Question: Who is responsible for notifying owners of maintenance issues and repairs in their investment lot, and what are owner’s options regarding lack of information and unapproved work?
I live in QLD and have an investment unit in Sydney.
In early 2024, owners paid a special levy for painting, gardening issues, water leaks, etc. After several requests for a report on how this money was spent, I received a small Word document with very little information. The report mentioned that my unit was one of the units experiencing water leaks. I’ve never received formal notification from the real estate agent, body corporate or strata manager.
My contact person who works for the real estate and has a position on the body corporate said they had verbally advised me of the water leak. I do recall being advised of a big storm about 18 months ago. I was advised of a possible leak but nothing further. Now I find out that someone has put a hole in my ceiling under a cement slab with a tray to monitor the leak.Who is responsible for letting me know about these problems? Can I submit something regarding this issue at the next AGM in May 2025, or should I seek legal advice? What are my options?
Answer: Owners are entitled to transparency regarding expenditure, and the strata committee or strata manager should provide a detailed financial breakdown of how the funds were allocated.
Special levies and owner communication: Understanding your rights and next steps.
Your concerns highlight two key strata issues:
- the proper allocation of special levy funds, and
- the communication of property maintenance issues to owners.
Below, we address your concerns based on NSW strata laws and best practices.
How should special levy funds be spent?
Under Section 81(4) of the Strata Schemes Management Act 2015 (NSW), an owners corporation can only levy contributions (including special levies) to cover anticipated expenses it cannot otherwise meet from its existing funds. The law mandates that these funds be used strictly for the specific purpose for which the levy was raised.
Additionally, case law has reinforced this principle, with NCAT and the courts ruling that an owners corporation cannot repurpose special levy funds without a new resolution. Owners are entitled to transparency regarding expenditure, and the strata committee or strata manager should provide a detailed financial breakdown of how the funds were allocated. If this information is not forthcoming, you have the right to inspect the owners corporation’s records under Section 182 of the SSMA 2015, which includes financial records related to levies and maintenance.
Should owners be notified about issues like leaks?
There is no explicit legal obligation under the Strata Schemes Management Act 2015 requiring the owners corporation or strata manager to notify an owner about maintenance issues inside their lot. However, best practice dictates that owners should be informed — especially when a leak is identified in their unit.
Typically, strata managers inform landlords through their managing agents (i.e., your real estate agent) as they handle tenant-related matters. If your real estate agent was advised of the issue but failed to relay the information, they may bear some responsibility. Given that repairs were made inside your unit (including the installation of a monitoring tray), it would have been reasonable to receive formal notice.
What are your next steps?
To address your concerns, consider taking the following steps:
- Contact the strata manager: Request a formal written breakdown of how the special levy was allocated, including details of repairs. If you believe the leak in your unit was not handled properly, ask for an update on any pending works.
- Review the strata records: Under Section 182, you may request to inspect records related to the special levy’s expenditure and the repair works carried out.
- Submit a motion for the AGM — or sooner:
- Under Schedule 1, Clause 4 of the SSMA 2015, if you submit a motion to the owners corporation, it must be included on the agenda of the next general meeting.
- It’s best to submit your motion as soon as possible since once the meeting notice is issued, no new motions can be added.
- A suitable motion could be:
“That the owners corporation provides a detailed written report to all owners outlining the expenditure of the special levy raised in early 2024, including a breakdown of costs associated with each category of repair.”
If the lack of notification about the leak has caused damage or additional costs, legal advice may be warranted to assess whether the owners corporation or managing agent has failed in their duty. However, your immediate priority should be obtaining clarity from the strata manager and ensuring better communication protocols are in place moving forward.
Tim Sara Sara Strata E: tim@sarastrata.com.au P: 04 8500 7960