Spring is traditionally the busiest time of year for New South Wales strata schemes. As the warmer weather arrives, buildings naturally shake off winter, and committees turn their attention to sprucing up the property, tackling deferred projects, and preparing for the upcoming AGM season.

Perhaps it is a slow-developing waterproofing leak on a balcony wall discovered during spring inspections, or a patch of rising damp in the basement. A committee looks at the budget, votes to defer the fix until next financial year, and breathes a temporary sigh of relief.

Except under NSW strata law, that relief is an illusion.

The Non-Negotiable Duty of Section 106

Under Section 106 of the Strata Schemes Management Act 2015, an owners corporation carries a strict, statutory duty to properly maintain and keep common property in a state of good and serviceable repair.

This is not a discretionary checklist item or a matter for committee vote. An owners corporation cannot lawfully vote to opt out of repairs simply because funds are constrained or a major capital works project is looming. Delaying or ignoring common property repairs transforms an administrative delay into an actionable breach of statutory duty, exposing the scheme to substantial legal liability.

The Extended Six-Year Risk Window

The expansion of the limitation period under Section 106 means lot owners now have up to six years from the date they first become aware of a loss to commence legal proceedings against an owners corporation.

This extended window fundamentally alters a building’s risk profile:

• The Long Tail of Historical Liabilities: Unresolved maintenance requests buried in past records or chronic balcony leaks reported years ago do not expire when a committee changes over. They remain active legal exposure.

• Compounding Damages: Over six years, minor defects cascade into major structural damage, interior destruction, and significant claims for alternative accommodation or lost rental income—all of which the owners corporation may be legally mandated to pay.

• The Erosion of Committee Defences: Committees often operate under the false security that silence from an owner equates to acceptance. The six-year runway gives owners ample time to seek formal legal counsel and pursue high-value compensation in the Tribunal.

Protecting the Owners Corporation This Spring

Spring cleaning should extend far beyond gardens and foyers. To mitigate long-term exposure and protect the building’s financial health, strata managers and committees must take a rigorous approach to governance:

• Audit and Prioritise Maintenance Registers

• Tighten Renovation Oversight

• Review Service and Contractor Contracts

Safeguard Your Building Today

Navigating historical maintenance backlogs, complex Section 106 exposures, contracts, service agreements, and building by-laws requires specialised legal precision, so contact our expert strata team this spring for practical guidance tailored to your scheme’s obligations.

Speak With Our Strata Lawyers for Maintenance Delays & Section 106 Compliance

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Need Expert Strata Law Advice?

Whether you are navigating a complex dispute or looking to protect your scheme, our specialist NSW and Sydney strata lawyers are here to help. We provide clear, practical advice on all aspects of strata law, including by-laws, strata disputes, building defects, and fast levy debt collections. Call our team on 02 9562 1266 or email us here today.

Sharma v Hoque [2026] NSWCATAP 198 (24 June 2026) is not a strata case. But it may have an important strata consequence of which to be aware.

The Legal Trap: Landlord Liability for Common Property Defects

The Appeal Panel has reaffirmed that a landlord may remain liable to a tenant under the Residential Tenancies Act 2010 (NSW) (RTA) even where the relevant defect that the tenant complained about relates to common property which is the owners corporation’s responsibility to repair, replace or maintain. The same conclusion was previously reached by the Appeal Panel: see McCartney v Wood [2023] NSWCATAP 131 [77]-[79].

Section 63 of the RTA requires the landlord to provide and maintain the premises in a reasonable state of repair. Section 44 of the RTA permits an excessive rent order where goods, services or facilities provided with the premises are reduced or withdrawn or given the state of repair of the residential premises.

That matters for owners corporations I Case study: Sharma v Hoque

In Sharma, the tenants recovered rent reductions from the landlord for various defects, including a gas and water leak, balcony leak, faulty intercom, air conditioning and lift issues.

The landlord argued that some of these matters were “strata” issues and were outside of landlord’s control. The Tribunal and the Appeal Panel rejected that argument. The Appeal Panel held that a landlord may be in breach of the obligation to repair the residential premises even where delay in doing so is caused, or partly caused, by an owners corporation.

The Strata Impact: Passing the Financial Loss to the Owners Corporation

The strata point is this: where an owners corporation breaches section 106 of the Strata Schemes Management Act 2015 (NSW) (SSMA) by failing to repair common property, and that breach causes the landlord to become liable to the tenant, the landlord may have a claim against the owners corporation.

