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Strata Law – Lot Owners claiming their losses due to the Owners Corporation’s obligations to maintain the common property
Strata Law – Lot Owners claiming their losses due to the Owners Corporation’s obligations to maintain the common property
06/01/2019
Imagine this situation. Some years after the apartments are built, you buy a well-presented strata apartment in Sydney and you commence to live in it. You enjoy the large outdoor space and the proximity to parks and the leafy outlook, plus the short ride to work in the city.
However you find that in the first year of living there that during moderate rain, storm water has penetrated through your bathroom floor and flooded the apartment. There is water damage to the carpets in the living areas and bedrooms and to cabinets and curtains. You are perturbed about the flood and contact the Strata Manager (on behalf of the Owners Corporation) to ask them to investigate the problem. The Strata Manager sends around a plumber who says there is nothing wrong with the plumbing in the building.
However the flooding occurs again after another six months. The apartment is flooded once again. You again request the Strata Manager to investigate however the Strata Manager does not do so on the basis that a plumber has already stated that there is nothing wrong with the plumbing in the building.
The situation is not remedied and in the next few years you have another three floods which cause more damage to your apartment, its fixtures and fittings. You become ill and notice a strong smell in the unit. After discussing the matter with Watson & Watson, experienced Strata Solicitors, they engage appropriate experts who establish that the hydraulic plumbing design is inadequate to cope with the moderately severe rain events that occur regularly within Sydney. At Watson & Watson suggestion, a Mould expert is engaged. The Mould expert advises that the moisture from the floods over the years has caused mould infestations in the walls, carpets, light fittings and cabinets and recommends that all of these items must be removed and replaced. Furthermore it is a danger to your health to live there until this replacement work is completed. You have no choice but to move out and rent another property.
The Owners Corporation advises you that they have discovered that stormwater enters the unit through an inlet which on the original design was part of the external balcony which is now enclosed. No approval was sought or given for such a change, which was by a predecessor in title or maybe the original builder/developer.
Watson & Watson thereafter provide the Expert evidence as to the cause (design defect) and failure to rectify to the Owners Corporation and request the Owners Corporation to repair the defective work and cause allowing water ingress, before you can move back in to your apartment.
The Owners Corporation continues to deny any responsibility however, eventually engage a consultant who agrees that extensive work has to be undertaken to protect the apartment from water ingress during moderate storms and recommended works to the common property at the cost of approximately $200,000. Eventually, the Owners Corporation undertakes significant works to prevent water ingress.
The recent storms was a good test of those works for which the Owners Corporation is responsible for losses and damages as a result of failure to undertake the required works.
The Owners Corporation had refused to accept any responsibility for any of the losses suffered by the Lot Owner. This is consistent with the view adopted by many Owners Corporations and Strata Managers.
However you have incurred a large financial loss including the cost of renting when you were unable to live in the apartment and the cost of replacement of cabinets, curtains and carpets.
How do you recover your losses?
A recent case conducted by Watson & Watson provides some of the answers. In that case the owner had suffered a loss caused by flooding due to inadequate plumbing. The owner wanted to recover her losses. The losses comprised damage to property and accommodation expenses. Watson & Watson commenced a civil suit in the District Court for breaches of the law of nuisance, negligence and statutory obligation to recover that lost money.
The claims for nuisance and negligence comprised allegations that the Owners Corporation owed the unit owner a duty of care to prevent flooding from the common property (that is the plumbing and stormwater systems) to the owner’s lot. The owner alleged the Owners Corporation had breached that duty of care.
The claims also comprised an allegation that the Owners Corporation had a duty to maintain the common property pursuant to section 109 of the Strata Schemes Management Act, 2015 (SSMA 2015). The SSMA Act 2015 provides that an owner who suffers damage as a result of a failure to maintain common property may recover the loss caused by that failure as damages. Having regard to timing issues not all cases will have the same outcome.
A recent case in the NSW Court of Appeal, namely the case of McElwaine v The Owners Strata Plan 75975 (McElwaine Court of Appeal Case) decided in September of 2017 confirmed that a lot owner who suffered loss due to a breach of section 109 by the Owners Corporation could sue the Owners Corporation in nuisance, negligence and/or for a breach of statutory obligation if the facts supported the appropriate breach.
