’t spend on necessary maintenance?

Well some of that reply from Rod is quite entertaining.
“The first you should do would be write to the strata manager ..”

I find that a little strange because the agent is subordinate to the principal and the SC although an assistant to the OC (2EBR case) is still a higher authority than an agent.
That point has really got lost over the last 10 years as it seems common place for people to think agents run strata plans when in fact they are called an agent for a reason; because there is a principal and the principal is who is actually in charge.
Granted the agent may have been delegated the authority of the SC in the agreement and the SC may be window dressing purely to satisfy some of the sections of the Act but even in those cases it is only when the SC through inaction abrogate their power that agents wield that power and often in a non compliant way.

” If this gets voted down, apply to Fair Trading New South Wales for an application to mediation which now costs nothing. Include the history, the work health and safety report, the quotes, the AGM minutes the AGM agenda and what was discussed and what you want to achieve, which is: get this item fixed. I would be surprised if that wasn’t successful.”

What does successful mean here? It is mediation, a voluntary resolution mechanism that appears to be an avenue to disenfranchise owners and circumvent the meeting procedures and voting barriers in the Act if my experience is any gauge.

Success amounts to an agreement and the enforce-ability of that agreement goes to the heart of the argument that mediation being an avenue to disenfranchise owners and circumvent the meeting procedures and voting barriers in the Act. Some of the case law suggests you can completely disenfranchise the owners and circumvent the Act through mediation; personally I find those decisions to be bollocks but they exist so we have to play the hand we are deal by these clowns.

Never ever attend mediation, there is something chronically wrong with the way some NCAT members view agreements. Even though in theory (s 223 SSM Act) an agreement is not admissible to the Tribunal some members do not care for that section and happily look at an agreement in their considering a matter.

If you do attend never ever, under any circumstances, sign any agreement. That is just too dangerous given the chocolate wheel nature of NCAT.

A trip hazard would be a s 106 matter and under s 106 (5) you are potentially going to get sued for foreseeable losses. It is hazard you know about, hazards you know about mean an incident is foreseeable and failing to address it is just not on or your ride the ‘risk roundabout’ and hope nobody falls off.

Too many softies in the industry at the moment with empty, nice guy, poor solutions.
What to do?
Go to NCAT, you will need to apply for mediation first, and seek to have the committee removed for failing to follow the Act – section 238 2(a). Claim the OC (i.e the SC members as a collective) failed the mandatory obligation to maintain and repair and by doing so exposed all owners to potential litigation for foreseeable losses under s 106 (5) in the event the hazard caused harm or loss. Any SC member doing that is not fit to hold a position and does not act in good faith.
You really do not want that type of person on your committee.

Play hard ball and seek an ancillary order that the OC immediately remedy the hazard.

A little aggressive; yes. But much better than being the next Seiwa.

Reply
Bart says

August 19, 2020 at 11:57 am

Owners of our building of 20 lots have been asked to repair the two rooftop-terrace areas including new membranes and are asked to pay a special levy of about $300,000. Hitherto our owners corporation has paid for any repairs to these areas but I enquired recently to the NSW Land Registry Services and they advised me that both rooftop-terrace areas form part of the two rooftop-terrace lots and their owners were responsible for maintenance and repairs to the rooftop terrace areas up to a height of 2.5 metres above the concrete floor and anything fixed to the concrete floor e.g. tiling. Should these two unit owners contribute to the repairs. to the areas that they are responsible for?

Reply
Petra Schwarz says

July 10, 2019 at 8:33 am

I am in a Strata complex of three, a duplex and a stand alone (mine). We have a very small lawn area of slow growing grass and a border of small bush imbedded in mulsh. Recently, we changed Strata managers. The previous never responded to the request of front yard maintenance.

We all occupied the premises in July 2017. In December 17 I organised the lawn cutting company from the neiighbour to take care of our small garden bed, about 10 sqm at a rate of $20 per service. I paid and was reimbursed. However, from April 2018 I went overseas for an extended time and asked the Strata manager to pay the company on invoice directly.

One service was carried out and only paid in April 2019 after my numerous request to the Strata manager.

In December 2018 I asked a neighbour to cut the grass in exchange for a six-pack and thereafter a relative of one other unit cut the grass.

In May 2019 we changed Strata mangers, chosen by the parties sharing the duplex, which seem to have formed a self-proclaimed committee. We don’t have selected a committee officially, regarding it not necessary.

Communication among the owners is very poor. One owner lives in Sydney and has a tenant in his unit.

Our front yard is now overgrown with weeds, and the slow growing grass overgrown with fast growing clover.

