NSW: Who pays for a leak from a past unauthorised renovation?

Question: Who is liable for a failed waterproofing membrane from an unauthorised renovation after the lot has been sold?

If a lot owner renovates a bathroom without the owners corporation’s approval or knowledge, and later sells the lot, who is responsible for the repair costs if the waterproof membrane fails? There was no by-law put in place at the time, as the owners corporation was unaware the renovation was occurring. Time has passed, the lot has since sold, and the shower now leaks.

Is the owners corporation responsible for the repair, or does the unauthorised nature of the original renovation mean the current owner can be held responsible? What about any damage to the unit below caused by water coming through the ceiling?

Does a dispute like this sit with NCAT?

Answer: The unapproved renovation is the previous owner’s liability, not the current owner’s or the owners corporation’s.

Pursuant to section 4 of the Strata Schemes Development Act 2015 (NSW) (“SSDA“) common property “in relation to a strata scheme or a proposed strata scheme, means any part of a parcel that is not comprised in a lot (including any common infrastructure that is not part of a lot).” section 6(1) states that:

For the purposes of this Act, the boundaries of a lot shown on a floor plan are—

1. except as provided by paragraph (b)—
   1. for a vertical boundary in which the base of a wall corresponds substantially with a base line—the inner surface of the wall, and
   2. for a horizontal boundary in which a floor or ceiling joins a vertical boundary of the lot—the upper surface of the floor and the under surface of the ceiling, or
2. the boundaries described on the floor plan relating to the lot, in the way prescribed by the regulations, by reference to a wall, floor or ceiling in a building to which the plan relates or to common infrastructure within the building.

In summary, pursuant to the SSDA, walls, floors, and ceilings which enclose a lot are common property. section 106 of the Strata Schemes Management Act 2015 (NSW) (“SSMA“) prescribes that an owners corporation has the obligation to “properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation” and “must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation.”

In the scenario given by the enquirer, the lot owner had alleged changes to the common property of the owners corporation without approval. The SSMA states that unless the works are cosmetic works (c.f. section 109), works to common property require approval from the owners corporation (c.f. sections 108 and 110.) Additionally, the lot owner allegedly damaged common property in the performance of the unapproved works. There is a general law principle that if one party (e.g. a lot owner) damages the property of a second party (e.g. the owners corporation), the second party can seek recovery of the damages from the first party. Nothing in the SSMA changes that general law principle: c.f. The Owners – Strata Plan No. 37762 v Pham [2006] NSWSC 1287 at [76].

That it was a previous lot owner that caused the damage is not a matter for the owners corporation. Their claim would be against the owner of the relevant lot. The present lot owner may have a claim against the previous lot owner, but I am unable to consider that with only the information given in the enquiry, and I’d encourage the enquirer to seek legal advice.

This post appears in the August 2026 edition of The NSW Strata Magazine.

Matthew Lo
Kerin Strata Lawyers
E: matthew@kerinstratalawyers.com.au