On behalf of the Lot Owner proceedings were commenced in the District Court and with our client, we assembled and prepared the necessary evidence which was filed in court. A copy of the evidence was thereafter served on the Owners Corporation. Following the receipt of this evidence after negotiation with the solicitor appointed by the Owners Corporation, the Owners Corporation agreed to pay to the owner its losses, caused due to the flood damage. As a result, the case was settled favourably (in excess of $200,000) for the owner. This is one of a few cases which is now possible since McElwaine Court of Appeal Case was decided in September 2017.
Watson & Watson Solicitors are specialists in strata law and building law and can assist you to resolve disputes or if necessary act on your behalf in strata and building law court or tribunal proceedings. If you find yourself in a position where you have purchased a new strata unit or property which is plagued by water ingress/mould issues and need assistance to resolve the matter, please contact Richard Watson Senior Strata Solicitor or his Personal Assistant Shereen Da Gloria to discuss your concerns. The earlier advice is sort the earlier the matter can be resolved.
This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 02 9221 6011.
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13/01/2021
Many people live in buildings which are subject to Strata Schemes. Those buildings consist of varying sizes from a two Lot strata scheme to townhouses in a Strata Scheme and small and large apartment complexes. Various Owners own a Lot within the Strata Scheme. The Lot is defined by reference to the Strata Plan and the laws applying to Strata Schemes. All parts which are not part of the Lot are common property owned by the Owners Corporation. The Owners Corporation consist of all the Lot owners.
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06/01/2021
For many years there have been strata laws which will allow buildings to be subdivided so that within the same building separate lots can be separately owned. A strata complex consists of various lots which are specified on a Strata Plan. There is also common property which is property which does not form part of any particular lot. There are many disputes in relation to what is common property and what other rights and obligations of each lot owner and also the Owners Corporation.
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18/03/2020
Watson & Watson were approached by the Owners of an apartment in a Harbour front Strata Apartment Complex consisting of six units. There is one unit on each floor and each unit faces the Harbour.
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05/03/2020
Often we receive enquiries from Lot Owners where it appears that the Owners Corporation are taking a very hard line against a particular Lot Owner which is inconsistent with the approach adopted by the Owners Corporation generally throughout the strata building.
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10/02/2020
Our advice to clients last year to avoid commencing damages claims in the Tribunal for breach of duty by Owners Corporations has been shown to be wise, with a further Decision of the Appeal Panel on 15 January 2020, following on from the Decision in October 2019 that we reported in our article published earlier this month.
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04/02/2020
In a decision late last year, a Senior Member of the Tribunal made orders declaring a by-law harsh, unconscionable and oppressive, and ordering the Owners Corporation to remove it from the date of registration.
The by-law excluded pets, and had its application to “Angus”, a 13-year-old miniature schnauzer that the Owners of a Lot had acquired as a pet nine years before they bought into the scheme.
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15/01/2020
Strata buildings are subject to the Strata Schemes Management Act 2015 (“SSM Act 2015”) and the Strata Schemes Development Act (“Development Act”).
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17/12/2019
The Civil and Administrative Tribunal (NCAT) is a Tribunal which deals with different types of applications, referred to it by various legislation. Cases which are brought before the Tribunal are subject to the provisions of the Civil and Administrative Tribunal Act 2013 (NCAT Act) and the Civil and Administrative Tribunal Rules 2014 (NCAT Rules). As with most claims that are heard, there are time limits in which you can bring a claim. There are many statutes which specify limitation periods.
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18/11/2019
The general rule relating to disputes is that each party should be heard in relation to a dispute before any Orders are made. However where there is an urgent need for an Order against a person or entity in the absence of that person, a Court or Tribunal may have power to make such order.
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04/09/2019
The NSW Civil and Administrative Tribunal (“NCAT”) has jurisdiction and functions as may be confirmed by the NSW Civil and Administrative Tribunal Act (the NCAT Act). The jurisdiction of NCAT is wide and varied. However one needs to find the authority for NCAT to deal with the matter in a particular Act.
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09/04/2019
In 2016 the legislation in relation to Strata Schemes changed. At that time the new strata statute in NSW came into force, which was the Strata Schemes Management Act, 2016.
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14/11/2018
In New South Wales the Strata Schemes Management Act 2015 (SSMA 2015) sets out the framework for resolving strata disputes. It provides that parties to disputes can lodge applications to the NSW Civil and Administrative Tribunal (NCAT) to resolve those disputes.
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07/11/2018
On 30 November 2016 the new strata schemes regime came into operation in New South Wales. This was set out in the Strata Schemes Management Act, 2015.