I was not in agreement with the chosen Strata manager and had been in contact with another local one, which was rejected by the other two parties. This manager would have arranged a meeting at our premises at a convenient time for everybody. In the contract of the chosen manager it states that he will never come to our property.

The untidy front yard devalues our otherwise pleasant structures.

What is the solution? We will have an AGM in August.

Reply
- Nikki Jovicic says
  
  July 11, 2019 at 3:49 pm
  
  Hi Petra
  
  We’ve received the following from Karina Heinz:
  
  It is best practice to have a committee and given the scheme is only 3 lots, it is probably ideal to have a rep from each lot on it. If someone doesn’t wish to that is fine too.
  
  The bottom line is, there needs to be a clear manner of issuing instructions to the manager and the committee is the party to do this, not individuals.
  
  This info on Fair Trading’s website is a good summary and guide: Strata committees
  
  Reply

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Question: Is it the responsibility of the owners corporation to service and maintain the grease trap?

Answer: Refer back to the SMS and check the schedules

Question: We own a villa in a two lot strata scheme that is in need of repainting. The owners of the other lot do not want to pay for the property to be repainted.

Answer: You are within your rights to make an application to NCAT that the Owners Corporation complies with its statutory duties ie re-paint the exterior of the building

Question: Can the owners corporation park a common property maintenance issue forever, quoting lack of funds?

Answer: Definitely not.

Question: Who is responsible for a broken window in a strata unit?

Answer: Generally, if a tenant breaks the glass either the tenant is liable to replace it (if the tenant caused the breakage) or the Landlord’s insurance should cover it.

Question: In our 20 year old building, the original water membrane in many unit’s bathrooms are failing. Our Strata Manager insists it is the responsibility of the owners corporation. Is this correct?

Answer: This is a matter that the Owners Corporation is likely responsible for.

Question: Is the owners corporation required to carry out necessary maintenance to common property within a legislated timeframe? In this case, for mould.

Answer: Failing to exercise a function is defined in section 232 as not acting for a period of two months.

Question: We’ve found out the marble tile installed in our apartment was unapproved by the owners corporation and they are asking us to pull it up. Isn’t the tile part of the common property? Shouldn’t the OC replace the flooring at their cost?

Answer: You might want to review the strata plan.

Question: I had an issue with mould in my bathroom. As the mould was due to a leak in the common property wall, should strata pay for the repairs?

Answer: If the bath was replaced/re-installed as part of a subsequent renovation, the owner carrying out those renovations would have assumed responsibility for the renovations pursuant to a by-law.

Orders relating to alterations and repairs to common property and other property

Question: My garage is in immediate need of repair to the point of causing damage to my car. I have requested maintenance but nothing is done. What can I do?

Answer: It is the strict duty of the Owners Corporation to repair and maintain the common property

Question: Does neglected maintenance within a lot become the owner’s responsibility after a certain period?

Answer: This will depend on the nature of the work required to be undertaken.

Question: We recently had a Special Levy passed to replace Balustrades on balconies in our Strata Block. We own ground floor units and therefore do not have balconies let alone balustrades. Should we be exempt from this Levy?

Question: Our apartment block has a car stacker. As our apartment doesn’t have a car space, why we are levied for maintenance etc when this common property is of no benefit to us?

Question: The hallway connecting several units and the lift has had a very foul odour for quite some time. What can I do to get strata to investigate the cause and rectify the problem?

Answer: Ask the strata manager when the next service or maintenance of the elevator is. Meet the tech and ask for the elevator pit to be checked.

Question: Who is responsible for repairing a pipe that passes through common property, but only services one unit?

Answer: If the pipe only serves that lot and is not within any common property wall then that would fall on the individual owner as his or her responsibility. However, if the pipe is within a common property wall it would fall on the Owners Corporation as its responsibility to maintain and repair.

Question: In NSW, do owners corporations need to hold a meeting and pass a resolution to replace something that existed on the common property and was removed to carry out repairs?

Answer: The strata committee can approve repair and maintenance of the common property.

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?

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.

Does the owners corporation have to pay for the bathroom and kitchen?

Could the owner legally apply for loss of rent?

Can this damage be claimed on strata insurance?

Can the owners corporation limit their liability?

Question: Our sinking fund has run out of money and we need a lot of repairs and maintenance done to common property.

Answer: The owners corporation needs to be made aware of its strict liability to repair and maintain the common property and that failure to do so exposes it to applications to NCAT to force them to comply.

Question: My balcony doors & shutters were damaged in strong winds 7 months ago, but nothing has been done. Is this considered acceptable to wait for an Insurance company before any repairs are carried out when it could be dangerous?

