NSW: Q&A Strata Dispute Resolution and NCAT Orders

These Q&As are about strata dispute resolution and the NSW Civil & Administrative Tribunal (NCAT).

Table of Contents:

• QUESTION: Is there any insurance cover a lot owner can take out to cover legal fees when the owners corporation fails to adhere to their legal obligations to maintain and repair common property?


• QUESTION: Can owners prevent the strata manager from representing the owners corporation for a mediation session run by Fair Trading?


• QUESTION: At NCAT, the member encouraged us to reach a mediated agreement. We reached an agreement, however, the unit owner is not adhering to what they agreed. How do we get the owner to honour the agreement?


• QUESTION: Is there a guideline on how to complete an application for NCAT? How do we determine which sections need to be applied under? For an application dealing with a notice to comply, do we need to identify which sections have been breached?


• QUESTION: A lot owner refuses to pay an order for costs as a result of a recent strata dispute resolution at NCAT. How do we enforce the order and recover the amount?


• QUESTION: During the strata dispute resolution process, if an Owners Corporation breaches court orders, what recourse does the owner have?

Question: Is there any insurance cover a lot owner can take out to cover legal fees when the owners corporation fails to adhere to their legal obligations to maintain and repair common property?

I am a lot owner in a strata scheme of 13 lots. I had to file an application with NCAT. The building insurance covered the legal costs for the owners corporation. As a lot owner, I had to pay all legal fees myself. This made the application process and multiple court hearings at NCAT impossible to afford.

The owners corporation did everything possible to drag the matter out, hoping I would give it up. Is there any insurance cover a lot owner can take out to cover legal fees when the owners corporation fails to adhere to their legal obligations to maintain and repair common property?

Answer: Legal expenses policies in the market provide cover for pursuing legal claims, but these policies are primarily designed for commercial businesses and may be cost-prohibitive.

An owners corporation insurance policy is designed to protect the primary interests of the owners corporation, but notwithstanding, it covers lot owners’ property in accordance with the act.

With this in mind, strata insurance does not cover claims made by lot owners against the owner’s corporation.

Legal expenses policies in the market provide cover for pursuing legal claims, but these policies are primarily designed for commercial businesses and may be cost-prohibitive.

NCAT is a jurisdiction where it is often assumed people self-represent and is less formal than other courts. If legal representation is cost prohibitive, self-representation may be a consideration depending on the type of claim made and how important the outcome is to you.

Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165

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. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in Strata News #663.

Question: Can owners prevent the strata manager from representing the owners corporation for a mediation session run by Fair Trading?

Without any consultation with the owners corporation, the office bearers of our strata committee appointed our strata manager as the main representative of the owners corporation. Most owners don’t have confidence in the strata manager and seriously question their impartiality. Can owners prevent the strata manager from representing the owners corporation for a mediation session run by Fair Trading?

Answer: Decisions of the owners corporation overrides that of the strata committee.

Yes, a strata managing agent may represent the owners corporation at mediation, and irrespective of whether this is expressly itemised/authorised under the Strata Management Agency Agreement (SMAA), we recommend that a motion is passed to delegate to the strata managing agent the duty and function to attend the mediation session on behalf of the owners corporation. This usually attracts Schedule B charges under a SMAA.

However, if owners have enough support, they can convene a general meeting to appoint their preferred representative because decisions of the owners corporation override that of the strata committee.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #652.

Question: At NCAT, the member encouraged us to reach a mediated agreement. We reached an agreement, however, the unit owner is not adhering to what they agreed. How do we get the owner to honour the agreement?

I am On the Strata committee. We went to NCAT and finally to the court to get an order against an owner in our complex.

The member encouraged us to reach a mediated agreement. He was reluctant to give an order. We reached agreement, however, the unit owner is not adhering to what they agreed and the owner now wants the Strata to do what we said we would do. What options do we have to get the owner to honour the mediated agreement?

Answer: The Tribunal may make orders to give effect to any agreement or arrangement arising out of a mediation session.

The Tribunal may make orders to give effect to any agreement or arrangement arising out of a mediation session including an order that gives effect to the terms of a written agreement signed during the mediation session by the parties to the mediation. You should now contact a strata lawyer to take the necessary steps to bring the matter before NCAT.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #601.

Question: Is there a guideline on how to complete an application for NCAT? How do we determine which sections need to be applied under? For an application dealing with a notice to comply, do we need to identify which sections have been breached?

Answer: You do need to identify the sections that have been breached, and you need to be able to prove the breach has occurred.

Even strata managers find that NCAT applications are sometimes tricky. You do need to identify the section. Both NCAT and Fair Trading have a helpline and should be able to assist.

You do need to identify the sections that have been breached, and you need to be able to prove the breach has occurred. The NCAT doesn’t care about things like “my opinion is this….” or “this happened….”, for example, if you think you’ve got mould, you need a mould report. You might be able to take some photos and say the mould needs to be removed, but you’re probably going to need to provide genuine evidence if you’re going to the NCAT. You need to think about what outcomes you want.

I’ll give you an example. Let’s say you’ve got water ingress from the ceiling into your apartment, and you’ve written to strata. Months have passed and you’ve now got mould. You would need to apply for an order under Section 106 to repair and maintain common property for the owners corporation to identify the cause of the water leak into your apartment, and to repair it. You need to have evidence, but you need to probably speak to Fair Trading about how you should fill in the application form because they’re not straightforward. If there is a significant amount of money involved, say $1000s of dollars or more, I would suggest that you make the investment and retain a lawyer, because the lawyer knows exactly what to do.

Rod Smith The Strata Collective E: rsmith@thestratacollective.com.au P: 02 9879 3547

This post appears in the August 2022 edition of The NSW Strata Magazine.

Question: A lot owner refuses to pay an order for costs as a result of a recent strata dispute resolution at NCAT. How do we enforce the order and recover the amount?

A lot owner took the Owners Corporation to NCAT challenging an exclusive use bylaw.

The application was dismissed, no appeal was forthcoming and the Owners Corporation was awarded a costs order in its favour. The lot owner refuses to pay.

The Owners Corporation has entered the amount as a debt against the Lot but what remedies do we have to enforce the costs order and the process involved in doing so?

Answer: To recover costs ordered to be paid by the Tribunal the amount needs to be certified by a Registrar.

You will likely need to engage the services of a lawyer as under the Civil And Administrative Tribunal Act, to recover costs ordered to be paid by the Tribunal, the amount needs to be certified by a Registrar and then filed in a court of competent jurisdiction which in turn operates as a judgement debt against the offending lot owner.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #256

Question: During the strata dispute resolution process, if an Owners Corporation breaches court orders, what recourse does the owner have?

During the strata dispute resolution process, if an Owners Corporation breaches court orders, what recourse does the owner have? As a lot owner, if I go back to NCAT it will cost me approximately $5k in legal fees.

NCAT will fine the Strata Plan approx. $5k and they get to keep the money but that does not solve my problem if the Owners Corporation still does not comply with the orders.

How can I get the orders fulfilled?

Answer: The failure by the owners corporation to comply with the NCAT Orders could be the basis upon which to seek the compulsory appointment of a strata manager.

The failure by the owners corporation to comply with the NCAT Orders could be the basis upon which to seek the compulsory appointment of a strata manager.

If successful, then there would be no strata meetings or voting for a period of usually 12 months and the compulsory agent makes all the decisions on behalf of the owners corporation and strata committee. It would then be the compulsory agent’s role to implement the Orders of NCAT.

Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440

This post appears in Strata News #228.

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Read next:

• NSW: A Strata Management Statement

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