Question: If a common property leak causes lot damage, can the owners corporation apply the benefit principle to the defects and damage?
Answer: 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.
This post appears in the April 2025 edition of The VIC Strata Magazine.
Phillip Leaman
Tisher Liner FC Law
E: ocenquiry@tlfc.com.au
P: 03 8600 9370
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