Question: A previous lot owner in our small scheme carried out unapproved works which have now been discovered to have caused damage to common property. How do we proceed?
We are a small complex of 7 townhouses and villas. One of the previous owners conducted renovations without strata approval and now it appears this has resulted in structural damage to the lot. The subsequent owner (who has been in residence for approximately 2 years), has noticed these structural damages and has asked the OC to share the cost of fixing. It’s not a small amount.
I was wondering where the liability and cost falls.
The previous owner who conducted the unapproved renovation was a tradesperson so they should have insurance, however, they not responding to our calls/emails/etc for obvious reasons.
Is the OC liable for the costs under the circumstances? Or should the lot owner have done their due diligence and had the property properly inspected for damage prior to purchase?
Answer: We recommend that you obtain expert strata legal advice or find an amicable resolution and consider costs sharing.
This is not legal advice, however, we are aware that there is a NSW Supreme Court case which held that an owners corporation’s obligation to repair and maintain the common property extended to rectifying the damage to common property that was caused by an individual lot owner’s works but because the damage to the common property was caused by other lot owners, those other lot owners were held liable to indemnify the owners corporation in that regard.
In terms of the damage to lot property caused by another lot owner’s works, the Supreme Court also held that the lot owners who carried out the works were liable for damage caused to the other lot’s lot property pursuant to the hazard/interference/nuisance provisions of the strata legislation.
Your matter is complicated by the fact that the previous owner has sold and that the Owners Corporation did not pursue the previous lot owner to obtain the proper approvals at the relevant time. This may, in turn, impact on the Owners Corporation’s building insurance coverage.
It seems that the structural damage is latent (ie was not obvious at the time of purchase) and that even if the new owner had obtained a building condition pre-purchase inspection report, it would not have been detected.
The current lot owner may be able to pursue a private cause of action in nuisance against the previous lot owner.
We recommend that you obtain expert strata legal advice on behalf of the Owners Corporation, or, in the interests of saving legal costs and avoiding potential disharmony at the scheme, find an amicable resolution and consider costs sharing and engage the appropriate experts eg engineers etc.
This post appears in the December 2021 edition of The NSW Strata Magazine.
Leanne Habib
Premium Strata
E: info@premiumstrata.com.au
P: 02 9281 6440
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