If a common property leak causes lot damage, can the owners corporation apply the benefit principle to the defects and damage?
An owners corporation may be able to apply the benefit principle to the costs of rectifying the originating defect if the issue mainly benefits the lot rather than all of the lots.
An owners corporation (OC) may be able to apply the benefit principle to the costs of rectifying the originating defect if the issue mainly benefits the lot rather than all of the lots. An example might be where there is water ingress from a defective window in a lot. The costs of rectifying the window may be applied using the benefit principle.
However, if the OC was on notice of the defect and did nothing to fix the issue and as a consequence of that failure, water ingress occurred for a while and damaged say, the carpet, the OC might be required to pay to fix the carpet. The costs cannot be apportioned according to the benefit principle because they are damages that arise from the OC’s breach of a statutory duty.
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Phillip Leaman specialises in Owners Corporations law, adverse possession and compulsory acquisition and is the Principal for the Owners Corporation team at Tisher Liner FC Law. Phillip provides practical and strategic advice to Owners Corporations in respect to all types of disputes concerning the Owners Corporations Act 2006, defect claims arising from original building works under the Domestic Building Contracts Act 1995 and disputes between lot owners, contractors and managers. He also assists Owners Corporations in governance and other property law advice required such as interpreting plans of subdivisions, leasing and licensing, adverse possession and dealing with managers and contractors. He acts for Owners Corporations in Victoria and the Australian Capital Territory. Phillip Leaman has been recognised on the Best Lawyers List between 2019 to 2022 in the category of Real Property Law. For information useful to Owners Corporations see our website at: https://tlfc.com.au/expertise/owners-corporation/
Phillip is a regular contributor to LookUpStrata.
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