The Scenario

Mr Smith owns a residential lot in a strata building in Sydney.  The floor tiles in Mr Smith’s bathroom have cracked and are damaged beyond repair.  The building was constructed 30 years ago so matching replacement tiles cannot be found.  Is Mr Smith entitled to insist on the owners corporation re-tiling his whole bathroom so that the bathroom tiles have a uniform finish?  In this article we explore the answer to that question.

The Law

An owners corporation has a statutory duty to properly maintain and keep in good repair the common property and, where necessary to renew or replace any fixtures or fittings that form part of the common property under section 106 of the Strata Schemes Management Act 2015.

This duty requires the owners corporation to replace an item of common property when it is reasonably necessary to do so because, for example, the item has been damaged beyond repair: Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC425.

So what happens when tiles on the floor or a wall of a bathroom that form part of the common property are damaged beyond repair but matching tiles cannot be found.  Can the owners corporation just replace the damaged tiles doing the best it can?  Or does the owners corporation have to re-tile the entire bathroom to ensure a uniform tiled finish?

Replacing Damaged Tiles

Where tiles are damaged beyond repair and matching tiles cannot be sourced, the duty of the owners corporation is to use replacement tiles that are substantially similar in appearance, characteristics, quality and amenity to the existing tiles.  This can require the owners corporation to replace a larger section of tiles to achieve substantial similarity: Selkirk v The Owners – Strata Plan No. 2661 [2024] NSWCATAP 17.

However, this does not necessarily mean that, where matching tiles cannot be found, the owners corporation is responsible for re-tiling the entire bathroom.  There are a number of cases which make this clear.

The Cases

1. In Stolfa v Owners Strata Plan 4366 & ors [2010] NSWSC 1507 a lot owner did work which damaged five tiles on a bathroom wall in another lot. The owner of the damaged bathroom applied for an order that the other owner compensate her for the cost to re-tile the whole bathroom because matching tiles could not be found. The Court rejected that claim and was unpersuaded that such a course was reasonable, particularly in the absence of evidence establishing that a reasonably approximate matching tile, albeit not a precise match, was unachievable. The Court allowed an amount to cover the cost of re-tiling the damaged wall only.
2. In Petropoulos v CPD Holdings Pty Ltd t/as The Bathroom Exchange (No 2) [2018] NSWCATAP 233 a builder renovated a bathroom and an ensuite bathroom for a homeowner but built the shower recesses too small. The owner wanted the builder to re-tile the whole bathroom floor after enlarging the shower recesses because matching tiles could no longer be found and the owner was concerned that a patch repair would compromise the waterproofing membrane. NCAT’s Appeal Panel rejected the owner’s request and concluded that it was reasonable for the builder to attempt to match the tiles rather than completely re-tiling each bathroom. The builder was ordered to ensure that replacement tiles were of the same colour, dimensions and type as the original tiles, or if no identical replacement tiles were available, of a colour that most closely matched the original tiles.
3. In The Owners – Strata Plan No 74602 v Brookfield Australia Investments Ltd [2015] NSWSC 1916 an owners corporation sued a builder for defects. The owners corporation alleged that there were waterproofing defects in bathrooms due to incorrectly installed water stop angles as a result of which bathrooms needed to be completely re-tiled due to the difficulties in obtaining matching tiles, even though only a small number of tiles needed to be replaced. The Court concluded that this would amount to the complete demolition and reconstruction of the bathrooms which was unreasonable and unnecessary particularly as there was no evidence of water leakage from the bathrooms.
4. In SP 62930 v Kell & Rigby Holdings Pty Ltd [2010] NSWSC 612 an owners corporation sued a builder for various defects including waterproofing defects in bathrooms. The owners corporation asked the Court to order the builder to pay damages to cover the cost of re-tiling all of the bathrooms because matching tiles could not be found and owners were entitled to a uniform tiled finish in their bathrooms. The Court concluded that it would be unreasonable for an owner to insist on replacement of a large quantity of undamaged tiles at great cost if a close match could be found and installed in a place (such as an architectural break) where the joinder of the tiles would not be immediately obvious. The Court held that the floor tiles within the showers in the affected lots should be replaced, making use of an appropriate existing architectural break, and that it was not reasonable for the owners corporation to insist upon the complete re-tiling of the entirety of the bathrooms.

