There are more than 85,000 strata schemes in NSW with approximately one in seven NSW residents living in strata apartments and it’s estimated by 2040 this will grow by 50 percent in Greater Sydney!

So, it’s no suprise that the number of people living in strata applying to NCAT for orders to resolve strata disputes has significantly increased by 45% over the last 5 years.

Cases related to water leaks, delays in fixing leaks and claims for compensation for rental loss have played a major role in the growth of NCAT cases.

In this article we take a closer look at the responsibility of an owners corporation to repair common property water leak damage.

The Duty to Repair

Section 106 of the Strata Schemes Management Act 2015 (Act) imposes on an owners corporation a duty to:

(a) properly maintain and keep in a state of good and serviceable repair the common property;

(b) where necessary, renew or replace any fixtures or fittings comprised in the common property.

This duty requires an owners corporation to fix any defects in the common property that are allowing water to leak into a lot.

The Nature of the Duty to Repair

The duty of the owners corporation to maintain and repair common property has been considered in a number of cases.

In those cases, the Supreme Court and NCAT has said that the duty to repair common property:

(a) is compulsory;

(b) is absolute; and

(c) is not a duty to use reasonable care to maintain and repair common property or to take reasonable steps to do so but a strict duty to maintain and keep in repair.

This means that an owners corporation cannot delay any repairs that need to be carried out to fix defects in the common property that are causing water to leak into a lot.  Even if it is impossible to find contractors who are available to repair those defects, that does not provide an owners corporation with a lawful excuse for delaying any necessary repairs to common property.

Other Aspects of The Duty to Repair

There are other aspects of the duty to repair common property that are often overlooked particularly in the case of new buildings or where a tenant damages common property.

The Supreme Court and NCAT have held that the duty to repair common property:

(a) extends to require the remediation of defects in the original construction of the building;

(b) must still be fulfilled even if the owners corporation did not cause the damage to the common property which needs to be repaired.

This means that, in general, an owners corporation cannot blame an original builder or developer for defects in the common property and refuse to fix them.  However, if the owners corporation takes legal action against a builder or developer in respect of defects in the original construction of the common property, then the owners corporation can put on hold its obligation to repair common property defects.

Further, the cases say that even if a person damages the common property, in general, the owners corporation must still repair that damage, even though it may have a right to recover the cost of that repair from the offender.  Alternatively, under section 132 of the Act, the owners corporation can apply to NCAT for an order to require an owner or occupier to repair damage to the common property caused by them.  It appears that if the owners corporation takes legal action against an owner or occupier in NCAT to obtain that order, that allows the owners corporation to put on hold its duty to repair the damage.

Anything Else?

The duty to repair the common property also requires the owners corporation to carry out repairs which are not for the benefit of the majority of owners.  Indeed, the owners corporation is obliged to carry out repairs to the common property that only benefit a single owner.  This means that an owners corporation cannot refuse to repair a leaking window on common property on the basis that the leak only affects one lot.

Is there an Escape Route?

There are generally two ways for an owners corporation to relieve itself from its duty to repair common property (apart from the ways we have discussed above).

First, an owners corporation can pass a special resolution at a general meeting to determine that it is inappropriate to repair a particular item of common property.  This can be done under section 106(3) of the Act but only if the decision will not affect the safety of the building or detract from the building’s appearance.

Second, an owners corporation can make a common property rights by-law that transfers its responsibility for the repair of a particular item of common property to one or more owners.  The by-law needs to be approved by a special resolution at a general meeting.  However, the by-law also needs to be approved by the owners who will be responsible for repairing the item of common property under the by-law.  Often it proves difficult to obtain the consent of those owners.

What about Compensation?

Inclement weather can cause a substantial increase in claims for compensation being made by owners against owners corporations who have failed to repair defects that have allowed water to leak into and cause damage to lot property.  Typically, those claims are made by investor owners for rental loss when the damage to their lots become so severe that the lots are uninhabitable.  But compensation claims can also cover alternate accommodation expenses if an owner occupier is forced to move out of a lot due to damage caused by water ingress, the costs an owner incurs cleaning and repairing lot property (e.g. replacing saturated carpet), experts’ fees and legal costs.  The liability of an owners corporation to pay compensation to an owner is a strict one.

This can make it difficult for owners corporations to defend compensation claims that are made by owners as a result of common property defects that allow water to leak into and damage lot property. Indeed, one Court has remarked that this puts an owners corporation into the position of an insurer.

