Question: After experiencing multiple water ingress issues since 2018, my unit is deteriorating with dampness and mould. We need to raise a special levy before work can begin. How long should this take?
I have had two water ingress issues since 2018. The property has deteriorated, along with my health, due to the resulting mould and dampness. We need to raise a special levy before we begin repairs.
Do we need to wait for the vote for the special levy at the AGM, or can owners be emailed and a vote taken immediately? Once agreed, how long do owners have to pay the special levy? Can the funds come from the cash reserves and be topped by the special levy once everyone has paid?
Answer: You should not be exposed to health issues due to water ingress, mould and dampness.
Water ingress into your unit resulting in mould and dampness is an issue that should not continue for five or so years. Someone will be responsible for rectifying the water ingress. If the cause of the water ingress arises due to an issue in the common property, the owners corporation is most likely responsible. Pursuant to section 106 of the Strata Schemes Management Act 2015, the owners corporation has a strict duty to maintain and keep the common property in a state of good and serviceable repair.
For the purposes of answering your questions, I assume the water ingress is occurring due to the owners corporation failing to maintain or repair the common property. I assume the owners corporation is responsible. You should, however, ensure the cause of the water ingress has been properly identified and considered in the context of the registered by-laws and any unauthorised work.
The owners corporation should have a capital works fund which ordinarily should cover the cost to maintain and repair the common property. If a special levy needs to be raised to carry out the repairs, delaying the special levy is not an excuse for delaying the rectification work required to resolve the water ingress.
A special levy needs to be raised at a general meeting. You do not need to wait for the Annual General Meeting. The special levy may be raised at an Extraordinary General Meeting. Section 19 of the Strata Schemes Management Act 2015 states that “The secretary or a strata committee of an owners corporation may convene a general meeting (that is not an annual general meeting) of the owners corporation at any time.”
In relation to when a special levy is to be paid, this is to be decided at the general meeting. After the general meeting, levy notices need to be issued to all the owners, and the owners must be given at least 30 days’ notice before the levy is due and payable. This is a requirement of section 83 of the Strata Schemes Management Act 2015.
Regarding your question about whether payment may be made from cash reserves, the owners corporation has two “reserves”, referred to as “funds”. There is an administrative fund and a capital works fund. If sufficient amounts are available in either of these funds, the owners corporation should use these funds to resolve the water ingress and then replenish the funds soon afterwards. If it does not have sufficient funds, it should raise the funds required. Section 81 of the Strata Schemes Management Act 2015 provides that: “If the owners corporation is subsequently faced with other expenses it cannot at once meet from either fund, it must levy on each owner of a lot in the strata scheme a contribution to the administrative fund or capital works fund, determined at a general meeting of the owners corporation, in order to meet the expenses.”
As a general answer to your questions, you should not be exposed to health issues due to water ingress, mould and dampness. There are numerous provisions in the Strata Schemes Management Act 2015 that you may utilise to resolve the issue. I have referenced a few of the sections above to assist you in discussing the matter with your strata manager or the strata committee. I have not covered all of the legal avenues available to you. There are other sections in the Strata Schemes Management Act 2015 you can use if the circumstances require. You should obtain legal advice from a legal practitioner who specialises in strata law, as these issues can be complex, and disputes do arise.
Shane Williamson
Williamson Lawyers Pty Ltd
E: shane@williamsonlawyers.com.au
P: 0404 045 605
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