Obligation of Owners Corporations to Maintain Common Property

14/12/2015

Regularly Watson & Watson receive enquiries and advise lot owners who are aggrieved due to the failure of an Owners Corporation to maintain common property.  Section 62 of the Strata Schemes Management Act places an obligation on the Owners Corporation to maintain common property.  The obligations are mandatory not optional. Action can be taken in the New South Wales Civil & Administrative Tribunal (NCAT) against the Owners Corporation for breaches of such obligations.  This is a well-known and well-trodden path to enable lot owners have the common property repaired and damages to one’s lot due to the failure by the Owners’ Corporation to maintain the common property. 

Section 62 does not of itself entitle the lot owner to recover from the Owners Corporation for its losses, for example, loss of rent or reimbursement of costs incurred by the lot owner to rectify defective work caused by the Owners Corporation’s neglect. 

However, in the recent case of McDonough the Supreme Court of New South Wales Justice Brereton confirmed that a lot owner who has suffered damage may recover losses as a result of the failure by the Owners Corporation to maintain the common property.

In that case the Supreme Court considered the claim in which a lot owner claimed her losses when she had been obliged to pay to repair her unit and also had lost rental income. 

The appropriate course if you find that the Owners Corporation has failed to maintain the common property is to take action under Section 62 of the Strata Schemes Management Act for an Order that the Owners Corporation at its cost undertake the work.  This application can be made by NCAT.  Often we receive complaints from lot owners and by negotiation in most cases we have achieved the outcome whereby the Owners Corporation undertakes the works at its cost without the need for proceedings.  In effect, it is the approach that we adopt to inform and educate the Owners Corporation and others associated as to their obligations and what will occur if the work is not carried out appropriately.  Most Owners Corporations realise the benefit of complying with their obligations.

In the MacDonough case the Judge confirmed that in addition a lot owner may recover damages for its losses as a result of the failure of the Owners Corporation to maintain the common property.  However, in that case the Judge did not go on to decide whether the Owners Corporation should compensate the lot owner; instead leaving that issue for another day.

This case is a clear reminder of the obligation of the Owners Corporation to maintain the common property and in addition risk to the Owners Corporation that in some cases will have to compensate the lot owners of their units that have been damaged because the common property has not been maintained. 

There are serious considerations as to whether a claim could or should be made for the losses.  It is critical that the Owners Corporation properly maintain the common property.  Many Owners Corporation’s consider their liability is only the cost of rectification however, there is an also a risk that a lot owner will make a claim for its losses on one basis or another. 

Watson & Watson are experienced in strata law and will provide appropriate advice gained from many years of experience as to the best course to be adopted if you find yourself either as the Owners Corporation or the lot owner being embroiled in disputes as to the proper maintenance of the property, the remedy and the way forward. 

Watson & Watson are experienced in all aspects of building and construction issues and have acknowledged expert building consultants available who can attend the site with us for a set fixed fee for an initial conference. 

Accordingly we at Watson & Watson can give an early indication of the options and alternatives to enable you to make an informed decision as to what should be done to resolve the situation that you find yourself in.

Please telephone Richard Watson for a telephone conference to enable you to consider your way forward.