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16/10/2018
Under the strata schemes legislation in New South Wales, the Owners Corporation can apply to the New South Wales Civil and Administrative Tribunal for Orders that a lot owner provides access so the Owners Corporation can carry out work.
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07/09/2018
It is often the case that developers build multi unit apartment blocks and then the purchasers discover that the building work is defective. The usual remedy that purchasers have to recover the cost of rectification of the defects is to sue the builder who carried out defective work.
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30/08/2018
The Strata Schemes Management Act 1996 was the NSW legislation which applied to Strata Schemes up until November 2015. That legislation under section 65A provided that if a lot owner wanted to add to or alter the common property, the lot owner could only do so if a Special Resolution had first been passed at a General Meeting of the Owners Corporation that authorised that work.
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15/08/2018
Often lot owners wish to change or renovate their units which generally involves some connection and changes to the common property.
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10/08/2018
The Strata Schemes Management Act 2015 (SSM Act 2015) has come into force which includes Part 7 which relates to by-laws. In essence the by-laws set out the rules applicable to the owners of various lots and the Owners Corporation and others in a Strata Scheme.
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09/08/2018
By-laws are fundamental to the operation, the rights and obligations of the Owners Corporation, lot owners, occupiers and others for the good management of the Strata building.
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06/08/2018
Sometimes by-laws are proposed and/or passed due to a difficult situation that arises. They can sometimes be proposed and/or passed without careful consideration of the overall and collateral effect.
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01/08/2018
The Strata Schemes Management Act 2015 (SSM Act 2015) has introduced a requirement that the Owners Corporation prepare and implement a plan of anticipated major expenses to be met from the Capital Works Fund for a period of 10 years.
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06/04/2018
We refer to our article 1 December 2015 relating to the appointment of a Compulsory Strata Manager to exercise the functions of the Owners Corporation such as when an Application is made to the New South Wales Civil and Administrative Tribunal (NCAT) by a lot owner(s) when the lot owner(s) is of the view that the Owners Corporation is not functioning properly.
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03/04/2018
Unfortunately there are thousands of cases involving Lot Owners in disputes with the Owners Corporation as to the obligations of the Owners Corporation. One of the areas of great dispute is the loss to Lot Owners due to the Owners Corporation’s failure to properly maintain the property.
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27/03/2018
The Owners Corporation raises money to undertaken their obligations which include for example, the maintenance of the common property (namely all property other than the individual Lots).
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23/02/2018
The Strata Schemes Management Act 2015 (SSM Act 2015) has now come into effect and there are various cases dealing with the operation of that Act.
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09/02/2018
One would have thought that the rules relating to costs would be simple. Unfortunately they are not. Each commentary that we have reviewed has dealt with costs without consideration of the whole of the provisions relating to costs. Assumptions have been made which do not always apply.
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20/01/2018
When one buys a unit, townhouse or villa in New South Wales, one usually acquires an interest in a Strata Scheme. Strata Scheme lots are covered by Strata Scheme Management legislation such as the Strata Schemes Management Act, 2015 (SSM Act 2015) in New South Wales.
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08/01/2018
From December 2016 there has been a change to the strata laws since the introduction of the Strata Schemes Development Act 2015 (SSD Act). This Act refers to the obligations and processes that apply in relation to strata renewal process, by way of collective sale or redevelopment of the strata.
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19/12/2017
From 30 November 2016 there has been a change in the strata law with the introduction of the Strata Schemes Development Act 2015. This act refers to the obligations and processes that apply in relation to strata renewal process, by way of collective sale or redevelopment of the strata.
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19/09/2017
In a recent case decide by the NSW Civil and Administrative Tribunal (NCAT) in August 2017 NCAT ordered that the Owners Corporation pay the Lot Owner $55,943.24 due to the failure of the Owners Corporation to properly maintain the common property. This was essentially to cover loss of rent suffered by the Lot Owner.
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07/09/2017
Watson & Watson commercial litigation Solicitors, in particular in relation to building defects, building disputes and building issues are experienced and can provide you with cost efficient advice.
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17/08/2017
Every person who has purchased a unit which has been renovated will have an issue as to who is responsible for any losses, damages etc if something goes wrong with the building works.
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15/08/2017
There are many thousands of home units in Sydney which are within the Strata Scheme. Many of the units are relatively new and there are many older style blocks of units. Strata title units have been in existence for more than 50 years.