Section 106 of the SSMA and Statutory Duty

Section 106 of the SSMA requires an owners corporation to maintain and keep common property in good and serviceable repair. It also gives a lot owner a right to recover, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of the owners corporation’s breach of that strict duty. The current limitation period under section 106(6) is six years from when the owner first becomes aware of the loss.

Forecasting the Chain of Loss

A rent reduction or a compensation order made in favour of a tenant may therefore become part of the landlord’s loss. That loss may not be remote merely because it is first suffered by the tenant.

In some cases, it may be foreseeable that, if common property defects affect a rented lot in a strata scheme, the tenant may seek rent reduction or compensation from the landlord. It may be equally foreseeable that the landlord may then look to the owners corporation if the underlying cause was an unremedied common property defect.

Key Takeaway for Strata Managers and Owners Corporations

Owners corporations should not assume that delay only exposes them to repair and remediation orders or to loss of rental income. Delay in rectifying common property may create a chain of financial loss. Where a rented lot is affected, that chain may run from the tenant to the landlord, and then back to the owners corporation under section 106 of the SSMA.

Owners Corporation Responsibilities: Beyond Strata Law

Sharma is not new law. But it is a useful reminder that disputes about an owners corporation’s duty does not sit neatly inside strata law. A failure to repair common property can have consequences for tenancies, and those consequences may become recoverable loss in a later section 106 claim against the owners corporation.

Have a Strata Dispute – Speak to the Experts.

Need Expert Strata Law Advice?

Whether you are navigating a complex dispute or looking to protect your scheme, our specialist NSW and Sydney strata lawyers are here to help. We provide clear, practical advice on all aspects of strata law, including by-laws, building defects, and levy collections. Call our team on 02 9562 1266 or email us here today.

What every owners corporation needs to know right now.

A recent Supreme Court decision has changed the landscape for owners corporations pursuing strata building bond money.

Here’s what happened, what it means for you, and why getting the right advice early is more important than ever.

First, a quick refresher: What is a strata building bond?

When a developer builds a residential strata scheme worth more than $20,000 in contract price, they are required by law to lodge a building bond with NSW Fair Trading. This bond typically 2% (increases to 3% 1 July 2026) of the contract price acts as a financial safety net for the owners corporation if building defects are found but not fixed.

The process broadly works like this:

• An independent building inspector completes an interim and then a final report identifying any defects.
• If defects remain unrectified, NSW Fair Trading can order the bond (or part of it) to be paid out to the owners corporation to fund repairs.
• The developer can dispute this decision via an internal review, and ultimately through the courts.

What happened in this case?

In May 2026, the NSW Supreme Court handed down a significant decision: Peninsula Point Frederick Pty Ltd v Secretary, Department of Customer Service [2026] NSWSC 476.

Here’s the short version:

• A developer at Point Frederick, NSW, lodged a building bond of just under $800,000.
• Defects were identified in interim and final inspection reports, with a quantity surveyor estimating rectification costs of over $1.3 million, well above the bond amount.
• The Secretary determined the full bond should be released to the owners corporation.
• The developer challenged the decision, submitting its own expert evidence and arguing the government reviewer hadn’t properly engaged with competing reports.
• The Court ultimately quashed the review decision and sent it back for redetermination — not because the owners corporation had done anything wrong, but because the reviewer failed to properly consider the developer’s submissions about methodology.

In summary, the owners corporation was on the verge of receiving nearly $800,000 to fix genuine building defects. Because of a procedural flaw in how the government reviewer handled the developer’s submissions, the whole process had to start over. No money. More waiting. More uncertainty.

What this means for your owners corporation.

This case is a wake-up call. It demonstrates three areas about the building bond regime that every owners corporation should understand:

• You may not even know the developer is fighting you.
  A developer can lodge an internal review application and pursue the matter all the way to the Supreme Court without the owners corporation being formally served or having any real opportunity to put its case forward. You can be completely in the dark while the process that affects your building’s future plays out.
• The bond process is deliberately provisional.
  The Court confirmed that the Secretary’s role is not to make binding legal findings about whether defects exist or who is to blame. The bond regime is designed as a rough-and-ready safety net, not a final determination. That means the money can be paid out, and then potentially clawed back, without ever resolving the underlying dispute about the building.
• Once you receive bond funds, your obligations are strict.
  Under the Strata Schemes Management Act, owners corporations must apply bond money strictly in accordance with the legislation. If the decision to release the bond is later set aside on appeal or remitter, there are real questions about what happens next including whether funds already spent need to be repaid or accounted for.

