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.

Adrian Mueller Explains the New Strata & Community Law Reforms?

Adrian Mueller talks ‘phase 1’ of the strata law reforms, and the amendments to the Strata Schemes Management Act 2015 (NSW) below, including:

1. Transitional Period
2. Strata Renewal Process
3. Pets and Assistance Animals
4. Committees
5. Annual General Meetings
6. Financial Management
7. Notices and Record Keeping
8. Lot 2 Schemes: Consolidation of By-laws & Complying with the Act, Managing Agents and Commissions

DO YOUR BY-LAWS NEED UPDATING IN LINE WITH THE NEW LAWS?

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.

Pets, By-laws and New Legislation

In December 2023 new strata laws commenced that changed the rules regarding pet ownership, including assistance animals, in strata buildings.

What do the new pet rules mean?

• Any fees, bonds and insurances imposed by the owners corporation are now banned under the new legislation.
• It’s also now easier for lot owners and tenants with assistance animals to prove their animal’s ‘assistance’ status with less loopholes to jump through.
• Those new rules will result in some existing pets by-laws (or parts of them) being invalid and will need to be reviewed.

Pet By-laws will Need to be Reviewed!

 

 Therefore, it is time to get all pet by-laws reviewed to ensure they comply with the new laws.

CLICK NOW FOR A PET BY-LAW REVIEW IN LINE WITH THE NEW LAWS

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.

Short-term Rental Policies Under Review

As the NSW Government grapples with the housing crisis across the state short-term rental accommodation (STRA) comes under the spotlight.

Policies and framework for STRA in NSW will be reviewed with the hope to unlock the supply of long-term and affordable accommodation.

As such, the NSW government is looking for community feedback on the recently released discussion paper which will form part of the comprehensive review of NSW STRA.

Have Your Say…

• Complete the survey
• STRA discussion paper
• Further information

The survey completion deadline is 14 March 2024.

Review Your STRA By-laws

Do you need to review or update your current short-term rental accommodation (STRA) by-law? Speak to the STRA experts today!

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.

By-laws that regulate e-Bikes and e-Scooters.  

e-Bike and e-Scooter lithium-ion batteries have sparked a series of fires in strata apartment buildings and based on the following statistics* pose a major threat as they continue to rise.

• Between January 1 and September 15, 2023, Fire and Rescue NSW reported 149 battery-related incidents – a 16 per cent increase on the same time last year.
• Of these incidents, 22 per cent involved e-mobility devices — a 94 per cent increase on the same period the previous year.

All strata buildings should, before it’s too late, put in place by-laws to regulate the storage and charging of e-scooters and e-bikes to help prevent fires from lithium-ion batteries.

* October 2023 ACCC Lithium-ion batteries and consumer product safety

A BY-LAW THAT REGULATES THE STORAGE & CHARGING OF E-BIKES & E-SCOOTERS

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. 

On the 11 December 2023 the NSW strata and community title legislation changes came into effect.

If you live or work in strata or community title it is important that you are aware of the changes to the law as follows: 

Original Owners Votes

•  If a scheme comprises of more than two lots the amendments provide that the value of a vote cast by an original owner, usually a developer, of a strata scheme may be reduced.

Strata Committees

• Committee member removal now only requires an ordinary resolution and once removed they’re not eligible to be on the committee for 12 months.

• Where it is called for, an election for a committee can take place at any general meeting, not just the AGM.

• A call for nominations to the committee must be included in the general meeting notice.

• A member with a conflict of interest must be excused from voting and discussion on that matter.

Strata Managers

• Must provide notice to the owners corporation 6 months prior to expiration of their agency agreement.
• Fair Trading can recommend to NCAT that a compulsory agent be appointed to manage dysfunctional strata schemes.

Internal Funds Transfer 

• Under the amendment for internal funds transfers, the owners corporation must, within three months of the transfer, decide at a general meeting, if the funds should be repaid, and if yes, how it should be done – via a simple reverse transfer or by special levy.

Emergency Repair Levies 

• The amendments will reduce from 30 days to 14 days the time period for payment of a special levy for urgent repairs. This amendment is for necessary building repairs to mitigate any serious and imminent threats to the health and/or safety of building occupants.

Work Quotes

• Multiple quotations for works exceeding $30,000 will now be required for all schemes – small and large – Also, the comparative quotations will need to be for people or companies that are not connected with each other.

Pets

• A pet bond or fee can no longer be charged by the owners corporation.
• A by-law cannot impose unreasonable burdens on people with assistance animals.

By-laws

• Under the changes, owners corporations may consolidate the by-laws for the scheme only by special resolution – whether or not a by-law has been amended, repealed or added.
• Two lot strata schemes do not need to pass a resolution to issue a ‘Notice to Comply’ regarding a by-law breach.

Books and Records

• The strata roll and other mandatory records must now be kept electronically.