Analysis

These cases demonstrate that both NCAT and the Supreme Court have rejected claims for entire bathrooms to be re-tiled when a small section of tiles are damaged or defective and perfectly matching tiles cannot be found.

However, in general, the owners corporation will still need to ensure that the work it does to replace the damaged tiles achieves an acceptable aesthetic finish.  This may require the owners corporation to re-do more than just replace the damaged tiles.  It can require the owners corporation to replace, for example, one or more walls which contain damaged tiles or an entire shower recess by making use of appropriate architectural breaks.

Ultimately, each case turns on its own facts but it will often be the case that it will be unreasonable for an owner to insist on an owners corporation replacing a large quantity of undamaged tiles at great cost if a close match can be found to achieve an acceptable aesthetic finish.

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, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Is it Possible to Ban E-bikes and E-scooters?

There have been a recent spate of fires in Sydney apartment buildings caused by the charging of e-bikes and e-scooters.  Those fires have resulted in a number of strata buildings introducing by-laws to ban or regulate e-bikes and e-scooters.  But is it possible to ban e-bikes and e-scooters?

An owners corporation has a broad power to make by-laws to manage, control and administer the use of the lots and common property in its building.  This enables an owners corporation to make a by-law that stipulates what residents can and cannot do within their lots.

However, there are some restrictions on the by-law making power of an owners corporation.  In particular, a by-law cannot be harsh, unconscionable or oppressive.  Any by-law that is, is unenforceable.

In 2020, the NSW Court of Appeal handed down a ruling providing guidance on the circumstances in which a by-law will be harsh, unconscionable or oppressive.  In that case, the Court said that if a by-law prohibits an activity that is capable of being carried out in a manner that does not have a detrimental impact on the use and enjoyment of the lots and common property by residents, then the by-law will be harsh, unconscionable and oppressive.

In that case, the Court concluded that a by-law banning pets in a strata building was harsh because it was possible for residents to keep some types of pets in the building without having a detrimental impact on the amenity of other residents: see Cooper v SP 58068 [2020] NSWCA 250.

This begs the question:

Can a By-law Prohibit the Charging of E-bikes and E-scooters in a Strata Building?

The answer to that question is most likely “no”.  This is because it is possible to charge e-bikes and e-scooters without creating a fire risk or otherwise having a detrimental impact on the use and enjoyment of the lots and common property by other residents.  Indeed, any by-law that bans e-bikes and e-scooters is not likely to be enforceable.

So what are the options for any owners corporation that wants to reduce the fire risk created by the charging of e-bikes and e-scooters?  There is nothing wrong with an owners corporation introducing a by-law that restricts the right of residents to charge e-bikes and scooters.  For example, a by-law could require residents to apply to and obtain the consent of the owners corporation to charge e-bikes and e-scooters in the building.

Further, a by-law could introduce rules that must be obeyed by residents to minimize the fire safety risk created by the charging of e-scooters and e-bikes.  For instance, a by-law could stipulate that residents need to ensure that their e-bikes and e-scooters (including the lithium batteries that power them and the chargers for them) comply with the applicable Australian standards, that residents periodically monitor their e-bikes and e-scooters whilst they are being charged and residents otherwise take all reasonable steps to minimize a fire safety risk created by the charging of e-bikes and e-scooters.

Whilst it can be difficult to police by-laws that regulate the charging of e-bikes and e-scooters, doing so is not impossible and these by-laws at least give owners corporations the right to control the charging of e-bikes and e-scooters and to do something when residents disobey the by-law.

Can an E-bike and E-Scooter By-law Protect the Owners Corporation?

