Lots Owners have an extended period of time (from 2 years to 6 years) to make claim against the Owners Corporation for damages under Section 106 of the Strata Schemes Management Act 2015

19/09/2025

Watson & Watson are experienced Lawyers having advised continually for many years on building and construction and strata issues. 

We refer to various recent Articles following the changes to the Strata Schemes Management Act 2015 allowing claims by Lot Owners, as a result of the failures of the Owners Corporation to repair and maintain common property.

We refer to our Article dated 11 September 2025, which relates to a case in which the Lot Owner for whom we acted, received a significant award and costs.  This related to a claim which was commenced by us on behalf of the Lot Owners within the limitation of 2 years that applied at that time. 

Limitation Period Extended from 2 years to 6 years

From 1 July 2025, the limitation period has been extended from the initial 2 year period to a 6 year period.  One needs to consider what is the starting date for this limitation period to apply.

The limitation period under Subsection 106(6) of the Strata Schemes Management Act 2015 (“SSM Act 2015”) starts from the date “the Owner first becomes aware of the loss”. 

Currently the leading case is The Owners – Strata Plan 74232 v Tezel (“Tezel”) decided by the Supreme Court of Appeal of New South Wales in March 2023.  We refer to our separate Article dated 13 April 2023 for an explanation of the interpretation of Section 106(5) and (6) of the SSM Act 2015.

To recap

Under subsections 106(1) and (2) of the Strata Schemes Management Act 2015 (SSMA) an Owners Corporation of a strata plan has a duty to:

(1)      “properly maintain and keep in good and serviceable repair the common property and any personal information vested in the Owners Corporation” (s 106(1) of SSMA); and

(2)      “renew or replace any fixtures and fitting comprised in the common property and any personal property vested in the Owners Corporation” (s 106(2) of SSMA).

(which we refer to as Owners Corporation’s Statutory Duties)

Subsections 106(3) and (4) set out some specific qualifications to the Statutory Duties.

Subsection 106(5) states that a Lot Owner may recover damages from the Owners Corporation for “reasonably foreseeable loss suffered by the lot owner” resulting from an Owners Corporation’s contravention of the Statutory Duties under subsections 106(1) and (2).

Section 106(6) now provides the limitation period during which a Lot Owner has to commence proceedings against the Owners Corporation for a breach of the Statutory Duties, stating:

“(6)     An owner may not bring an action under this section for breach of a statutory duty more than 6 years after the owner first becomes aware of the loss”

Despite the recent amendment to Section 106(6) of the SSM Act 2015 changing the limitation period from 2 years to 6 years, one still needs to prepare the case properly:

Factual Investigation Required at Early Stage

It is critical that a factual investigation be undertaken to determine the starting date and consequently, to ascertain the last date for a Lot Owner to lodge a claim against the Owners Corporation, for the Owners Corporation’s failure to properly maintain and repair the common property, as a result of which the Lot Owner may recover from the Owners Corporation as damages for breach of statutory duty, any reasonable foreseeable loss suffered by the Lot Owner, as a result of breach by the Owners Corporation.

The Relevant Question

The relevant question is when did the Lot Owner first become aware of the loss, having regard to the interpretation of Section 106(5) entitling a Lot Owner to recover, which is subject to establishing the elements of the cause of action and other related matters.

The changes in the limitation period does not of itself change what investigations, enquiries and steps are required to prepare for a case if not resolved.

Evidence Required

Great care is required to establish the factual matters and to act appropriately in considering and determining the limitation periods and establishing the proof of the damages for breaches of the statutory warranty for reasonably foreseeable loss, suffered by the Lot Owner as a result of the Owners Corporation’s failure.

One needs to always keep in mind that cases are decided by the Court or New South Wales Civil & Administrative Tribunal (NCAT) on evidence and what a party to the proceedings can prove, by appropriate evidence.

It is critical that the appropriate evidence be obtained at the earliest possible time to enable you for example as the Lot Owner, to establish the facts which the Lot Owner relies upon to establish the claim.

Similarly, the Owners Corporation should investigate the matter at the earliest possible time to enable the Owners Corporation to establish the facts and the appropriate action required.

What are the provable facts? 

This will require “evidence” in the appropriate form which a Court or NCAT will accept to enable it to make a Determination in your favour. 

One needs to consider that.  There is a critical distinction between evidence that can be provided by a person who is a “lay witness” and the basis of Expert evidence (and Opinion) that can be provided by an appropriate “Expert”.

Contact Us

Contact us if you are a Lot Owner who has suffered losses or is likely to suffer losses as a result of failures by the Owners Corporation to properly maintain and/or repair the common property resulting in damages from loss in light of the requirement for the loss to be reasonably foreseeable. Similarly contact us if you are an Owners Corporation who has an issue as to your obligations and responsibilities.

At Watson & Watson our experienced Strata Lawyers can assist Owners Corporations, Strata Managers and Lot Owners to understand the law and attempt to resolve disputes in all matters pertaining to Strata Schemes whether they are residential or commercial.  Failing resolution Watson & Watson will act in your best interests to achieve the best outcome in the circumstances of the dispute.

Obtaining timely advice is important. Do not delay, please contact Richard Watson, Law Society Accredited Specialist in Commercial Litigation in the stream of Building and Construction or by contacting his Personal Assistant Shereen Da Gloria to discuss your important matter sooner rather than later.

The above in our view, is not based on your particular factual matters and it is critical that one considers the factual matters and the law that applies to your circumstances. The above is not to be taken as legal advice to be relied upon, without first contacting Richard Watson as referred to above.

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