Rentals

• Rental agents will be required to give tenants and lessees a copy of a strata scheme’s by-laws and strata management statement on commencement of a lease and whenever documents are updated if they are not provided by the landlord or head tenant.
• Rental agents will have to provide the owners corporation notice that a lot has been leased or subleased if the notice hasn’t been provided by the landlord or head tenant.
• Tenants can give notice of the lease to the owners corporation if the landlord, head tenant or rental agent fails to do so. In giving notice of the lease or sublease the regulations may prescribe the documents or other evidence a tenant must provide.

Service of Documents

• The regulations may provide for the service of documents, including by prescribing additional methods of service.

Meetings

• General Meeting Notices – time period for notices increases from 7 days to 14 days.
• Company Nominees – number of votes to be limited in a similar way to the way proxy votes are limited.
• AGM – Delivery of development documents by the developer must be done 14 days before the first AGM.

Community Titles 

• Most of the above proposals will also apply to Community Title regulations.

Strata Renewals

• Allowing a strata renewal committee to operate for 2 years instead of 1 year to reflect the length of time it can take for that committee to develop a strata renewal proposal.
• Permitting the Land and Environment Court to allow a collective sale of a strata building to proceed even though some of the preliminary steps associated with the sale have not been followed correctly (eg; inadequate meeting notice periods) if that has not resulted in a substantial injustice.
• Allowing dissenting owners who do not object in good faith to have costs awarded against them (eg; where an objecting owner is a developer who is trying to obstruct a collective sale to another developer)

More information

NSW Government – https://www.nsw.gov.au/media-releases/critical-reforms-to-strata-laws

Amendment Bill – https://www.parliament.nsw.gov.au/bills/Pages/bill-details.aspx?pk=18511

Timeline – https://www.parliament.nsw.gov.au/bill/files/18511/SPI%20-%20Strata%20Legislation%20Amendment%20Bill%202023.pdf

CLICK HERE NOW FOR STRATA REFORM ADVICE

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. 

As Summer Heats up so do the air conditioning complaints!

Summer is here and it’s predicted to be a hot summer season with temperatures in the high 30’s and some days even reaching 40’s.

It’s the time of year when lot owners and tenants look to install and use air conditioners to relieve themselves from the oppressive heat.

Did you know air conditioners are high on the list for strata disputes?

Air conditioners can cause all types of complaints in strata such as:

• What if the noise of the unit upsets the peace and quiet?
• Who’s responsible for maintenance?
• What if the unit leaks water into another apartment?
• Is it in line with the appearance of the lot?
• and much more!

A Good By-law Addressing Air Conditioning Units is Important

For these reasons it’s important that you have a good by-law in place regulating the installation and use of them  that covers the following (and much more):

• What type of air conditioning equipment is appropriate?
• Where can the unit be installed?
• Will council approval be required?
• Will owners corporation approval be required?
• Will it be installed on common property?
• Will a by-law be required for individual lots, or can it be covered under a general by-law?

A good by-law will ensure that your summer is as stress free as possible and reduces (and hopefully eliminates) any strata disputes in relation to air conditioners.

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.

EV Charging – Grant Funding Deadline

Owners Corporations considering installing electric vehicle charging infrastructure in the strata scheme should be aware of the availability of grants from the NSW State Government to assist owners corporations with at least 10 apartments to install EV charging infrastructure in a common area.

The process takes place over two steps.

Step 1 – Feasibility Assessment

Owners corporations which believe they may be eligible can make application for a feasibility assessment.  The cost for an owners corporation making an application is $2,000.00 plus GST.  The New South Wales Government will cover any other part of the cost of the assessment process.

To be eligible, your strata scheme must:

• be located in NSW;
• be a registered strata scheme under the Strata Schemes Development Act 2015;
• contain 10 or more apartments as a class 2 building;
• have a private and/or common property visitor (or shared) off-street common property parking as part of the strata scheme;
• have no more than 4 EV chargers already installed (for buildings with less than 40 apartments) or no more than 10% of the number of parking spaces for buildings over 40 apartments;
• be able to implement EV charging infrastructure upgrades that can be accessed by all residents.

Step 2 – Grant Implementation

If the Step 1 feasibility assessment report is positive then the owners corporation will be invited to apply for Step 2 of the grants.

The owners corporation  will firstly need to meet for the purpose of passing some necessary motions and to empower the strata committee to obtain quotes for the Step 2 works.  Once those quotes are obtained then they are submitted together with some other documentation to the New South Wales Government for review, and once approved then the owners corporation can proceed to installation.

The government will fund 80% (up to $80,000.00 per building) of eligible infrastructure costs and will also cover 50% (up to $1,200.00 per building) of eligible software subscription costs for two years.

Act Now – Limited EV Government Funding

There is $10 million available to assist eligible NSW strata schemes, but it is on a “first come first served” basis.

It is therefore critical that if your owners corporation is considering undertaking works of this kind, that you begin to consider making application for  the funds which may be available to you as soon as possible.

If your strata scheme requires assistance in any aspect of the process, for example in drafting the necessary motions to take the matter forward, then we would be happy to assist you.

We also specialise in EV by-laws should you require a new EV by-law or a review of an existing EV by-law.

Warwick van Ede I BEc LLM I Lawyer

Since 1990, Warwick has specialised in strata law, property law and litigation. Recognised for his expertise, he is also a NSW Law Society Accredited Specialist in Property Law. In 2021 he was selected to serve on the Property Law Committee of the Law Society of NSW. Profile I 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.

