Tenants, Building Defects, NCAT and Rent Relief

In a recent case, a property manager failed to inform a landlord of defects in the common property of a strata building and take any steps to investigate issues that a tenant had complained about.

The tenant applied to NCAT for a rent reduction as the landlord had breached their obligation to keep the rented premises in a reasonable state of repair as water leaked into the premises. The tenant was successful.

Who Could be Liable?

If a tenant claims rent relief from NCAT due to defects in a strata building, it’s important to note that NCAT could deem that it is the responsibility of the:

• Landlord who could lose rent (or worse) if they do nothing;
• Property manager if they fail to fix defects in the premises that they are authorised to repair following a tenant’s complaint in a timely manner;
• Property manager if they have not advised the landlord of defects (where they are not authorised organise repairs) following a tenant’s complaint;
• Owners corporation who could also be held liable for a landlord’s loss of rent.

A Timely Reminder for Managing Agents!

Ensure your professional indemnity insurance is current;

• Ensure your professional indemnity insurance is current
• Obtain landlord consent on a minimum amount for repair works which can be dealt with without the landlord’s approval;
• Allocate sufficient resources to attend to repair requests in a timely manner to avoid issues which could lead to court proceedings;
• Request that any common property defects are promptly repaired by the owners corporation;
• Ensure that the relevant strata by-laws for the apartment block are up to date to minimise your risk

Here we share some cases…

• https://www.caselaw.nsw.gov.au/decision/18261da0208ae3ceaf03173b
• http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWDC/2019/9.html

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

For the first time, all strata schemes across NSW are now required to report key information each year using the new Strata Hub portal.

To help strata schemes navigate this change, the NSW Department of Customer Service is hosting a special strata sector event.

Strata Scheme Reporting Lunchtime Online Q&A Event

The lunch hour event features a Q&A panel discussion on what the new reporting requirements will mean for NSW strata communities. Expert panellists will answer your questions and share insights about the new strata scheme reporting.

When: Wednesday 20 July 2022 from 12 noon – 1pm.

The panel includes:

• John Minns – NSW Property Services Commissioner
• David Chandler OAM – NSW Building Commissioner
• Kerrie Burgess – Director, Digital & Program Delivery, Department of Customer Service
• Karen Stiles – Executive Officer, the Owners Corporation Network
• Stephen Brell – President, the Strata Community Association (NSW)

If you’d like to submit any questions to the panel in advance, please email: stratasystem@customerservice.nsw.gov.au

TO ATTEND REGISTER ONLINE BY 15 JULY 2022

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

As you’re aware, recent changes to strata laws mean that all NSW strata schemes must, for the first time, complete online reporting.

The new strata portal will go live 1 July 2022 allowing strata committee members and strata managers responsible for reporting to register on the portal.

Communication Toolkit

This means that your networks will need to be advised of the reporting requirements. To assist with these communications NSW Fair Trading has developed a ‘Communication Toolkit’.

This ‘Communication Toolkit’ includes suggested wording for:

• Newsletters
• Websites
• Emails
• Social Media
• FAQs

To access the ‘Communication Toolkit’ please click here.

CLICK HERE FOR THE ‘COMMUNICATION TOOLKIT’

Further Information

• Visit: NSW Fair Trading Website
• Email: NSW Fair Trading
• Read Article: JS Mueller & Co Lawyers
• View: Strata Schemes Management Act 2015

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Strata NSW Covid-19 Laws Extended

To help strata and community associations to continue to manage their responsibilities of COVID-19 the NSW Government has extended the timeline for these laws to remain in place.

Laws were previously added to the Strata Schemes Management Regulation 2016 and the Community Land Management Regulation 2021 in response to the NSW COVID-19 outbreak.

These laws included allowing voting at remote meetings to be held electronically by tele or video conferencing, email or other electronic means. It is important to note that these laws will still apply even if a motion has not been passed.

New COVID-19 Strata Law Deadlines

Initially these temporary laws were to end on 31 May 2022 however they will now remain in place until 30 September 2022.

For further information visit: Strata Schemes Management Amendment (COVID-19) Regulation 2022 and the Community Land Management Amendment (COVID-19) Regulation 2022.

