A recent hot topic has been the width of the powers given to NCAT to resolve strata disputes.

In particular, can NCAT resolve any strata dispute or just some disputes?

This interesting issue was considered in a recent decision of the Appeal Panel of NCAT.

The Strata Schemes Management Act 2015 gives NCAT power to make orders to settle complaints or disputes about the operation, administration or management of strata schemes or the exercise of functions of an owners corporation.  But the width of that power is not entirely clear.

For example, does the power allow NCAT to make an order to resolve any strata dispute?

Here we share a recent case outcome Can NCAT Resolve Any Strata Dispute or Just Some Disputes?

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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.

NCAT Issues a Warning for Building Managers

A recent decision of the NSW Civil and Administrative Tribunal (NCAT) has broken new ground in making orders for the termination of a Building Manager Agreement.

In particular, the finding in this case was that the caretaker (building manager) had failed to perform the relevant agreement satisfactorily, and that the building manager agreement, in the circumstances of the case, was harsh, oppressive, unreasonable or unconscionable.

Owners Corporations and Unsatisfactory Building Managers

This decision of NCAT provides a comprehensive analysis of the operation of s72 of the Strata Schemes Management Act 2015 and provides a solid framework for an Owners Corporation to consider whether there are grounds to seek the assistance of NCAT to bring an unfair or unsatisfactory Caretaker (Building Manager) Agreement to an end.

Here we share the recent case and outcomes: NCAT Issues a Warning for Misbehaving Building Managers.

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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.

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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Smokers Unknowingly Breaching By-laws

A recent decision of the NSW Civil and Administrative Tribunal (NCAT) has recognised that even though a lot owner smokes inside their lot, they still may be in breach of the by-laws of the owners corporation and  leave themselves open to a penalty being imposed by NCAT.

Why? Because if the smoke leaves their apartment it will almost inevitably penetrate Common Property in one way or another.

A Recent Case…

This recent case illustrates that it is extraordinarily difficult for smokers to avoid breaching by-laws and why it’s important to have a well-drafted by-law if the owners corporation wishes to comprehensively deal with the issue.

Here we share the recent NCAT case article Smoking in Strata Apartments another “nail in the coffin”!

Also below, Warwick van Ede, Specialist Strata Lawyer talks with LookUpStrata on this very case and the many unanswered questions!

It’s definitely time to review your smoking by-law, or to implement one if you do not have one!

NEED A SMOKING BY-LAW OR TO REVIEW YOURS?

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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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A recent decision of the Appeal Panel of the NSW Civil & Administrative Tribunal (NCAT) has highlighted the potential risks for owners corporations seeking to impose penalties and other sanctions on lot owners in connection with non-compliance with by-laws.

Careful attention will need to be paid by owners corporations to “cost recovery” aspects of their by-laws to ensure that an otherwise well constructed by-law is not rendered completely invalid.

Here we share a recent case where NCAT Tightens the Screws on Strata By-laws.

Owners corporations who have these by-laws should give consideration to having them reviewed.

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

In a landmark ruling, today the Appeal Panel of NCAT has ordered an owners corporation to upgrade a balustrade to comply with the Building Code of Australia.

This case marks the first time that an owners corporation has been ordered to upgrade an unsafe balustrade to achieve compliance with the Building Code of Australia.

The case cuts against the long held view that the provisions of the Building Code of Australia are not retrospective and that an owners corporation does not have to upgrade an unsafe balustrade to comply with the Code.

Here we share the full article Landmark NCAT Ruling – Upgrade that Balustrade

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

The rules of the game relating to pets in strata buildings have changed.

Many owners corporations are not grappling with those new rules and trying to come to grips with them.

This has resulted in a shift away from by-laws that ban pets to by-laws which regulate the keeping of pets in strata buildings.

But do some of the rules that have been included in new pets by-laws go too far?

A recent and high profile NCAT case takes a closer look at that issue – By-laws that Regulate Pets.

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

In last week’s newsletter article, we reported on a recent NCAT case in which an owners corporation was ordered to repair damage to lot property caused by a common property roof leak.

Our article generated considerable interest. The NCAT decision begs the question: Is an owners corporation responsible for repairing lot property?

In this article, we take a closer look at that issue and consider whether the NCAT case we reported on last week (Mastellone v The Owners – Strata Plan No. 87110 [2021] NSWCATAP 188) was correctly decided.

Read the full article Is an Owners Corporation Responsible for Repairing Lot Property?

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

There is a common misconception that an owners corporation is not responsible for repainting a water damaged ceiling in a lot or repairing consequential water damage to a lot that is caused by a common property defect.

In a recent case, NCAT held that:

• an owners corporation is responsible for carrying out those repairs;
• the common property memorandum does not exempt an owners corporation from having to perform those repairs.

Here we discuss the case and explain why an owners corporation is not exempt from repairing damage to lot property NCAT Orders Owners Corporation to Repair Lot Property

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

The NSW Government has made a number of important changes to the Strata Schemes Management Act 2015 (Act).

Sustainability Infrastructure, Voting and Proxies

On 24 February 2021, changes to the Act commenced that:

• Make it easier for a lot owner or owners corporation to install “sustainability infrastructure” on common property such as solar panels and electric vehicle charging stations. A lot owner or owners corporation will be able to install “sustainability infrastructure” on common property if a “sustainability infrastructure resolution” is passed by a simple majority (i.e. 50% or more) at a general meeting;
• Prevent an owners corporation making available for inspection any record that would disclose how an owner voted in a secret ballot unless the owners corporation is directed to do so by NCAT or a court;
• Enable a lot owner who owns more than one lot to nominate one individual to act as a proxy for all the lot owner’s lots.

Fines

Since 1 July 2021, NCAT has had the power to order a person to pay a penalty of up to $5,500 where the person has breached an order by NCAT.

Pets

From 24 August 2021, an owners corporation will not be able to have a by-law which unreasonably prohibits the keeping of an animal on a lot. Further, it will be deemed reasonable to keep an animal on a lot unless keeping the animal unreasonably interferes with another occupant’s use and enjoyment of the occupant’s lot or the common property. Those changes codify the decision of the NSW Court of Appeal in Cooper v The Owners – Strata Plan No 58068 [2020] NSWCA 250 in which it was held that a “no pets” by-law is unenforceable.

If you need any assistance with updating your by-laws or navigating the new laws please contact us here, we’re happy to assist.