Can the owners corporation seal in mould instead of removing it?

From the outset, it is worth noting that there are a few moving parts to this issue. It would therefore be prudent to obtain tailored legal advice. Our comments below are general in nature.

This question comes up quite often.

Encapsulating mould-affected common property, rather than removing it, is not likely to discharge the owners corporation's duty under section 106 of the Strata Schemes Management Act 2015 (NSW) (SSMA).

Section 106(1) of the SSMA requires the owners corporation to maintain common property properly, keep it in a state of good and serviceable repair, and renew or replace it where necessary. The courts treat this as a strict duty.

The owners corporation generally has discretion about how it repairs common property. However, the chosen method must achieve that standard. In your case, the committee approved a quote that describes itself as an interim make-safe only. It says the affected material should eventually be removed and gives no warranty against recurrence. It is hard to see how work described that way by the contractor could bring the common property to a state of good and serviceable repair. The difficulty increases if the material is permanently sealed behind new waterproofing, because the interim measure becomes the final one. Once the new linings and tiles are installed over encapsulated but non-rectified material, the damage will be permanently sealed from view and any future access will require demolition of the new works.

Further, the owners corporation is likely responsible for reinstating the main bathroom's fixtures. If it needs to go through your main bathroom to repair common property, or to fix damage caused by its failure to maintain common property, the cost of reinstating your fixtures and finishes is normally included in the cost of those works.

Reference should also be made to the strata plan and by-laws to ascertain whether a special resolution exemption under section 106(3) of the SSMA applies.