A Qld lot owner would like to know who pays for accommodation when vacant possession is required for repairs to common property. Frank Higginson, Hynes Legal provides the following response.
Table of Contents:
- QUESTION: If our building requires hot water pipe maintenance that results in no hot water for some time, is the body corporate responsible for resident’s temporary accommodation?
- QUESTION: Who is responsible for accommodation costs when a lot owner vacates for a builder to carry out repairs under warranty?
- QUESTION: Can our Body Corporate demand Vacant Possession to undertake waterproofing repairs to common property? With no choice to stay in the unit, shouldn’t alternative accommodation be supplied at their cost?
Question: If our building requires hot water pipe maintenance that results in no hot water for some time, is the body corporate responsible for resident’s temporary accommodation?
Our building may require significant and urgent hot water pipe maintenance, resulting in no hot water access for a period of time. Is the body corporate required to pay for resident’s temporary accommodation during the work? In QLD, the rental minimum standards to be considered habitable require hot running water.
Answer: All owners may be in the same position, so they would be funding their own loss and damage via the body corporate.
Todd Garsden, Mahoneys:
A body corporate’s strict maintenance obligation means that any time an element falls out of good condition, the obligation is breached. Breach of a statutory obligation can give rise to liability if an owner or occupier suffers loss.
Accordingly, there is not necessarily an entitlement to “alternative accommodation”, but if there is quantifiable loss, the owner or occupier may be able to recover that from the body corporate.
In some circumstances this is academic, as all owners may be in the same position so they would be funding their own loss and damage via the body corporate. The quantum of loss also regularly pales in comparison to the cost burden of evidence and proceedings to make any such claim against the body corporate.
Tyrone Shandiman, Strata Insurance Solutions:
From an insurance perspective, claims for loss of rent or accommodation costs are generally only considered where insured damage renders the property uninhabitable. In this instance, the issue appears to relate to piping works. It’s unclear whether the cause is due to insured damage or a non-insurable matter such as defects, wear and tear, gradual deterioration, or general maintenance. If the latter applies, insurance is unlikely to respond to either the event or any resulting loss of rent.
If a legal claim is made against the body corporate—for example, alleging a breach of statutory duty—there may be scope for cover under the legal defence costs section of the policy subject to the terms, conditions, and exclusions.
Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753
Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
P: 1300 554 165
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.
This post appears in Strata News #745.
Question: Who is responsible for accommodation costs when a lot owner vacates for a builder to carry out repairs under warranty?
The builder is replacing the laminate flooring installed during construction. The same flooring was installed in all units.
Some 70 of 325 owners have reported delamination or movement due to an uneven slab. In most cases, repair is not an option given the extent of delamination.
The developer is an international company that operates globally and the builder is a large Australian company that operates nationally.
Who is responsible for accommodation costs when a lot owner vacates for a builder to carry out repairs under warranty?
Answer: Lot owners may have rights against the builder for the displacement costs
Lot owners are responsible for the maintenance of their lot – which would extend to the flooring within the lot. Each lot owner may then have rights as against the builder for the defects in any flooring to be remedied depending on the terms of the construction contract between the builder and the developer and any rights that can be pursued through the QBCC.
Assuming the builder is responsible for remedying those defects, the lot owners may also have rights to consequential damage against the builder (such as displacement costs). However, this will depend on the specific terms of the construction contract and what can be negotiated with the builder.
Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753
This post appears in the February 2024 edition of The QLD Strata Magazine.
Question: Can our Body Corporate demand Vacant Possession to undertake waterproofing repairs to common property? With no choice to stay in the unit, shouldn’t alternative accommodation be supplied at their cost?
Our complex is located in Queensland. Water penetration remediation works have been approved by the Body Corporate through an AGM motion. The complex has a Building Format Plan and is under the BCCM Act & Accommodation Module Regulations.
The Superintendent of the remedial works has requested, through the Body Corporate and the Body Corporate Manager, Vacant Possession of the unit whilst the works are being undertaken. This could take up to 21 days to complete.
There has not been any offer or consideration of alternate accommodation during that vacant possession period. As well as the cost of securing alternate accommodation for the period of time, I also have concerns about the security of the unit and any damage to furnishings and fixtures whilst the contractors are on site.
As our bedrooms and bathroom areas are located at the opposite end of the unit and would not impact on the contractors performing their work on the terrace, I wonder why Vacant Possession has been requested. Can the Body Corporate demand Vacant Possession without alternatives being offered to undertake the waterproofing works to the terrace?
Answer: If vacant possession is needed to carry out the works, cost should be borne by the body corporate.
It is hard to challenge the basis of what works are required without a competing builder’s report.
If vacant possession is needed to carry out the works (which would seem odd if the works are limited to the balcony only) there is an argument that these costs are consequential to the works the body corporate is responsible for, and should be borne by the body corporate.
Frank Higginson
Hynes Legal
E: [email protected]
P: 07 3193 0500
This post appears in Strata News #261.
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Question, when a body corporate is authorizing remedial works and maintenance and requires additional funds from owners due to not enough funds in the sinking fund. Is the amount required divided equally between the number of units OR should the amount be divided by the size of the units [1 bedroom and 2 bedroom etc]?
Hi,
The total should be divided by the unit entitlements ascribed to each lot. Effectively this is the second method you are suggesting. You can check the entitlements on your CMS and if you have any questions on the split you should check with your body corporate manager.