Further, these types of by-laws can provide the owners corporation with protection in the event that a resident disobeys the by-law and causes a fire when charging an e-bike or e-scooter.  For instance, a by-law could require the resident to indemnify the owners corporation against any property damage that is caused by such a fire and to cover the costs the owners corporation incurs repairing any damage caused by the fire.

Ultimately, the use of e-bikes and e-scooters is on the rise and this means that is now necessary for many owners corporations to grapple with the problem created by the charging of e-bikes and e-scooters.  Introducing an appropriately worded by-law is best practice and will provide an owners corporation with the greatest amount of protection to minimize the risk of a fire caused by the charging of an e-bike or e-scooter.

DO YOU NEED AN E-BIKE AND E-SCOOTER BY-LAW?

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, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

NSW Land Registry Services has announced changes to the procedure for by-law registrations which will impact strata managers. Here is an overview of the changes:

1. What are the changes to by-law registrations?

• All paper certificates of title will be cancelled
• Strata managers will no longer be able to register by-laws themselves
• All by-law registrations will need to be done through PEXA

 2. When will this take effect?

• On the 11th October 2021

3. How can we help you?

• JS Mueller & Co Lawyers is PEXA registered and approved to lodge electronic by-laws
• We were one of the first firms to register by-laws electronically
• We have over 18 months experience completing by-law registrations electronically
• We make the electronic by-law registration process easy!

If you would like assistance registering your by-laws electronically – click here.

For more information about electronic registration of by-laws visit ORG.

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 the 9 April 2021, the NSW government announced a new statewide policy for Short Term Rental Accommodation (STRA).

The commencement of this policy has been deferred to 1 November 2021.

The new STRA laws will override all short-term accommodation planning laws previously in place throughout NSW, including those enacted by local councils. (until the policy takes effect the regulation of STRA in NSW will continue to be the responsibility of local councils and owners corporations).

The NSW Government has implemented:

• a new statewide regulatory framework for short-term rental accommodation (STRA)
• fire safety standards for STRA dwellings
• a government-run STRA Register
• the STRA Code of Conduct and exclusion register that took effect on 18 December 2020

For full details of the new policy and delays please read New Delayed NSW Short Term Rental Accommodation Policy

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.

Must strata lot owners pay, as part of their levies, maintenance of the common property they do not use?

Are all strata owners responsible for paying for the maintenance of every part of the common property even if some owners cannot or do not use part of the common areas?

Is it possible for an owners corporation to raise a differential contribution that is levied on some but not all owners or is levied in shares that are not proportional to the unit entitlements of the lots?

Here are some typical examples where owners often query if they should pay for maintenance of these areas:

• A strata scheme that contains multiple stages – should they pay for stage 2 if they’re in stage 1?
• The owner of a ground floor lot who does not use a lift servicing the upper levels of the building
• The owner who does not use recreational facilities such as a swimming pool, gym or tennis court

Are these exceptions or are common areas in strata residential blocks treated as a whole?

Read this paper to find out the true position – Common Property Use and Differential Levies in Strata Blocks

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

Recent research conducted by the University of NSW lists the top 15 common building defects in strata blocks.

To deal with problems caused by defective building work in new strata buildings, the NSW Government introduced a building bond scheme which commenced on 1 January 2018.

The bond scheme will apply to many new strata buildings that are built this year.

So, what do strata managers need to know?

To help you navigate the new laws we’ve prepared this paper Building Defects Bond Scheme that covers everything strata managers need to know.

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

JS Mueller & Co Partner, Bruce Bentley talks Home Owner Warranty Protection NSW with Clive Robertson 2UE Radio.

To listen to the full 2UE Radio interview click here.

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

Should anyone who turns up to a strata meeting with a gun in their pocket be banned from ever living in a community scheme?

For those of us who have been involved in strata for a while, it’s only a matter of time when a strata meeting will turn ugly.

You’re usually dealing with some very volatile elements in any given strata scheme – it’s about people’s rights and responsibilities. There are people for whom the right to do what they want in the home that they own, goes without saying – which is rarely the right fit with a lifestyle that depends on a sense of community such as strata living.

