NSW: Can lot owners be reimbursed for painting without owners corporation approval?

Question: If alterations or improvements have been made to common property without approval, should the lot owner be reimbursed?

The exterior of our eight villa complex needs painting. At the AGM, we decided there was not enough money available to carry out the works, and further discussion would occur later if levies were available.

Three owners would not wait and, without approval, paid to have their villas painted. A year later, we had enough owners corporation funds to paint the remaining five villas.

The three villas who paid for painting have requested the owners corporation reimburse them.

If alterations or improvements have been made to common property without approval, should the lot owner be reimbursed? Would this apply in our case?

Answer: An owners corporation is under no obligation to reimburse a lot owner who has chosen to repair or maintain common property by their own accord.

Section 111 of the Strata Schemes Management Act 2015 (NSW) (‘the Act’) expressly prohibits an owner from undertaking work to common property unless they are authorised:

1. by the owners corporation:
   
   1. by special resolution; or
   2. in accordance with its by-laws; or
2. by any other way mentioned in Part 6 of the Act, such as:
   
   1. by special resolution authorising an owner to add to, alter or erect new structures on common property;
   2. undertaking cosmetic work or minor renovations;
   3. by way of a licence to use common property; or
   4. by way of a lease of part of the common property.

On that basis, an owners corporation is under no obligation to reimburse a lot owner who has chosen to repair or maintain common property by their own accord.

The owners corporation is fundamentally responsible for and therefore has control over who performs work to common property.

This is not to say that an owners corporation cannot enter into an agreement with an owner about such matters (either before or after works).

If an owners corporation were to decide to approve unauthorised works retrospectively, a special resolution would be required in accordance with section 111(c) of the Act.

This post appears in the August 2023 edition of The NSW Strata Magazine.

Tim Sara
Strata Choice
E: tsara@stratachoice.com.au
P: 1300 322 213