Failed Common Property? What it means for NSW Lot

With more and more residents in NSW and Australia buying into strata apartments, there are many common strata problems to be mindful of. One such issue is the maintenance of the common property.

Under Section 106 of the Strata Schemes Management Act (SSMA) 2015, an owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation. Lot owners may recover expenses and damages from the Owners Corporation because they've failed to repair and maintain common property.

In the case of a NSW strata lot owner, Mr Vickery, he experienced water penetration and subsequent water damage to his apartment due to poorly maintained common property.

Section 106 (5) grants an owner of a lot in a strata scheme the right to “recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation.”

The owners corporation breached this obligation and Mr Vickery was awarded $95,000 damages by the NSW Consumer and Administrative Tribunal (NCAT) for lost rent.

Under Mr Vickery’s case, claims for damages under section 106 must only be brought before a court of competent jurisdiction (Local, District or Supreme Court of NSW).

Usually, any common strata issues like the obligation to repair or maintain common property, insurance claims or disputes with adjoining properties including fences, walls and trees can be simply resolved by communicating with the owners corporation, strata manager or by mediation. They can also be resolved by adjudication or hearing in the NSW Consumer and Administrative Tribunal (“NCAT”).

Moving forwards, any damages claims for breach of section 106 (1) must now be supported by detailed evidence that complies with the court rules and NCAT is not bound by the rules of evidence in this division.

It is also important to note that under Section 106 (6), “An owner may not bring an action under this section for breach of a statutory duty more than two years after the owner first becomes aware of the loss.”

What does this decision mean for NSW Strata Apartment Owners?

Based on the case by Mr Vickery, the unintended result is:

  • the Tribunal does not have the power to order an owners corporation pay a lot owner damages for breach of the owners corporation’s duty to maintain and repair common property under section 106 of the SSMA. Instead, the lot owner will need to commence proceedings in the Courts; and
  • If a lot owner has experienced loss or damage due to the owners corporation’s breach of section 106 of the SSMA and requires repairs to the common property affecting their lot, they will need to commence two separate proceedings, first in the Tribunal for an order to rectify the defects to the common property and Court proceedings claiming damages.

Have questions about damage claims due to poorly maintained common property? Speak to the talented team at The Strata Collective today.

The Strata Collective

Level 3, 3 Spring St
Sydney, NSW 2000

Ph: 02 9137 2320

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SCA NSW Strata Community Awards 2018
«Small Business Award»

Congratulations to The Strata Collective and Principal, Rod Smith for winning such a prestigious award.

See the full story and photos here.

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