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

What type of resolution must an owners corporation pass in order to authorise a change to common property?

The strata legislation allows an owners corporation to replace common property with the authority of an ordinary resolution.

But the legislation also says that an owners corporation cannot upgrade common property unless it first passes a special resolution.

Where is the line drawn between replacing and improving common property?

In this article we take a closer look at this much vexed issue: Changing Common Property_ An Ordinary or Special Resolution?

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Who is Responsible for Common Property Repairs Caused by Rain?

Australia recently had its wettest November in 122 years. March and April 2022 have also seen unprecedented rainfall in New South Wales.

Extensive rainfall events test the patience of every strata manager resulting in numerous complaints about water leaks into strata lots.

Faced with endless demands, owners corporations need to be very clear about their responsibilities, so it’s timely to revisit some of the “fundamentals”.

In the article below we discuss…

Step 1 – Is it the owners corporation’s responsibility?

Step 2 – If it leaks has the common property failed?

Step 3 – Are damages payable by the owners corporation for common property failures?

For more read Rain and Maintaining Common Property – Who is Responsible?

Commencing 30 June 2022, the NSW Government will launch phase 2 of the ‘Strata Hub’, revolutionising strata management which means new reporting requirements for all strata schemes.

The ‘Strata Hub’ phase 1 initially went live on 31 July 2021 launching the Strata Building Bond and Inspections Scheme (IBBIS) functions to be dealt with through the ‘Strata Hub’.

What is ‘Strata Hub’ phase 2?

• ‘Strata Hub’ is a central point of information for all NSW’s strata schemes
• Information held on the ‘Strata Hub’ will increase transparency and access to information for Strata Schemes
• Purchasers will be able to obtain information about Strata Schemes for the purpose of potential purchases
• Current owners will be able to obtain documents/information such as fire inspection and environmental building reports
• Regulators will be able to monitor a scheme’s maintenance and building defects
• People working in strata related industries will now have easier access to much needed information

When does ‘Strata Hub’ phase 2 commence?

• ‘Strata Hub’ commences 30 June 2022
• Your Strata Schemes must be registered on the portal by 30 September 2022

What are the new reporting requirements for strata schemes?

• Within 3 months of an AGM, strata schemes will be required to lodge a return with the Office of Fair Trading (OFT), providing key details about the scheme
• Payable to the OFT annually, a fee of $3 per lot is required to cover administration costs
• For any updates/corrections to existing information you are obliged to update that information within 28 days from the date the secretary or managing agent became aware of the change
• If you do not comply fines of up to $2,200 can be imposed

The information stored on ‘Strata Hub’ will be divided into 2 categories:

• Publicly available information
• Other information available to limited groups

Would you like further information and assistance?

• Strata Schemes Management Amendment (Information) Regulation 2021 (the Information Regulation) on the NSW Legislation website
• A full list of the information required for the report to lodge with the OFT, and recommendations for where it can be sourced, is available here
• For any further assistance you may also contact specialist strata lawyers, JS Mueller & Co Lawyers here

‘Strata Hub’ is intended to be a central access point for residential strata buildings that will make it easier for buyers, owners, regulators, and those working in strata related industries to get the required information they need.

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Important Changes to CLMA 2021

The commencement of the Community Land Management Act 2021 (CLMA 2021) on 1 December 2021 has introduced a number of important changes to the laws regulating by-laws in Community Management Statements and Neighbourhood Management Statements.

Are Your By-laws up to Date?

As a result of these changes a number of by-laws contained in Management Statements are no longer valid or enforceable and many by-laws in Management Statements are now redundant.

This means there is a need for community associations and neighbourhood associations to review their Management Statements to ensure compliance with the CLMA 2021.

By-law Reviews – What Lessons Have Been Learned?

In the article below, we share some of the lessons that have been learned from those by-law reviews following the commencement of CLMA 2021. We look at:

• Harsh By-laws
• Pet By-laws
• Leasing
• By-laws Regarding Association Committees and Insurance
• Old Terminology
• Changes to Part 1 By-laws

Read article hear – CLMA 2021 Lessons Learned

Are You Compliant – Need a Review?

