NSW: Q&A Indemnity in Perpetuity – Installation of an Air Conditioning Unit

This Q&A about indemnity in perpetuity regarding the installation of an air conditioning unit in NSW has been answered by Jamie Welbourne, SMS Strata Management.

Question: When a lot owner is installing an air conditioning unit, can the Owners Corporation request indemnity against any damage caused to the building IN PERPETUITY?

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Can an Owners Corporation request that an owner indemnify the Owners Corporation against any damage caused to the building IN PERPETUITY in relation to the installation of an air conditioning unit that has been installed in compliance with the Strata bylaws?

Further, if such an indemnity is permissible would that indemnity pass on to a subsequent lot owner on the selling of the unit?

Answer: Yes, but this would require a by-law approved by special resolution and the written consent of the relevant owners.

Yes, but this would require a by-law approved by special resolution and the written consent of the relevant owners under the STRATA SCHEMES MANAGEMENT ACT 2015 – SECT 141.

I recommended you seek out a solicitor to write and register the by-law usually at the lot owners cost. It should be written into the by-law that the current and subsequent lot owner/s are responsible for the Air-conditioning unit. It also recommended it include:

• All works be carried out by a licensed and insured tradesperson/s
• Any damage caused to common property during the installation of the air-conditioning condenser unit will be rectified at the expense of the owner of the Lot
• The responsibility for the ongoing repairs, maintenance and replacement of the air-conditioning condenser unit remains that of the current and subsequent owner/s of the Lot
• It is the owner’s responsibility to obtain local Council approval for all works prior to work commencing and to supply a copy of any approval the owners corp, if applicable
• The air-conditioning condenser unit will always be kept in good, respectable order and repair
• The Owner will indemnify the Owners Corporation against any liability caused by the undertaking the Work
• Immediately upon completion of the Works, the Owner will restore all other parts of the common property affected by the Works as nearly as possible to the state in which they were immediately prior to the Works. The Owner will make good any damage to the common property caused as a result of the Works
• Where the owner/s of the Lot fail or neglect to carry out any condition referred to herein then the Owners Corporation or its agents, servants or contractors may carry out such condition and may enter upon any part of the parcel for that purpose at any reasonable time on notice given to any occupier or owner /s of any part of the parcel and may recover the costs of fulfilling such condition as a debt from the Owner/s.

I don’t see any future problems if the By-law has been written up by a solicitor, approved at a meeting by the Owners corporation and registered correctly.

This post appears in Strata News #256.

Jamie Welbourne
SMS Strata Management
P: 1800 351 078
E: jamieW@smstrata.com.au

Read next:

• NSW: Q&A Does Strata Maintain My Air Conditioning Unit?

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