Strata Building not constructed in accordance with the Registered Strata Plan

07/02/2022

Recently we received instructions from the Owner of a Lot who had purchased a strata title home unit.  The strata complex contained 32 separate residential Lots.  There were 2 separate 4 level buildings with 4 units on each level.  The configuration of the 4 units was the same on each level.

On each level, there are 4 units adjacent to each other with the corridor from which a door opened into each of the 4 units. 

Our client had purchased the unit and later became concerned as to the high levies that she was paying for a small unit in the block. 

We made enquiries and obtained a copy of the Sales Brochure and the Strata Plan.  We ascertained that the size (by floor plan) of the unit as disclosed on the Sales Brochure was significantly (about 25% less) less in the size as disclosed in the Strata Plan. 

We investigated further and ascertained that there had been some correspondence between the previous Owner of our client’s unit and the Owner of the adjacent unit.  It seemed from this correspondence, that the adjacent unit was significantly larger than as disclosed on the Strata Plan.  We ascertained the combined measurement for the two separate units (Lots) were similar in size as ascertained by a review of the Strata Plan. 

The two units were the middle two units on the second floor of one of the buildings.

What appeared to be the case was that the dividing wall between the two units was not as disclosed in the Strata Plan.  We considered possible alternatives as to how this could have occurred.

One of the alternatives was that somebody had in the past, changed the dividing wall between the two units by in effect, excluding one of the internal rooms which was originally in our client’s unit from that unit and added it to the adjacent unit. 

Thereafter we obtained documents from relevant authorities to attempt to ascertain what could have occurred.

The development creating the strata units was a conversion of the two old blocks of flats into strata units.  It became clear that the development to convert the original flats to strata units did not include any extension of the external dimensions of the two original building however included the refurbishment of the existing flats, with the result that the internal size of each level in the strata building was the same that existed in the original flats. 

A view of the building indicated that there had been no change in the exterior of the two blocks of flats other than refurbishment. 

However there were no new openings in the original building and the structural walls within each of the units, were at the same location as they were in the original block of flats. 

The issue related to the two middle units on the floor and how the dividing wall between those two units seemed to be in a different position to where that wall would be if the construction had been in accordance with the Strata Plan.  In other words, one of those two middle units was smaller than as shown on the Strata Plan and one was larger than as shown on the Strata Plan. 

After further enquiry and view of the building, we ascertained that the issue that arose between our client’s unit and the adjacent unit appears to have been mirrored on each of the levels within each of the two blocks of units.  In those circumstances, it appeared that 16 units were affected with the same issue namely, 8 of those units were constructed smaller than as disclosed on the Strata Plan and 8 of those units were constructed larger than as disclosed on the Strata Plan.

Thereafter there were further investigations and we ascertained that there was a significant delay from the date of certification of the Strata Plan and the date of registration of the Strata Plan.

This may explain that the renovation in part of the original 2 blocks of units occurred after the preparation of the Strata Plan.  The internal wall which actually divided the two units was not the actual wall as disclosed on the plans which was utilised to prepare the Strata Plan.

This seemed to be the only feasible explanation and this hypothesis is consistent with the date of the documents reviewed by us to ascertain what had occurred.  This was an appropriate explanation was to why the actual unit purchased by our client (as disclosed in the Sales Brochure) was smaller than the size as indicated by review of the Strata Plan. 

We note that over a period of approximately 30 years since the refurbishment of the units and the registration of the Strata Plan there had been many sales and nothing had been done in an attempt to rectify the issue.

The question that arose was what alternatives were available to our client.  There appeared to be 3 possible alternatives, namely:

1. Sell the unit.
2. Keep the unit and do nothing which would necessitate paying the strata levies as issued from time to time; or
3. Consider an application for a review and adjustment of the unit entitlements in particular, in relation to the affected Lots.

Our client carefully considered her position and in light of her circumstances, did not wish to take any action to seek to adjust the unit entitlements. 

This is one of the few circumstances in which an appropriate adjustment in unit entitlements in accordance with the limited provisions of the Strata Schemes Management Act for adjustment of unit entitlements would in our view, have been appropriate and successful. 

Please contact us if you have issues in relation to any strata matter.  Please contact the specialist Lawyers at Watson & Watson by contacting Richard Watson Senior Strata Lawyers and Accredited Specialist in Commercial Litigation specialising in building and construction stream or by contacting his Personal Assistance Shereen Da Gloria to discuss your important matter.

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