Our specialist strata lawyers have reviewed dozens of Management Statements for community and neighbourhood schemes. Need a review – click here now

ARE YOU COMPLIANT? – CLICK NOW FOR A REVIEW!

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

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Did you know that a new Bill Is currently before the NSW Parliament to permanently implement COVID-19 measures for the strata industry?

In the last 24 months, temporary reforms were made to the Strata Schemes Management Act 2015 and the Community Land Management Act 2021 in response to the COVID-19 pandemic.

The COVID-19 and Other Legislation Amendment (Regulatory Reforms) Bill 2022 proposes to make those reforms permanent.

The reforms include:

The New Reforms

The reforms include allowing:

• • strata owners corporations, strata committees and community associations, to meet and vote electronically without passing a resolution to do so;
  • owners corporations and community associations to validly execute documents by affixing the common seal electronically or by not affixing the seal at all; and
  • service of a document on an owner or occupier of a lot to be by email to an address nominated by the owner or occupier for the service of documents.

More Information 

Source: Explanatory note for the COVID-19 and Other Legislation Amendment (Regulatory Reforms) Bill 2022, accessed 17 February 2022.

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

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Who Pays the Compensation?

When an owners corporation is ordered to compensate an owner, who pays that compensation?  The owners corporation, right?  A recent decision by NCAT’s Appeal Panel produced a surprising answer to that question.

Introduction

An owners corporation has a statutory duty to properly maintain and keep in good repair the common property.  This duty arises under section 106 of the Strata Schemes Management Act 2015.  If an owners corporation does not repair defects in the common property, it will breach that duty.  Where that occurs, a lot owner who suffers monetary loss arising from that breach is able to sue the owners corporation to recover that loss.

Previous Cases

There have been a number of cases where both NCAT and the Supreme Court have ordered owners corporations to pay compensation to owners to cover their losses arising from failures to repair defects in common property that typically allow water to leak into and cause damage to lots. In those cases, owners have been awarded compensation for rental loss, alternate accommodation expenses, cleaning costs, repair costs, experts’ fees and legal costs.  But when an owners corporation is ordered to compensate an owner for those losses, who ends up paying that compensation? The answer to that question should be straightforward, right? Not so.

NCAT Case

On 30 November 2021, NCAT’s Appeal Panel handed down its decision in SP 74698 v Jacinta Investments Pty Ltd [2021] NSWCATAP 387.  In that case, an owner had sued an owners corporation for (among other things) compensation to cover the owner’s losses that arose from an owners corporation’s breach of its duty to repair common property.  The owner was successful and was awarded over $250,000.00 in compensation.  NCAT also ordered that the compensation be paid through a contribution that was levied on all owners except the successful owner who won the case.  The owners corporation appealed against that aspect of NCAT’s decision (and others). NCAT’s Appeal Panel upheld the decision.  The Appeal Panel concluded that it would be unjust for the successful owner to have to contribute towards the payment of the compensation the owners corporation had been ordered to pay the owner.  This meant that the owners corporation was required to levy a contribution on all owners (apart from the successful owner) to raise the funds needed to pay the compensation it was ordered to pay.  The owners corporation was also ordered to pay the owner’s costs of the case and those costs were determined to be payable through a contribution to be levied on all of the other owners.

The Wash Up

The Jacinta Investments case provides an example of one of the rare circumstances in which an owners corporation is able impose a differential levy on some but not all owners.  The case also highlights that individual owners can be made liable to pay compensation that an owners corporation is ordered to pay to another owner to cover any damage or loss the owner suffers where the owners corporation does not fulfill its responsibility to repair common property.

The Future

The Jacinta Investments case has broader implications.  It opens the door for owners to argue in legal proceedings in NCAT that they should not be required to contribute to the payment of costs an owners corporation will incur repairing common property or consequential damage to lot property.  So, for example, where an owner sues an owners corporation in NCAT for an order to force the owners corporation to repair common property defects and water damage to the owner’s lot caused by those defects, the owner may now be able to obtain an order from NCAT excusing the owner from having to contribute to a levy that is raised to pay for those repairs.  Stay tuned because there is likely to be another chapter to this story.

Author I Adrian Mueller, Partner I B.Com LLB FACCAL.

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

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