An owners corporations duty to maintain and repair defective common property in NSW is likely to undergo a major change if the proposed Building Compliance and Enforcement Bill 2022,NSW is passed by the NSW Parliament and becomes law.

The major changes are designed to give the NSW Building Commissioner Mr David Chandler draconian powers to force owners corporations to fix common property defects.

What are the New Powers Under the Bill?

The new powers under the Bill includes:

• A right to enter a strata scheme to inspect and investigate defects
• Organise and undertake destructive testing
• Forcing people associated with strata schemes to answer questions in writing
• Issue compliance notices
• Accept compliance undertakings
• Issue search warrants
• Applying to the Land and Environment court for restraining or remedial orders

The proposed changes will allow fines to be issued to owners corporations who are in breach of the Commissioner’s orders to a maximum of $22,000 and $2,000 per day for any continuing breach.

Consultation on the proposed bill ends on 25 November 2022 and if the bill is passed it will give the Building Commissioner more muscle against those owners corporations who fail to recognise that the duty to maintain and repair defective common property is an immediate duty that cannot be delayed or suspended.

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.

Following the tragic fire at the Grenfell Tower in London in 2017 and the fire at the Lacrosse Building in Melbourne in 2014, new laws have been made for buildings with combustible cladding.

Under the Regulation, owners of certain buildings with external combustible cladding are required to register their building with the NSW Government through the simple, user friendly NSW Cladding Registration portal.

To avoid missing the deadline register here now. 

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

At the commencement of 2018 the new strata building bond and inspection scheme started.

The strata building bond and inspection scheme is designed to incentivise developers ensuring that there is a clear process for builders to minimise any building defect issues in new residential high-rise strata blocks.

 Proposed regulations and Amendments

Proposed amendments to the Strata Building Bond and Inspection Scheme have recently been announced.

Currently, under the scheme developers are required to lodge a bond of 2% for residential and mixed-use high-rise strata buildings of 4 or more storeys.

The proposed amendments to the strata building bond and inspection scheme seek to enhance the ability of Fair Trading to verify the building contract price (on which the 2% building bond is based) and to clarify the role of the building inspector in the scheme.

So, what are the specific proposed amendments?

• Developers must lodge a building bond before applying for the occupation certificate (rather than at any time before an occupation certificate is issued, as is currently required)
• The owners corporation and the developer must agree on the amount to be released from the bond to meet the costs of fixing identified building defects. If they cannot agree, the Secretary will determine this amount
• New investigative powers for Fair Trading to enable verification of the amount of the contract price or building bond, including new entry to premises and search warrant powers
• An increase in the maximum penalty for a developer failing to lodge the building bond from 200 penalty units ($22,000) to 10,000 penalty units ($1.1 million)
• An offence for developers to provide false or misleading information to the Secretary in relation to the contract price or the building bond
• A new ‘good faith’ liability protection for building inspectors, and the professional associations that appointed them, which excludes them from liability for anything done (or omitted to be done) in ‘good faith’ in conducting an inspection

 Have your say!

The deadline to have your say on the proposed Bill and/or Regulation amendments is 11 May 2018, visit NSW Fair Trading to have your say.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

The Supreme Court has ordered an owners corporation suing its former lawyers to give security for the costs the lawyers will incur defending the case and has halted the case until the owners corporation does so.

In Court cases, the loser is normally ordered to pay most of the winner’s costs.  But what happens if the eventual winner is fearful that the loser will not be able to pay its costs?

Is there anything the winner can do to halt the case before it incurs substantial costs fighting the case?

This decision is a game changer.  Read on to find out why… Owners Corporation Security Costs for Building Defects

For strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

Fair Trading NSW has confirmed that the 1 December 2014 commencement date for the NSW Home Building Amendment Act 2014 has been delayed to 2015.

The amendments will commence in two stages:

Stage 1:
It is anticipated that the critical change surrounding statutory warranties will commence mid-January 2015. The critical change to the warranties will be a shift from “structural defect” (which is the current position) to a warranty which will only cover a building defect which is a “major defect”.

