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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On Friday 17 December 2021, the Strata Schemes Management Amendment (Information) Regulation 2021 (the Information Regulation) was published establishing a new annual reporting requirement for strata schemes in NSW.

What does the new annual reporting requirement change mean for NSW strata?

Commencing  June 2022, all NSW owners corporations will be required to:

• Provide key details about their scheme, including building, safety and management information
• Help cover the cost of administration and enforcement of the scheme by payment of a lodgement fee of $3 per lot with their annual report
• Submit their first report within 3 months from 30 June 2022 to 30 September 2022
• Upload their report online through the Strata Hub

Further information can be found here:

• 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, and recommendations for where it can be sourced, is available here
• Guidance on the requirements set out in the Information Regulation and on how to submit the report will be provided to strata schemes in early 2022
• For any further assistance you may also contact JS Mueller & Co Lawyers here

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 this article, we take a look at The Top 5 By-laws for 2021 and discuss the trends with respect to changes to the by-laws.

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.

Deadline for New Rules for NSW STRA 

Here we explain the new rules!

The NSW government has issued a reminder that new short-term rental accommodation (STRA) rules will come into effect on 1 November 2021 coinciding with the return of regional travel across NSW.

These new STRA registration requirements follow the introduction of a mandatory code of conduct governing STRA rentals late last year.

And… most likely these new rules will also require your STRA by-laws to be reviewed!

What is the New Rule?

If you wish to rent a property as a STRA host, it is mandatory to register the property and pay the registration fee via the NSW Planning Portal by 1 November 2021.

What is the Deadline?

The deadline is Monday 1 November 2021.

What is the Cost?

STRA hosts are required to pay a registration fee of $65.00 for the first 12 months and an annual renewal fee of $25.00.

Who Does STRA Registration Apply to?

The STRA registration applies to owners of any residential accommodation who wish to rent their property out for short term rentals.

Do I Need to Provide additional Documentation to Register?

Yes, if the property is not owned by you, you must provide proof of consent from the property owner.

You must also verify that the property is in compliance with the fire safety standards as defined in the STRA policy here.*

*Please note: Given the recent lockdown orders, a grace period has been applied in relation to providing the fire safety standards.

STRA hosts will be able to register their short-term rental as required but delay the fire and safety requirement until 1 March 2022, giving STRA hosts an additional 4 months to adhere with the policy.

Where do I Register my STRA Property?

Your STRA property is to be registered here on the on the NSW Panning Registration Portal.

Do I Need to Update my Short-term Rental Accommodation By-laws?

Most likely, if you live in a strata property the STRA by-laws may need to be reviewed. For advice you may contact our experienced and knowledgeable STRA team here.

Where do I Find More Information on the New STRA Rules?

For more information on the new STRA rules visit NSW Planning STRA Portal here.

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.

As many of you are aware, from 11 October 2021, the Registrar General has announced a major step in the transition away from paper-based registration of by-laws (and other documentation) in NSW.

So, what will the changes to the land titles system in NSW mean?

Read on for more specific details in this recent NSWLRS release.

Our Dedicated By-law Registration Team

If you need assistance registering your by-laws electronically we have an experienced and dedicated by-law registration team who are ready to help you.

CLICK HERE FOR HELP WITH ELECTRONIC BY-LAW REGISTRATIONS

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.

Did you know that the NSW Government now has the power to lock down your entire strata block with just one positive Covid Case?

Apartment residents could be hit by COVID-19 laws produced by the NSW Government, which is able to lock down entire unit blocks when just one person tests positive to the virus.

The police also now have new powers to patrol buildings, quiz everyone living in – and visiting – apartments for their names and phone numbers, and order them all to take COVID tests.

In addition, any non-residents present at the time a block is locked down could be trapped in the building.

Read on for further details in this recent Sydney Morning Herald (SMH) Domain article

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.

On 25 August 2021, new strata laws commenced which changed the rules regarding pet ownership in strata buildings.

Those rules mark a shift in the NSW Government’s policy concerning pets in strata buildings and encourage pets in strata.

But the new rules create traps for young players that can have unintended consequences for those unfamiliar with them.

In this article, we take a closer look at the new laws regulating pet ownership in strata buildings and the pitfalls associated with them – Pets and New Strata Laws

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.