The parallel proceedings problem

Many owners corporations dealing with defects are pursuing claims under both the building bond regime and the Home Building Act 1989. These two pathways don’t always run smoothly side by side.

Decisions made in one forum can affect your position in the other. Accepting bond money (or not) can have strategic implications for your HBA claim. Engaging in one process without considering the other can inadvertently limit your options.

This is exactly the kind of complexity that requires experienced legal guidance a lawyer who understands how these regimes interact.

Our advice: Don’t wait until there’s a problem.

If you have received any notice from the Secretary under the building bond regime or if you’re aware that a building bond has been lodged for your strata scheme speak to a specialist strata lawyer now.

The timeframes in the legislation are strict, the stakes are high, and the window to protect your position can close quickly. 

For a detailed analysis of the Court’s decision, you can read our full case here: Strata Building Bonds Case:_What You Should Know

Strata Building Bonds: Complex Law, Clear Advice.

Strata living is about people’s homes, investments, and communities. Our team works with owners corporations, strata committees, and strata managers across Sydney metropolitan and regional NSW every day.

We can help you:

• Review any notices under the building bond regime and advise on your rights and obligations
• Monitor and intervene in review or judicial review proceedings to protect your interests
• Advise on how the bond regime interacts with any Home Building Act claims
• Guide your committee and manager on how bond funds must be applied and accounted for
• Represent you if the developer takes the matter to NCAT or the courts.

Our specialist strata legal team understands this area of law is complex. That’s why we ensure that our advice is clear, practical and focused on your outcomes.

FOR COMPLEX BUILDING BOND LEGAL ADVICE CLICK HERE NOW

Helen Amanatiadis I  LLB LLM  I  Lawyer

Helen has over 27 years’ experience in complex construction disputes. She is a Law Society of NSW Accredited Specialist in both Commercial Litigation and Building and Construction Law, a credential recognising peak expertise in her field. Profile l LinkedIn

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 of yesterday, 1 April 2026, the NSW strata landscape underwent its most significant legislative shift in years. While much of the industry has focused on developers, this new era introduces rigorous and mandatory standards that fundamentally change how schemes work. Every owners corporation, committee member, strata manager and developer must navigate these changes to ensure they remain compliant.

The Developer Crackdown: $11,000 Reasons to Comply

This reform specifically targets the handover phase of new buildings. To prevent developers from under budgeting levies to attract buyers, any multi-storey scheme holding its first AGM on or after 1 April must now provide:

• Independent Levy Certification: Initial levy estimates must be certified by an independent surveyor.
• Mandatory Maintenance Schedules: These must be presented using the official NSW Government standard form.
• Penalties: Developers who fail to provide these documents at least 14 days before the first AGM face a maximum penalty of $11,000, plus an ongoing $220 per day until they comply.

Not Just for Developers: Risks for Existing Schemes

It is a common misconception that established schemes are exempt. From 1 April 2026, existing owners corporations face immediate new obligations:

• Standardised 10-Year Plans: The next time your scheme reviews its 10-year Capital Works Fund plan, it must transition to the mandatory NSW Government standard form.
• Section 184 Updates: Every Strata Information Certificate issued from 1 April must now disclose Exclusive Supply Networks (embedded networks for power or data).

The Enforcement Shift: Penalty Infringement Notices

The most critical change is the expansion of NSW Fair Trading’s watchdog powers. The regulator is moving away from simple warnings toward active enforcement of the Statutory Duty to Maintain and Repair.

• Penalty Infringement Notices (On-the-Spot Fines): If an owners corporation ignores a formal Compliance Notice regarding building defects or fails to uphold an Enforceable Undertaking, they can now be issued on-the-spot fines. Compliance is no longer a suggestion; it is a statutory requirement with immediate financial consequences for the scheme.

Expert Guidance for a New Era: Avoid Non-Compliance with a Review

Navigating the complexities of the April 1 reforms can be challenging. Our expert strata legal team specialises in translating these new statutory requirements into clear, actionable strategies to ensure schemes remain compliant.