If the defect is categorised as a “major defect” it will enjoy a 6 year warranty otherwise any defect which is not a major defect and/or a non-major item will only have a warranty for 2 years. The new definition of “major defect” will be more restrictive than the current definition of a “structural defect”. The new amendments will have retrospective effect.

Stage 1 will also have other amendments commencing mid January 2015 and they are as follows:

1. For the first time, statutory warranties will be implied into subcontracts entered into by the principal contractor who undertakes residential building work. These changes will allow an owners corporation to enforce warranties as a successor in title against subcontractors.
2. If a defect arises due to an owners defective design or specification the builder will not be held liable for that defect.
3. Within 6 months the owner must notify the builder and the subcontractor of a defect. If the owner fails to do so such a failure may result in the reduction of any damages.
4. Owners must not unreasonably refuse access to a builder who wishes to rectify the defect.
5. Courts will be required to give priority to rectification orders as opposed to monetary orders.

Stage 2:
This stage will involve the provisions that relate to re-drafting of contracts. The contracts will have to comply with the amending legislation hence these will be dealt with in the second quarter of 2015.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

1 December 2014 the home building legislation in NSW will change. The changes to the legislation may mean that some owners corporations will lose all of their rights to make claims for building defects.

• 34 Days until 1 December 2014!
• Do not get caught out!
• The time to act is now!
• Have your buildings inspected by a building consultant to check for defects!
• Avoid losing your rights to make a building defect claim!

At JS Mueller & Co we work with a number of reputable building consultants and engineers. We can organise a building inspection for any building that you manage to check for defects before the 1 December deadline.

But you must act quickly otherwise you may run out of time.

If you would like to discuss the changes to the NSW home building legislation or have JS Mueller & Co organise a building inspection, please contact us now on the details below.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

Today, 8 October 2014, the High Court of Australia in the case of Brookfield Multiplex Limited –v- Owners Corporation Strata Plan 61288 & Anor [2014] HCA36 unanimously allowed an appeal by Brookfield Multiplex Limited from a decision of the Court of Appeal of the Supreme Court of NSW holding that Brookfield, the builder of a strata title apartment complex, did not owe a duty of care to the owners corporation of the complex to avoid causing financial loss resulting from latent defects in the common property.

The judgment of the High Court now confirms once and for all that generally the only claim available to an owners corporation for building defects is a claim for breach of statutory warranties under the NSW Home Building Act 1989.

Prior to this High Court decision, owners corporations were entitled to sue for breach of statutory warranties under the Home Building Act and also for breach of duty of care, i.e. in negligence at law.

Unfortunately, the High Court has now held that in general an owners corporation can only sue for breach of statutory warranties, but cannot sue a builder in negligence for a breach of duty of care because the builder does not owe a duty of care to the owners corporation.

For further commentary on this recent judgment of the High Court of Australia please view the following links:

1. Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 & ANOR
2. Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 [2014] HCA 36 (8 October 2014)

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

What should you be aware of?

On 9 May 2014 the Home Building Amendment Bill 2014 was introduced to the Legislative Assembly of the New South Wales Parliament. It passed that House on 14 May 2014.

The object of the Bill is to amend the Home Building Act 1989 (“HBA”) in connection with matters including:

• Penalties for unlicensed work;
• Contracts to do residential building work or specialist work;
• Contracts to supply kit homes;
• Statutory warranties implied into contracts;
• Provisions relating to contractor licences, supervisor certificates and tradesperson certificates including broadening the grounds for disqualification;
• Notification of insolvency, winding-up or de-registration of licence holders;
• Owner building;
• Resolution of building disputes;
• Disciplinary proceedings;
• Home warranty insurance;
• Owner builder kit homes and requirements for obtaining contractor licences;
• Other minor consequential or ancillary matters.

The HBA is an act with which strata title lawyers need to be familiar. Building defects are one of the largest areas of complaint from those living in strata schemes in this state. Unfortunately for those practicing in the area, the HBA is one of the most frequently amended pieces of legislation in New South Wales.

The emphasis of this paper is on the amendment of those areas of the HBA which are most commonly used by strata lawyers. This paper is not designed as a general overview of the HBA and the amendments and assumes a basic knowledge of the HBA from a strata perspective.

Click here to download the full paper Home Building Act Amendment

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.