Strata Schemes - Owners Corporation potential Liabilities substantially increased if Owners Corporations fail to undertake proper maintenance and repairs of Common Property - Lot Owners now have 6 years to claim their Losses applies from 1 July 2025

30/09/2025

Obligations for Maintenance and Repairs of Buildings

We set out in our early articles dated 11 August 2025 and 18 September 2025, the consequences of the Owners Corporation failing to maintain and repair common property as required under Section 106 of the Strata Schemes Management Act 2015 (“SSM Act”). The Owners Corporation is liable to a Lot Owner for their losses in the event that the Owners Corporation fails to maintain and repair the Common Property, as a result of which, a Lot Owner suffers damages for the breach which loss is a reasonably foreseeable loss suffered by the Lot Owner, as a result of the failure of the Owners Corporation to fulfil their obligations.

Owners, Owners Corporations and Strata Managers be aware of the Extension of Time for Lot Owners to Claim Losses from the Owners Corporation’s Breach

Owners Corporations be aware, firstly of the consequences of the significant extension in the limitation period effective from 1 July 2025, in which a Lot Owner can commence a claim in an appropriate Court or New South Wales Civil and Administrative Tribunal for their losses within a period of 6 years from first becoming aware of the issue.  This is now from 6 years rather than the previous limitation of 2 years, that previously applied under Section 106 of the Strata Schemes Management Act 2015. Be aware there is a legal requirement to determine when the limitation period for the claim commences and finishes which depends upon the law and how it applies to the facts of the case.

Current Position - Owners Corporations (and Owners) be Vigilant - Take Action

In the circumstances under the current provisions of the Strata Schemes Management Act 2015 if the Owners Corporation becomes aware of the issues either due to their vigilant review of the building structure or because of notification for example, by a Lot Owner, Strata Manager or Building Manager or other person or authority, the Owners Corporation should as soon as possible, take the responsibility and investigate and ensure that they obtain the appropriate advice as to the requirements to undertake necessary works.  This includes compliance with relevant legislation including the Strata Schemes Management Act 2015 (“SSM Act”) and including the obligations under the Design and Building Practitioners Act 2020 (“DBP Act 2020”).

The DBP Act 2020 applies to Class 2 buildings including strata buildings which includes strata lots for residential occupation. 

The exposure to the Owners Corporation under the extension to 6 year limitation period for a Lot Owner to make a claim, could have very significant adverse effect on the liability of the Owners Corporation if the Owners Corporation fails to in a very timely manner, undertake the proper maintenance, repairs and upkeep so as to limit the losses claimable by the Lot Owners.

We can imagine a claim against the Owners Corporation by an Owner of a single Lot could be in the thousands of dollars and possibly over $1,000,000 for example, if the loss of rent is $2,000 per week.  The claim is not necessarily limited to 6 years losses.  What is required is that the proceedings must be commenced within the limitation period based on the Strata Schemes Management Act 2015 as now applies.

In a recent claim, we obtained orders that the loss of rent claim continues until the Owners Corporation have undertaken all the works that are required to the Lot, to rectify the defective consequential loss within the Lot. In those circumstances, we emphasise the Owners Corporation to be vigilant in considering its obligations, seeking advice and taking action in a proactive and timely manner. 

Two Recent Cases

In two recent cases decided in the last 6 months, we were successful in obtaining awards in favour of the Lot Owners from NCAT for loss of rent and cost of rectification of the consequential loss to the units.  In particular, in one recent case the Owners Corporation was required to undertake at its cost, significant works effectively to a great degree, being replacement of much of the fixtures, fittings, internal walls, rectifying the damage caused effectively from the water ingress which included significant mould issues.  In addition, the Owners Corporation was required to pay damages for our client’s significant loss of rent and costs.

Contact Us

Watson & Watson Lawyers have decades of experience in all aspects of Strata issues some which often arise and some of which rarely arise, which impact Lot Owners, the Owners Corporation or Strata Managing Agent.  We recommend that you do not delay and seek appropriate advice as soon as an issue arises, so that you are aware of your obligations, options and alternatives to enable you to make an informed decision.

Do not procrastinate, contact Watson & Watson, experienced Lawyers and Law Society Accredited Specialist Commercial Litigation in the stream of Building and Construction, by contacting us to arrange an appointment to discuss your important issues, by contacting Richard Watson Principal or his Personal Assistant Shereen Da Gloria to discuss your matter and seek appropriate timely advice.

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