NEW STRATA LAWS COMMENCED APRIL 1: AVOID NON-COMPLIANCE WITH A REVIEW

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

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

With only 48 hours remaining until 1 April 2026, the NSW strata landscape is about to undergo its most significant shift in years. While much of the industry has focused on developers, this new era introduces rigorous and mandatory standards that every owners corporation, committee member, strata manager and developers must navigate to remain compliant.

The Developer Crackdown: $11,000 Reasons to Comply

This reform specifically targets the handover phase of new buildings. To prevent developers from under budgeting levies to attract buyers, any multi-storey scheme holding its first AGM on or after 1 April must now provide:

• Independent Levy Certification: Initial levy estimates must be certified by an independent surveyor.
• Mandatory Maintenance Schedules: These must be presented using the official NSW Government standard form.
• Penalties: Developers who fail to provide these documents at least 14 days before the first AGM face a maximum penalty of $11,000, plus an ongoing $220 per day until they comply.

Not Just for Developers: Risks for Existing Schemes

It is a common misconception that established schemes are exempt. From 1 April 2026, existing owners corporations face immediate new obligations:

• Standardised 10-Year Plans: The next time your scheme reviews its 10-year Capital Works Fund plan, it must transition to the mandatory NSW Government standard form.
• Section 184 Updates: Every Strata Information Certificate issued from 1 April must now disclose Exclusive Supply Networks (embedded networks for power or data).

The Enforcement Shift: Penalty Infringement Notices

The most critical change is the expansion of NSW Fair Trading’s watchdog powers. The regulator is moving away from simple warnings toward active enforcement of the Statutory Duty to Maintain and Repair.

• Penalty Infringement Notices (On-the-Spot Fines): If an owners corporation ignores a formal Compliance Notice regarding building defects or fails to uphold an Enforceable Undertaking, they can now be issued on-the-spot fines. Compliance is no longer a suggestion; it is a statutory requirement with immediate financial consequences for the scheme.

Expert Guidance for a New Era: Is Your Scheme April 1 Ready?

Navigating the complexities of the April 1 reforms can be challenging. Our expert strata legal team specialises in translating these new statutory requirements into clear, actionable strategies to ensure schemes remain compliant.

IS YOUR SCHEME APRIL 1 COMPLIANT? CLICK HERE FOR A REVIEW

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, disputes, 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 Are Unit Entitlements and Why Do They Matter?

The unit entitlements of the lots in a strata building determine the amount of levies that are payable by owners and the owners’ interests in the common property. The unit entitlements are meant to reflect the market values of the lots at the time the strata plan for the building was registered. Occasionally they do not. In those circumstances, does the owners corporation of the building owe a duty to owners to change the unit entitlements? A recent NCAT case provides the answer to that question.

NCAT Decision: No Duty to Change Unit Entitlements

In Sydney Gold Bullion Exchange Pty Ltd v The Owners – Strata Plan 34794 [2026] NSWCATAP 75, NCAT’s Appeal Panel upheld an earlier decision of NCAT in finding that an owners corporation does not owe a duty to change the unit entitlements of the lots in the building. This is the case even where the owners corporation had previously passed resolutions to change the unit entitlements or some of them.

The Appeal Panel confirmed that there is nothing in the Strata Schemes Management Act 2015 or the general law that requires an owners corporation to apply to NCAT for an order to change the unit entitlement and that would be the case even if the owners corporation considers that the unit entitlements are wrong. This is partly because individual owners are entitled to apply to NCAT for an order to change the unit entitlements themselves.

No Duty of Care and No Right to Compensation

It is also because there is no recognised duty of care at law that requires an owners corporation to take reasonable steps to ensure that the unit entitlements of the lots in its building are correct and to reallocate those unit entitlements if they are wrong.

The Appeal Panel also concluded that this meant that an owner was not entitled to be awarded compensation against the owners corporation owing to the owners corporation’s failure to change the unit entitlements or apply to NCAT for an order that would have that effect. So this means that an owner who claims that he or she has overpaid levies due to excessive unit entitlements cannot recover the overpayments from the owners corporation on the basis that the owners corporation did nothing to change the unit entitlements.

Key Takeaway

The Gold Bullion case confirms that even where the unit entitlements of lots in a strata building are wrong, the owners corporation of the building does not owe a duty to the owners to apply to NCAT to change the unit entitlements and cannot be held liable in damages to owners for failing to do so. The Gold Bullion case followed the earlier decision of the Appeal Panel in Trentelman v The Owners – Strata Plan 76700 [2021] NSWCATAP 222.

