Sharma v Hoque [2026] NSWCATAP 198 (24 June 2026) is not a strata case. But it may have an important strata consequence of which to be aware.

The Legal Trap: Landlord Liability for Common Property Defects

The Appeal Panel has reaffirmed that a landlord may remain liable to a tenant under the Residential Tenancies Act 2010 (NSW) (RTA) even where the relevant defect that the tenant complained about relates to common property which is the owners corporation’s responsibility to repair, replace or maintain. The same conclusion was previously reached by the Appeal Panel: see McCartney v Wood [2023] NSWCATAP 131 [77]-[79].

Section 63 of the RTA requires the landlord to provide and maintain the premises in a reasonable state of repair. Section 44 of the RTA permits an excessive rent order where goods, services or facilities provided with the premises are reduced or withdrawn or given the state of repair of the residential premises.

That matters for owners corporations I Case study: Sharma v Hoque

In Sharma, the tenants recovered rent reductions from the landlord for various defects, including a gas and water leak, balcony leak, faulty intercom, air conditioning and lift issues.

The landlord argued that some of these matters were “strata” issues and were outside of landlord’s control. The Tribunal and the Appeal Panel rejected that argument. The Appeal Panel held that a landlord may be in breach of the obligation to repair the residential premises even where delay in doing so is caused, or partly caused, by an owners corporation.

The Strata Impact: Passing the Financial Loss to the Owners Corporation

The strata point is this: where an owners corporation breaches section 106 of the Strata Schemes Management Act 2015 (NSW) (SSMA) by failing to repair common property, and that breach causes the landlord to become liable to the tenant, the landlord may have a claim against the owners corporation.

Section 106 of the SSMA and Statutory Duty

Section 106 of the SSMA requires an owners corporation to maintain and keep common property in good and serviceable repair. It also gives a lot owner a right to recover, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of the owners corporation’s breach of that strict duty. The current limitation period under section 106(6) is six years from when the owner first becomes aware of the loss.

Forecasting the Chain of Loss

A rent reduction or a compensation order made in favour of a tenant may therefore become part of the landlord’s loss. That loss may not be remote merely because it is first suffered by the tenant.

In some cases, it may be foreseeable that, if common property defects affect a rented lot in a strata scheme, the tenant may seek rent reduction or compensation from the landlord. It may be equally foreseeable that the landlord may then look to the owners corporation if the underlying cause was an unremedied common property defect.

Key Takeaway for Strata Managers and Owners Corporations

Owners corporations should not assume that delay only exposes them to repair and remediation orders or to loss of rental income. Delay in rectifying common property may create a chain of financial loss. Where a rented lot is affected, that chain may run from the tenant to the landlord, and then back to the owners corporation under section 106 of the SSMA.

Owners Corporation Responsibilities: Beyond Strata Law

Sharma is not new law. But it is a useful reminder that disputes about an owners corporation’s duty does not sit neatly inside strata law. A failure to repair common property can have consequences for tenancies, and those consequences may become recoverable loss in a later section 106 claim against the owners corporation.

Have a Strata Dispute – Speak to the Experts.

Need Expert Strata Law Advice?

Whether you are navigating a complex dispute or looking to protect your scheme, our specialist NSW and Sydney strata lawyers are here to help. We provide clear, practical advice on all aspects of strata law, including by-laws, building defects, and levy collections. Call our team on 02 9562 1266 or email us here today.

A lot owner has an apartment in a strata scheme with shared facilities with a pool, sauna and gym however the owner does not live in that strata scheme because they have rented their apartment out – can they still use the pool, sauna and gym, deemed as shared facilities?

The answer may not be that straight forward and raises many questions:

• They have rented out their apartment, but the lot owner still pays the levies so wouldn’t they be entitled to use the shared facilities?
• Even though the lot owner still pays the levies have they signed their rights over to the tenants for use of the shared facilities once they lease the property?
• Can the lot owner prohibit their tenants from using the apartment facilities thereby by doing so, the owner can have complete access to the facilities as after all they pay the levies?
• Perhaps the lot owner can still use the facilities, unless there is a specific by-law which prohibits them from using the shared facilities?

The answer is typically this:

• When an owner leases their lot, they also lease their interests in the common property to their tenant.
• This means the owner forfeits his or her right to use the common property facilities such as the pool, sauna and gym.
• In some cases a shrewd owner might change the lease to reserve to the owner the right to continue to use the common property facilities.
• It is unlikely this would be legally effective because an owner’s interest in the common property cannot be dealt with separately from, or severed from, his or her interest in their lot.
• However, an astute owner could decide not to lease out part of the lot such as storage room or one of two car spaces. In doing so, the owner could retain his or her interest in the common property and the right to use the common property facilities.

Do you need to review your by-laws?

In some cases it can be very useful to put in place a by-law that makes these rules clear to ensure that common property facilities are not overused.

NEED TO UPDATE YOUR COMMON PROPERTY FACILITIES 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

Tenants, Building Defects, NCAT and Rent Relief

In a recent case, a property manager failed to inform a landlord of defects in the common property of a strata building and take any steps to investigate issues that a tenant had complained about.

The tenant applied to NCAT for a rent reduction as the landlord had breached their obligation to keep the rented premises in a reasonable state of repair as water leaked into the premises. The tenant was successful.

Who Could be Liable?

If a tenant claims rent relief from NCAT due to defects in a strata building, it’s important to note that NCAT could deem that it is the responsibility of the:

• Landlord who could lose rent (or worse) if they do nothing;
• Property manager if they fail to fix defects in the premises that they are authorised to repair following a tenant’s complaint in a timely manner;
• Property manager if they have not advised the landlord of defects (where they are not authorised organise repairs) following a tenant’s complaint;
• Owners corporation who could also be held liable for a landlord’s loss of rent.

A Timely Reminder for Managing Agents!

Ensure your professional indemnity insurance is current;

• Ensure your professional indemnity insurance is current
• Obtain landlord consent on a minimum amount for repair works which can be dealt with without the landlord’s approval;
• Allocate sufficient resources to attend to repair requests in a timely manner to avoid issues which could lead to court proceedings;
• Request that any common property defects are promptly repaired by the owners corporation;
• Ensure that the relevant strata by-laws for the apartment block are up to date to minimise your risk

Here we share some cases…

• https://www.caselaw.nsw.gov.au/decision/18261da0208ae3ceaf03173b
• https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWDC/2019/9.html

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.