NSW: Q&A Duty to Maintain and Repair Common Property

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This article is about the owners corporation’s obligation to repair and maintain common property.

Table of Contents:

• QUESTION: Our sinking fund has run out of money and we need a lot of repairs and maintenance done to common property.
• 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?
• 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?
• 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?
• QUESTION: Can the owners corporation fix my neighbour’s leaking verandah?
• QUESTION: What steps do we take to organise a leaky roof repair? What if some owners refuse to pay?
• QUESTION: Why am I required to fund my neighbour’s leaky roof repair?
• QUESTION: Who is responsible for contractor’s added costs when site access is deliberately limited?
• 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?
• 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?
• 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?
• 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?
• 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?
• 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?
• 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?
• QUESTION: Should the Strata Manager Advise the Owners Corporation to Upkeep and Repair Common Property?
• QUESTION: Our apartment is having rising damp repairs carried out. Are we required to contribute to the cost 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?
• 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?

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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 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 #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

1. 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.
2. 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.
3. 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: 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

1. An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation.
2. An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation.
3. This section does not apply to a particular item of property if the owners corporation determines by special resolution that:

1. it is inappropriate to maintain, renew, replace or repair the property, and
2. its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.

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

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

4. In a case that is not an emergency, the owners corporation may enter any part of the parcel for those purposes with the consent of any occupier of that part of the parcel or, if the occupier does not consent, in accordance with an order of the Tribunal under this Division.
5. A person must not obstruct or hinder an owners corporation in the exercise of its functions under this section. (Maximum penalty—5 penalty units).
6. An owners corporation is liable for any damage to a lot or any of its contents caused by or arising out of the carrying out of any work, or the exercise of a power of entry, referred to in this section unless the damage arose because the owners corporation was obstructed or hindered.

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:

1. when you are discussing the budget, get the cost allocated in the fundraising
2. 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
3. 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.
4. 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:

1. Apply for Mediation through Fair Trading

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


2. 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:

1. Allow water penetration into a building
2. Adversely affect the health and/or safety of the occupants
3. Adversely affect the structural adequacy of the building
4. 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 Office of 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.

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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Read next:

• NSW: Q&A Why Are Strata Levies So High?
• NSW: Q&A Basement waterproofing – No Support from Committee or Strata Manager
• NSW: Q&A Owners Corporation Committee Decisions

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