Renovation of Strata Units by Owners – Obligations and Rights - Beware of liabilities – Obtain advice before Purchasing a Unit or seeking Approval for Renovations

14/09/2021

Watson & Watson have on many occasions, advised clients who acquired a Lot subject to a by law or seek to have renovations which are subject to a by law. 

The obligations and rights relating to renovation of Units are regulated by the Strata Schemes Management Act 2015 (“SSM Act 2015”).  Work to renovate a Unit for example, a bathroom or kitchen often but no always, involves work to the common property.

Section 111 of the SSM Act 2015 provides that Owners of a Lot (Lot Owner) in a Strata Scheme must not carry out work on the common property unless the Owner is authorised under:

1. Part 6 of the SSM Act 2015 which relates to orders about property;
2. Under a by law made under Part 6 or a common property rights by law; or
3. By an approval of the Owners Corporation given by Special Resolution or in any other manner authorised by the by laws.

Section 108 of the Strata Schemes Management Act 2015 (SSM Act 2015) provides procedures for authorising changes to the common property which may be by adding to the common property, altering the common property or erecting a new structure on the common property for the purposes of improving or enhancing the common property. 

The Owners Corporation or a Lot Owner can only proceed to undertake changes to the common property if a special resolution has first been passed by the Owners Corporation specifically authorising that work. 

We refer to our article 20 April 2021 which refers to Section 108 of the SSM Act 2015.

Seek Advice prior to Purchase

Changes to the common property as part of renovations to a Unit which requires a special resolution of the Owners Corporation and usually a by law and the Consent of the Lot Owner. 

The usual by law imposes many obligations on the Lot Owner obtaining the benefit of the by law which obligations have associated risks.  Many Lot Owners who obtain the benefit of a by law or purchase a Lot which already has the benefit of a by law, are unaware of their obligations and responsibilities and the risk that come with the Lot or Unit encumbered by such by law.

Prior to purchasing a Unit, you should carefully consider any by laws that affect the Lot and become aware of your obligations as the purchaser of the Lot.

By Laws relating to Renovations on Owner’s Lot

By laws are often considered beneficial by the Lot Owners who have the benefit of them however they can also be a burden. 

Most by laws provide for the Lot Owner to indemnify the Owners Corporation and other Lot Owners in relation to any damage caused as a result of work undertaken pursuant to such a by law.

Seek advice before Undertaking Works to your Unit

If you have obtained approval for a by law to undertake work in your Unit you should take appropriate action to ensure as best you can, that the indemnity will not be called upon.  This requires great care in the undertaking of the works the subject of the by law.

The mere fact that you have engaged a Builder or other consultants to assist will not relieve you from the obligations of the indemnity given as part of the obtaining the benefit (and detriment) by way of by law.

We have on numerous occasions been instructed in relation to building works part way through construction, where the fundamental dispute is between the Lot Owner and the Builder.  The wider issue relates to the liabilities or possible liabilities as a result of undertaking the works without a by law or even if there is a by law.  On numerous occasions where we have been engaged by the Lot Owner or Owner’s Corporation in relation to the dispute between the Lot Owner and the Builder, the Lot Owner has been unaware of any obligations to others as a result of the failure of the building works. 

Accordingly before you undertake the building works you need to not only consider the Building Contract but what other obligations you have pursuant to the by laws.

Unfortunately in most circumstances, the Lot Owner does not become aware of or alert to the events giving rise to a claim until after the building work has been completed. 

At the best of times, before purchasing a Unit or undertaking renovation works you should if at all possible, consider your obligation.

If you are proposing to undertake any works at your home Unit, then it is imperative in our view, that you obtain proper advice as to the best way to protect yourself.

If you find yourself with any issues in relation to renovations works you are proposing to undertake to your Unit or works you have carried out without formal approval do not delay, please contact Watson & Watson Lawyers.  Our highly experienced Building and Construction and Strata Lawyers can assist you in relation to your project before entering into any arrangements and ensure that your project proceeds smoothly and without any delays.  Please contact Richard Watson Accredited Specialist in the stream of Building and Construction and Strata Lawyer or his Personal Assistant Shereen Da Gloria to discuss your matter and seek timely advice.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.