 

Lot Owner Claims Damages of $850 Million!

Generally we use these  bulletins for educational purposes,  but it’s getting toward that time of the year when everything goes a little crazy in the world of strata title, and so today the emphasis is on providing you with sheer relief that your strata scheme is not tied up with the sort of case in which a decision was recently made by the Supreme Court of New South Wales, where a lot owner commenced proceedings against the owners corporation claiming damages of $850 million!

The Strata Dispute Lot Owner Vs Owners Corporation

The dispute, between the occupant of an apartment located in Sydney and the owners corporation,  began life as a tenancy dispute, but the occupant (tenant), having failed to enlist the support of the NSW Civil & Administrative Tribunal (NCAT),  brought proceedings in the Supreme Court of NSW seeking among other things damages of $850 million against the owners corporation! You can imagine the insurer’s claims manager when that came through…

Needless to say, the proceedings in the Supreme Court of NSW were, to use the words of the Supreme Court Judge dealing with the final version of the proceedings, “frivolous and vexatious” and an abuse of the process of the Court.  Notwithstanding this, the plaintiff lot occupant filed applications of various kinds in the proceedings, made scandalous allegations against the owners corporation’s legal representatives, court officials and even a judge of the Court.

At the heart of the lot occupant’s claim was the suggestion that the owners corporation had somehow been involved in a criminal conspiracy which allegedly caused the plaintiff loss and damage.

Finally, on the sixth application before the Court (some of those applications being interlocutory applications for stays, injunctions and applications for recusal of various judges) the entire application was dismissed and the lot occupant was ordered to pay the owners corporation’s legal costs on an indemnity basis.  This means that the owners corporation was entitled to recover from the lot occupant not only the normal (“party/party”) costs but almost all the legal costs it had expended in having to deal with this application.

Conclusion

So as we head towards the end of the year, and if you are experiencing stress due to the matters which your owners corporation has to deal with, just remember – at least you haven’t been served with a law suit for $850 million!

If you do have issues in your strata scheme JS Mueller & Co Strata Lawyers have the experience and ability to assist you in dealing with these issues, whether they are disputes relating to the operation of the committee, questions about property and renovations, dealing with adjoining land owners and more please contact us on the details below for further assistance.

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Warwick van Ede I BEc LLM I Lawyer

Since 1990, Warwick has specialised in strata law, property law and litigation. Recognised for his expertise, he is also a NSW Law Society Accredited Specialist in Property Law. In 2021 he was selected to serve on the Property Law Committee of the Law Society  of NSW.  Profile I 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.

The NSW Strata Reforms Phase 1

The NSW Government is moving ahead with phase one of the reforms to strata laws providing benefit to those living in strata. The first phase includes:

• Providing transparency – with collective sales and renewal processes
• Removing restrictions on pets – residents with pets will no longer be required to pay fees, bonds or for insurances for the joy of having a pet
• Requiring multiple quotes – ensuring competitive pricing is obtained for goods and services
• Giving Fair Trading approval to ask NCAT – to appoint compulsory strata managing agents to help manage dysfunctional strata schemes

Some Significant Changes…

Some of the more significant changes include:

Strata Committees

• Committee member removal now only requires an ordinary resolution and once removed they’re not eligible to be on the committee for 12 months
• Where it is called for, an election for a committee can take place at any general meeting, not just the AGM
• A call for nominations to the committee must be included in an AGM notice
• A member with a conflict of interest must be excused from voting and discussion on that matter

Strata Managers

 Must provide notice to the owners corporation 6 months prior to expiration of their agency agreement.

• Fair Trading can recommend to NCAT that a compulsory agent be appointed to manage dysfunctional strata schemes

Meetings

• General Meeting Notices – time period for notices increases from 7 days to 14 days
• Company Nominees – number of votes to be limited in a similar way to the way proxy votes are limited
• AGM – Delivery of development documents by the developer must be done 14 days before the first AGM

Quotations

• Multiple quotations for works exceeding $30,000 will now be required for all schemes – small and large

Pets

• A pet bond or fee can no longer be charged by the owners corporation
• A by-law cannot impose unreasonable burdens on people with assistance animals

Books/Records

 Must now be kept electronically

Strata Renewals

• Allowing a strata renewal committee to operate for 2 years instead of 1 year to reflect the length of time it can take for that committee to develop a strata renewal proposal
• Permitting the Land and Environment Court to allow a collective sale of a strata building to proceed even though some of the preliminary steps associated with the sale have not been followed correctly (e.g. inadequate meeting notice periods) if that has not resulted in a substantial injustice.
• Allowing dissenting owners who do not object in good faith to have costs awarded against them (e.g. where an objecting owner is a developer who is trying to obstruct a collective sale to another developer)

 More information:

NSW Government – https://www.nsw.gov.au/media-releases/critical-reforms-to-strata-laws

Amendment Bill – https://www.parliament.nsw.gov.au/bills/Pages/bill-details.aspx?pk=18511

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.