Conclusion

Even though it may be difficult to find contractors who are able to repair common property defects, that does not provide an owners corporation with a lawful excuse for delaying essential repairs and maintenance.  The duty to repair is a strict one and there are limited exceptions to that rule.  This emphasizes the importance of proactive and ongoing building maintenance to help avoid the problems that many owners corporations are now encountering.

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.

Common Property and Water Leaks

NSW has received a significant amount of rainfall over the last 18 months which has led to an increase in the number of claims made by lot owners against owners corporations in regards to common property and water leaks.

These claims can be challenging and difficult for an owners corporation to defend but a recent decision by the NSW Court of Appeal provides a glimmer of hope.

Here we share the case… A Glimmer of Hope for Owners Corporations

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 winter fast approaches lot owners and tenants ‘cosy up’ their apartment environments with heat creating condensation (moisture) and reduced ventilation – a damp environment that mould loves to thrive in.

Rain during the winter months can also contribute to the increased mould growth in strata buildings and may cause dangerous health issues for owners and tenants as they’re more likely to stay indoors.

Who is responsible for mould in a strata property?

It depends on the location of the mould, and what initially caused the mould to develop. Sounds simple, but the challenge is to work out who organises and pays for the problem to be fixed.

In this article we look at:

1. What is mould?
2. What are the harmful effects mould can have on your health?
3. What are the causes of mould in strata living?
4. Who pays for the mould to be fixed in strata living?

1. What is mould?

Mould is a type of fungi that produces tiny spores which settle on indoor and outdoor surfaces. When the mould spores land on a damp or wet spot, they need a certain temperature to thrive and survive, they then begin to grow and digest the surface where they’ve landed.

Mould can destroy building materials, furnishings and cause serious health problems to people.

2. Is Mould Harmful to your Health?

Airborne mould spores are commonly found in both indoor and outdoor environments and have the potential to cause health problems as they can easily be inhaled.

Inhaling mould spores can have harmful effects on health in children and the elderly, asthmatics, and people with compromised immune systems. It can cause throat, eye and nose irritations, breathing problems and allergic reactions. Some mould can even have more serious health effects and cause chronic, obstructive, or allergic lung diseases.

Mould can also destroy clothing and household items such as mattresses and other furniture which can also cause health issues.

3. What are the Causes of Mould in Strata Apartments?

In strata apartments, mould typically grows indoor in wet or moist areas lacking adequate ventilation, including walls, wallpaper, ceilings, bathroom tiles, carpets (especially with jute backing) and insulation material such as cardboard and wood.

Some common mould problems in strata apartments include:

• Lack of adequate waterproofing allowing water to leak inside an apartment
• Burst pipes or water leaks coming from an apartment above
• Condensation in winter on walls/windows from temperature differences between heated interiors and cold exteriors
• High levels of humidity in summer and temperature differences of cold interiors and heated exteriors
• Condensation from hot showers causing mould on bathroom walls and ceilings, especially if there is no exhaust fan and/or ventilation
• Windows closed all day with lack of adequate air flow
• Strata blocks that are in shade all day and receive no or little sun

4. Who is Responsible for Mould in Strata?

 

Property Managers and Landlords

In a rental apartment situation, the  landlord is normally responsible for fixing the mould problem as the landlord is responsible for ensuring their tenant a healthy, mould-free environment.

However, if the landlord can show the mould is the result of the tenant’s inactions such as not using exhaust fans or not opening windows/doors for airflow, the tenant may be liable to compensate the landlord for damage.

Strata Managers and Owners Corporations

In strata title properties the person responsible will depend on where the mould is located and what is causing it, which can sometimes be challenging.

Generally, the apartment owner is responsible for removing the mould inside the apartment. However, if there is a defect in the common property that is the cause of the mould, such as a leaking common property pipe, the owners corporation would be responsible for fixing that defect.

Common Property
Common property boundaries of an apartment are generally defined by the floor surface and boundary walls. If mould is located outside of these boundaries the owners corporation is responsible for repairs and mould remediation costs. If the cause of the mould is within these boundaries the lot owner is responsible for repairs and costs.

Strata mould problems are often challenging to solve. In these more challenging cases it is often a good idea to engage with a strata lawyer to help resolve the issue,  and to work out who is responsible for fixing the problem, especially if it involves health issues.

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.