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12/07/2017
A recent Supreme Court case highlighted a difficulty for Owners Corporations which bring cases against Builders or other parties. The recent case of the Owners Corporation – Strata Plan 64415 v Serman decided that it was possible that a Defendant to a claim bought by an Owners Corporation may obtain in the appropriate circumstances, an order that the Owners Corporation provide security for costs as a precondition of the Owners Corporation proceeding with its case.
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05/07/2017
Generally, the Owner’s Corporation enforces breaches of the by-laws by an individual lot owner in the strata scheme.
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09/06/2017
The model rules on keeping of pets provide as a first option that it is possible for owners or occupiers of lots to keep animals so long as those owners or occupiers give written notice of their intention and they make sure the animal stays within the lot, is supervised on common property and the owner cleans up common property areas if required.
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06/06/2017
In late 2016, the NSW government introduced new laws regarding smoking. The laws allow a strata scheme to adopt new “model rules” covering these topics.
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17/03/2017
Recent Amendments from December 2016 makes it easier for Lot Owners to recover losses due to failure by Owners Corporation.
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21/02/2017
There have been very extensive changes to the Strata Laws as from 30 November 2016.
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28/07/2016
In the decision of Thadani the Owners Corporation Strata Plan 46619 [2015] NSW CATCD 153 Senior Member Meadows ordered that the Respondent the Strata Owners Corporation pay a pecuniary penalty in the amount $5,000. The Owners Corporation had failed to comply with an Order made against it to correct a Building Defect to the common property causing damage to an individual lot.
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21/07/2016
The rules and legislation governing strata law provide that in some cases, a Lot Owner can request that a Compulsory Strata Manager be appointed to a Strata Scheme. In order to have such a manager appointed, one must make an application to the New South Wales Civil and Administrative Tribunal (“NCAT”).
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14/07/2016
Often we at Watson & Watson experienced Strata Lawyers receive enquiries from Owners within a Strata Plan, the Owners Corporation or Strata Managers as to what can be done when the Owners Corporation is not functioning properly.
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07/07/2016
Owners of Lots in Strata Schemes often want to carry out work on their unit or townhouse. This article concerns the approvals required to carry out the work.
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21/12/2015
Strata laws were first introduced in New South Wales in the 1960s and now most units and townhouses or other community accommodation are Strata and are subject to the Strata Schemes Management Act 1996 as is amended from time to time.
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14/12/2015
Liability not limited to cost of repair Lot Owner may have claim for losses.
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01/12/2015
Right to appoint Strata Manager in place of the Executive Committee and Owners Corporation - Section 162 Strata Schemes Management Act 1996.
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10/08/2015
Attached is a letter from the Department of Fair Trading to the Principal, Richard Watson seeking his views on the drafting of the Strata Schemes Development Bill 2015 and Strata Schemes Management Bill 2015 before they are introduced into the NSW Parliament. If you wish to make any Submissions in respect of these Bills, you should send your Submissons to policy@finance.nsw.gov.au by 12 August 2015.”
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01/11/2010
Watson & Watson strata lawyers can help the owners of strata lots and Owners Corporations and executive committees resolve disputes involving defective building works by the original developer or other building contractors including disputes with builders, subcontractors, consultants, architects and engineers where the building work is faulty either by way of faulty work or faulty material or inappropriate design and other related issues.
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03/10/2010
Watson & Watson’s building and construction lawyers have many years of experience resolving building disputes, including those relating to work undertaken within a Strata Scheme.
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01/10/2010
When you buy strata title property you automatically become a member of the Owners Corporation (or the Body Corporate).
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30/09/2010
“Some small light has been shed on the whether legal costs can be included in a suit by an owners corporation for strata dues.” “An owners corporation should include in any action for contributions an amount for costs…and should be ready ay any contested hearing to provide an estimate of its costs…”
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20/09/2010
A Section 109 Certificate is a certificate issued by the Owners Corporation of a Strata Scheme, containing detailed financial information about a specific ‘lot’, and information about the management of the scheme.
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01/09/2010
Watson & Watson have lawyers experienced with strata titles and other multi ownership of property such as company titles with over 20 years experience handling strata matters, ranging from those that arise within residential strata schemes, commercial strata schemes and industrial strata schemes and company title ownership. Watson & Watson act for Owners Corporations, Strata Managers, strata title property owners, and developers of strata properties.
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