Logic and reason can be quickly forgotten as recently seen in the news where an elderly Sydney man was involved in the shooting of his building manager during a bitter strata meeting.

Click here to view the full media article.

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

The Building and Construction Industry Security Of Payment Amendment Act 2013 is proclaimed to commence on 21 April 2014.

The Building and Construction Industry Security of Payment Act 1999 was amended by the Building and Construction Industry Security of Payment Amendment Act 2013. The amendments will not apply to construction contracts entered into before 21 April 2014. The Act applies to all construction contracts entered into by owners corporations for work on the common property.

The principal changes which affect owners corporations are as follows:

• Owners corporations will now be a principal under the main contract with the head contractor.
  A progress payment is to be made by a principal to a head contractor 15 business days after a payment claim is made or such earlier date as may be provided by the contract.
• It is no longer possible to contractually extend the period for the making of the payment.
  The contractor is no longer required to endorse a payment claim made under the Act in any way. This means that you must treat every invoice or payment claim under a construction contract or any construction arrangement as being subject to the Act.
• You will need to immediately enquire from your principal on receipt of any invoice for construction work, whether there is a dispute in relation to payment and, if there is, ensure that a payment schedule is prepared and served on the contractor within 15 business days of receipt of the invoice. Failure to do so will remove any right to withhold any part of the payment claim.
• Head contractors must now serve a supporting statutory statement with a payment claim which must include a declaration to the effect that all subcontractors have been paid.
• Failure to serve a supporting statement leaves the head contractor liable to a fine up to $22,000.00 but does not invalidate the payment claim.

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

There are two schools of thought surrounding the apparent ‘surge’ in Chinese interest in the Australian property market.

One is that the Chinese are ‘only interested in newly built properties and buildings’; the other, that this is not necessarily the case, and the Chinese are actually equally interested in land, or existing homes which they can renovate or knock down.

Whichever trend the current data leans towards, the fact is that Australia is now among the most popular property investment destinations for the Chinese, who are reported to have spent almost $6 billion in Australia’s real estate market last financial year. The driving force behind this sudden influx of foreign investment appears to be due to China’s own financial policies forcing the financially wealthy to seek better returns outside their homeland, making them the fastest growing international property buyers in both the global and Australian real estate markets.

Their interest seems to be sparking strong surges within the Australian property market and, as a result, pushing prices up in Australian capital cities − particularly Sydney and Melbourne. Incomes of the average Australian workers aren’t keeping up with the price rises, which is leaving the market open for an increasing number of wealthy overseas investors.

While Chinese buyers have been active in the Australian property market for some time, it has been during the last twelve months their investment activity has been more pronounced.

Many of these buyers have friends or relatives in Australia to bid for them, but there is no requirement for foreign investors to reside in Australia themselves, subject to the relevant provisions in the Foreign Acquisitions and Takeovers Act 1975 (Cth). This means multitudes of overseas buyers fly into Australia to inspect and buy properties they simply found on the internet.

However, purchasing investment properties in this manner poses significant problems for many of the investors, as the legal requirements surrounding foreign investment in Australia differ greatly from those affecting the domestic investment industry. Building regulations, strata laws, contracts, monetary exchanges and tenancy laws within the Australian property market can be areas fraught with challenges for the Chinese investors, as well as Australian vendors, and it is an area of law that requires specialist knowledge and experience.

“Australian property laws operate very differently to Chinese law. There are many traps for unwary Chinese investors, says strata lawyer, Clifford To.”

With over eight years’ experience in property development, town planning and administrative law, Cantonese-speaking Clifford forms part of the expert team at JS Mueller & Co and is an expert in helping Chinese investors navigate the legal minefield of property investment in Australia.

Chinese investors need to understand the way Australian property laws impact on them. Not having a proper understanding of the law can have disastrous consequences, Clifford says. ”

With a reported, 90 million Chinese searching for investment property online every month, and more than half of them purchased their properties with cash, the impact on the Australia economy is expected to be significant.

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