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

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

The framework governing the handover of new strata schemes in New South Wales is undergoing a significant shift. 

From 1 April 2026, the Strata Schemes Legislation Amendment Act 2025 introduces more rigorous standards for the disclosure and certification of maintenance and capital works fund planning.

These reforms are designed to address ‘gaps’ in the transition from developer control. For a committee, understanding these new requirements is the first step in ensuring the long-term structural and financial viability of your scheme.

The Mandatory Standard for Maintenance (IMS)

The era of inconsistent, bare-minimum maintenance schedules is ending. The NSW Government has introduced a standardised form for the Initial Maintenance Schedule (IMS) to ensure that committees have a clear, enforceable roadmap for the upkeep of common property.

Key Statutory Requirements:

• Prescribed Format: Developers must use the official NSW form for any scheme with a first AGM on or after 1 April 2026.
• Granular Disclosure: The IMS must now detail the frequency of inspections, estimated costs at the time of completion, and provide all necessary manufacturer warranties and manuals.
• The 10-Year Forecast Link: This schedule is no longer a standalone document; it is the essential data set required to produce a compliant 10-year capital works fund forecast.

Independent Certification for Multi-Storey Schemes

To mitigate the risk of initial lower levies—which often lead to significant special levies in the second or third year—the law now mandates independent surveyor certification for buildings exceeding two storeys.

Before the first AGM, a qualified, independent Quantity Surveyor (certified by AIQS or RICS) must review the developer’s figures and certify that:

1. The IMS is complete and compliant with the standard form.
2. The levy estimates for both the administrative and capital works funds are adequate to meet the actual expected expenses for the scheme’s first year.
3. This certification must be served on the owners corporation at least 14 days prior to the first AGM.

Statutory Penalties and Compliance

The 2026 reforms carry significant weight. Developers who fail to provide compliant documentation or meet the 14-day disclosure window face penalties of up to $11,000, with additional daily fines for ongoing breaches. For committees, these penalties serve as a powerful lever to ensure the developer provides the necessary information to manage the scheme effectively.

Practical Implications for the Strata Committee

Verifying the handover, the committee’s role at the first AGM is to ensure the lawful and orderly transfer of governance. This involves:

• Audit of Disclosure: Confirming that the IMS and the independent certification report were received within the statutory 14-day window.
• Assessing Independence: Verifying that the certifying surveyor has no disqualifying connection to the developer or original owner.
• Levy Adequacy: Using the certified report to challenge any initial budget that appears insufficient for the building’s operational reality. 

Mitigating Post-Completion Risk

A flawed IMS or an inadequate initial budget is often the reason for a building defect dispute or a financial shortfall. By insisting on strict adherence to these new standards, committees can protect themselves from the large special levies that has plagued many new developments.

Complex Strata Specialists

Our legal team specialises in the alignment of development obligations with long-term strata management requirements. 

Whether you are a developer seeking to discharge your statutory duties or a committee member looking to verify that your scheme has been handed over in accordance with the law, we provide the technical expertise to help navigate these changes.

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

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

Thank you for your support throughout 2025. We wish you a wonderful, safe, and happy holiday season. Please note below our office hours during this period.

Holiday Office Hours

Our office will be closing from 5.30 pm Tuesday 23rd December 2025 and reopening at 9 am on Monday 12th January 2026.

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In a recent ruling, NCAT’s Appeal Panel has confirmed that a former lot owner is not entitled to sue an owners corporation for damages in NCAT. This ruling clarifies that former lot owners can only take legal action against an owners corporation to claim damages in a Court.  The ruling also has broader implications about the limits of NCAT’s jurisdiction to entertain claims made by former lot owners.

Background

There has been a surge in claims made by lot owners against owners corporations for damages. Those claims typically arise as a result of defects in the common property which allow water to leak into and cause damage to a lot. Typically, a lot owner sues the owners corporation for damages to claim compensation for financial losses they suffer as a result of the water ingress and damage, including loss of rent or alternate accommodation expenses where the lot becomes uninhabitable, costs to repair damage caused to the lot and other expenses such as legal costs and experts’ fees.

Jurisdiction

Those claims are brought by lot owners under section 106(5) of the Strata Schemes Management Act 2015 (Act) which gives them a statutory right to claim damages from an owners corporation for a breach of the duty to repair common property. NCAT has the power to award damages under section 232 of the Act on the application of an “interested person” including a lot owner.

