Renovations causing damage to other lots and its consequences

17/08/2017

Every person who has purchased a unit which has been renovated will have an issue as to who is responsible for any losses, damages etc if something goes wrong with the building works.

Our experience is that there are thousands of cases dealing with damage to property as a result of bad building practices.

When there is damage there is usually a right for breach of statutory warranties subject to the proceedings being commenced within the limitation period against a Builder and/or Developer.  Even with this right there have been thousands of property owners left out of pocket due to bad building practices.

Why in those circumstances is there so little consideration given to the indemnity that the owner of a lot gives or is required by the Owners Corporation in relation to building works undertaken at a unit?

There are protections that you can put in place.

We advise purchasers of their obligations pursuant to the particular by-laws in relation to renovation works carried out at their property or other property at the time of purchase.  As a result of our advice given, some purchasers have not proceeded with the proposed purchase of units having regard to the risk associated with the ownership of those particular units.

It appears to us that even though the risk may be relatively low that an owner will be called upon to make good and pay the losses of other parties pursuant to the indemnity.

The consequence of any defective work undertaken as part of the renovations may be disastrous for an owner.  We have recently received instructions in relation to claims on an indemnity given for example, where a person has purchased a unit which had been renovated.  A by-law applied whereby the previous lot owner gave an indemnity for losses to the Owners Corporation as a result of the renovation.  The new owner even though he did not undertake the building works is responsible for those losses.  We have also received instructions in relation to claim by the owner of an upstairs unit claiming against the owner of a downstairs unit undertaking renovation works where those renovation works caused damage to the structure in the unit above.

If you have purchased a unit or are intending to purchase a unit which has been renovated and are unsure as to your responsibilities we recommend that you contact Richard Watson our experienced Strata Lawyer, who can provide appropriate advice in relation to these onerous issues and put your mind at ease.

Please telephone Richard Watson or his Personal Assistant Shereen DaGloria to make arrangements to discuss the matter.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 02 9221 6011.