Question: An owner didn’t dry out their lot after a flood, and the slab beneath was later found badly damaged. Can the owners corporation refuse their claim for flooring and accommodation costs?
A few years ago, a water heater failed and flooded a lot in our building. We believe the owner did nothing to limit the water damage, such as hiring industrial heaters to dry the place out.
Recently, the owner started having problems with floorboards coming loose and cracking. The strata committee decided to remove and re-level the magnesite, which revealed severe damage to the slab underneath, including spalling and corroded reinforcement. As the slab is common property, the strata committee organised the repairs, which are now complete.
The remedial builder believes the flood definitely made the slab damage worse and said it was the worst he’d seen. Where magnesite has been removed elsewhere in the building, no other slab has damage to this degree.
Can the owners corporation refuse the owner’s claim for the cost of reinstalling floor coverings and alternative accommodation on the basis that the owner’s neglect and failure to limit the damage make them liable?
Answer: The owners corporation’s repair duty is strict, but a damages claim can be reduced where the owner acted unreasonably.
Whether the claim for cost of reinstallation of floor covering and alternative accommodation can be denied based on the owner’s failure to mitigate damage will require responding to the statutory framework found in the Strata Schemes Management Act 2015 (the Act).
- Did the owners corporation (OC) breach their duty to maintain and repair common property (section 106(1)) (Breach)?
- Did the lot owner suffer reasonably foreseeable loss as a result of the Breach (section 106(5))? And/or
- Did the actions of the lot owner cause or contribute to the damage to the common property, in which case the OC can claim against the lot owner (section 106(2))?
The NSW Supreme Court held in Owners – Strata Plan No 2661 v Selkirk [2024] NSWSC 760 at [140], “damages conferred by s 106(5) is that it be qualified in cases where the claimed loss is too remote, or where the plaintiff has behaved so unreasonably that part or all of the claimed loss is properly characterised as caused by the plaintiff rather than by the owners corporation’s breach.” (emphasis added)
So, the primary question is, what caused the Damage?
- Was it solely the flooding from the water heater that was not dried out?
- Is the water heater common property?
- Or, was there another issue in the common property that was not repaired and maintained? For example, the remedial builder states that there is other “damage to slabs in the rest of the building” (albeit not to this extent). This suggests that there could be another source of the water ingress.
- Did the water heater flooding cause or contribute to the Damage? By how much?
The duty of the OC to maintain and repair in section 106(1) of the Act is strict. For example, in Trevallyn-Jones v Owners Strata Plan No 50358 [2009] NSWSC 694, there was water ingress from failed waterproofing of the common property. The OC tried to argue that, even if there was a Breach, the owner hampered the OC from carrying out repairs and/or the owner failed to mitigate by performing basic remedial works, and therefore should not be liable for the lot owner’s damages for rent foregone.
The Court held at [363] that, despite any hampering by the lot owner, the OC is not excused from its duty in section 106(1), and the lot owner did not contribute to her loss or fail to mitigate.
That is, the question is what caused the floorboards to be re-installed, and the residents to move out to an alternate accommodation (“Damage”)? Was it the Breach, or the behaviour or the property of the owner?
Please be aware that this is general information. It is not legal advice. You should speak to a lawyer if you have any concerns to receive advice tailored to your situation.
This post appears in the November 2026 edition of The NSW Strata Magazine.
Chris Kim Benson Legal E: Chris@bensonlegal.com.au