Answer: The delay is quite unreasonable, however, you have an obligation to mitigate your losses.

Question: We had a leak in our ceiling and now mould is growing on the water damaged parts. We reported it to our strata manager months ago, but nothing has been done to fix the problem. What are my options as an owner?

Answer: For issues relating to maintenance of “lot owners” property, legalisation does not provide the same obligation on maintenance it does for the owners corporation.

Question: Due to recent storm events there was water ingress from common areas into my apartment, damaging floorboards. What is the process to fix the damage?

Answer: In the case of water damage claims, generally insurers will require the cause of the leak to be repaired before repairs commence for consequential water damage.

Question: Can the owners corporation fix my neighbour’s leaking verandah?

Answer: While the exact cause of the balcony leakage is unknown, this is likely an issue with the common property.

Who has responsibility for the ongoing maintenance of a renovated balcony/verandah?

Consequences of the owners corporation not fulfilling their duty to maintain and repair common property

Next steps

Question: Water has been leaking from our front yard into the car park below for a few years without resolution. Must I use the strata’s expensive contractor for the basement waterproofing? How do I get the committee to act?

Answer: You may get another quote from another contractor, however, make sure that the quote covers exactly the same scope of work so that any comparison in cost is viable.

Question: What steps do we take to organise a leaky roof repair? What if some owners refuse to pay?

Answer: The roof repairs will be common property and a repair that jointly the Executive Committee and the appointed Strata Manager would arrange for its repair.

106 Duty of owners corporation to maintain and repair property

Question: Why am I required to fund my neighbour’s leaky roof repair?

Answer: If all lots are under one strata scheme, all owners of that strata scheme will be responsible to contribute to the common property repairs.

Question: Who is responsible for contractor’s added costs when site access is deliberately limited?

Answer: The owners corporation could seek an order for access ongoing. Breaches of this can lead to penalties.

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

Question: In our strata scheme, there are 25 unit walk ups and 12 units in the tower. The tower has a lift, only servicing lot owners who live in that building. Do all lot owners have to pay for maintenance of the lift or is it solely the responsibility of those units that have use of it?

Answer: You should refer the question to your strata manager, however – the strata plan or by-laws may contain information which isolates the costs of the lift upkeep only to those owners that have the benefit of it.

Question: A resident has repeatedly requested the committee repair a known trip hazard that hasn’t been fixed for years. What are the insurance implications around known hazards that the committee will not address?

Answer: You need to first to receive confirmation from a qualified person that the trip hazard exists.

Question: Our committee is aware of safety hazards and incidences have occurred but they refuse to spend money to fix these items. What can be done when the committee won’t spend on necessary maintenance?

Answer: The strata committee needs to turn their attention towards the idea of ‘lets you make best use of this money. Let’s improve our buildings.’

Question: In our commercial unit, there have been leaks for many years and we can’t seem to get them fixed. What action can I take to get repairs carried out as the condition of the building is ruining our office and some of our stock?

Answer: I would have a look at the agreement with the owner of the building including any terms and conditions entered into.

Question: Is it allowable/acceptable to get in touch directly with strata manager for unit repairs to common property, rather than go through the executive committee?

Answer: Yes, because in all likelihood, before the strata manager issues a work order for the repairs (subject to the extent of repairs), the strata manager will seek approval from the strata committee to determine if the matter is a proper expense of the owners corporation.

Question: The garden directly outside my apartment never gets maintained as I’m the only one affected by it. How can I ensure garden maintenance is scheduled and regular?

Answer: The scheme has a strict obligation to maintain all aspects of common property. Follow our 4 steps to find out how to make sure this is regularly scheduled.

Question: Our Owners Corporation collects levies but there is a failure to maintain and repair common property. What can I do to get things back on track?

Answer: You should put the Strata Managing Agent on notice that the Owners Corporation is in breach of its duties.

Question: Should the Strata Manager Advise the Owners Corporation to Upkeep and Repair Common Property?

Answer: The role of the Strata Managing Agent is to represent the Owners Corporation

Question: Our apartment is having rising damp repairs carried out. Are we required to contribute to the cost to repair and maintain common property?

Answer: The Owners Corporation has a statutory obligation to repair and maintain common property

Question: Some common walls in our building have cracks. What procedure should our Executive Committee follow to repair these common wall cracks?

Answer: In the interest of accountability it’s important that the Executive Committee alerts all people on the property of potential work.

Question: A lot owner’s internal walls have non-structural common wall cracks from slight building settlement. Where does the responsibility of owners corporation fall to repair the walls? Are they responsible at all?