The Case

In the recent ruling, NCAT’s Appeal Panel confirmed that a person who is a former lot owner at the time they take legal action against an owners corporation in NCAT claiming damages is not an “interested person” as a result of which the person does not have standing to sue the owners corporation in NCAT for damages.  The Appeal Panel confirmed that, where a lot owner suffers damages, for example, as a result of defects in the common property that allow water to leak into and cause damage to their lot, but the lot owner subsequently sells their lot, the former lot owner is only entitled to sue the owners corporation for damages in a Court, not NCAT.

Conclusion

This case clarifies that owners who sell their lots and then want to sue their owners corporation for damages must make that claim in a Court and not in NCAT. The case also has broader implications.  It likely means that, for example, an owners corporation cannot seek orders in NCAT against a former lot owner, for instance, orders to require a former lot owner to repair damage they cause to the common property by carrying out unauthorised renovations whilst they were a lot owner. The recent ruling provides important guidance on the limits of NCAT’s jurisdiction to determine claims between owners corporations and former lot owners.

Case: Griffinchuk No. 1 Pty Ltd atf Giffinchuk Family Trust v The Owners – Strata Plan No. 92745 [2025] NSWCATAP 273.

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

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

The Strata legislation sets up a democratic system under which the majority rules. This means that owners in the minority generally have to accept decisions made by the majority of owners, even if they disagree with those decisions.

But that does not always have to be the case.  A recent decision of the Supreme Court provides a good example of how an owner in the minority can gain control of an owners corporation.

The Case

Mr Khatib owns a residential lot in a strata building in Bankstown, Sydney. Mr Khatib installed an awning on the common property of the building without the consent of the owners corporation. Mr Khatib applied to NCAT for an order to create a by-law to retrospectively approve the awning. He was successful.

On 2 July 2025, the owners corporation appealed against NCAT’s decision to the Appeal Panel of NCAT.

Mr Khatib did not want the appeal to proceed.  Four owners including Mr Khatib requisitioned an Extraordinary General Meeting of the owners corporation and put forward a motion for the owners corporation to withdraw the appeal. On 17 July 2025, the motion to withdraw the appeal was passed by 8 votes to 7. Mr. Khatib voted in favour of the motion. But that is not where the appeal ended.

Supreme Court Decision

Mr Zheng is another lot owner in the building and the secretary and chairperson of the owners corporation. He was aggrieved by the decision made at the Extraordinary General Meeting for the owners corporation to withdraw the appeal. On 12 August 2025, Mr Zheng applied to the Supreme Court for permission to conduct the appeal on behalf of the owners corporation. Mr Zheng was successful and was granted permission on behalf of the owners corporation to conduct the appeal to its conclusion or settlement.

The Obstacle

The reason Mr Zheng needed to obtain permission from the Supreme Court to pursue the appeal on behalf of the owners corporation is because of a well settled rule that a company (or, here, an owners corporation) is the proper plaintiff to take legal action in respect of a wrong done to it as a result of which an individual member of the company (or, here, a lot owner) has no standing to take legal action in respect of that wrong.

However, there is an exception to that rule which relevantly, allows a lot owner to bring legal action on behalf of an owners corporation where justice requires that to occur.

The Supreme Court concluded that justice dictated that the exception to the operation of the rule should apply because without Mr Khatib’s vote the motion to withdraw the NCAT Appeal would have been defeated and to give the motion effect would result in Mr Khatib’s own vote would bring the litigation regarding his contentious awning to an end where a significant proportion of the owners voted to continue the appeal.

The Court reserved (and did not decide) the question of whether the owners corporation should indemnify Mr Zheng for the costs he would incur to conduct the appeal on behalf of the owners corporation until after the appeal was determined.

Conclusion

The case demonstrates that, in some circumstances, owners who are in the minority have to accept decisions that are made by the majority and can take control of the affairs of the owners corporation in an appropriate case.

Another example of where it would normally be appropriate to permit an owner to pursue appeal proceedings in NCAT on behalf of an owners corporation is where NCAT appoints a compulsory strata manager to manage the affairs of the owners corporation and that compulsory manager refuses to authorise an appeal against his or her own appointment.

Case: Zheng v The Owners – Strata Plan No. 83678 [2025] NSWSC 1038.

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

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