Section 106 in the Context of Section 260 of the Strata Schemes Management Act 2015

One Section of the Strata Law that any Strata Manager 'worth their salt' will know is Section 106 of the Strata Schemes Management Act 2015 (SSMA 2015). The information contained within Section 106 is essential for all owners of strata title properties to know. Following is the information contained in full.

SSMA 2015 - 106 Duty of Owners Corporation to maintain and repair property

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.

An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation.

This section does not apply to a particular item of property if the owners corporation determines by special resolution that:

  • it is inappropriate to maintain, renew, replace or repair the property, and
  • its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.

If an owners corporation has taken action against an owner or other person in respect of damage to the common property, it may defer compliance with subsection (1) or (2) in relation to the damage to the property until the completion of the action if the failure to comply will not affect the safety of any building, structure or common property in the strata scheme.

An owner of a lot in a strata scheme may 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.

An owner may not bring an action under this section for breach of a statutory duty more than 2 years after the owner first becomes aware of the loss.

This section is subject to the provisions of any common property memorandum adopted by the by-laws for the strata scheme under this Division, any common property rights by-law or any by-law made under section 108.

This section does not affect any duty or right of the owners corporation under any other law.

What this means is the Owners Corporations must maintain common property always. This is an absolute requirement. There are two extremely important additions to this section of legislation from the old Section 62 of SSMA 1996:

  • Building defects claims are arguably a valid reason to delay repairs to common property under Section 106(4). This relief should be treated with caution by Owners Corporations so as not to impact owners use of their lot;Section 106(5) 'opens the door' for owners to make damages claims against Owners Corporations for not completing repairs resulting in damages to an owner or a resident due to a failure to act on maintenance to the building.
  • Section 260 does provide some relief by providing officers of the Owners Corporation and Strata Committee for 'any matter or thing done or omitted' provided it was 'in good faith'. Despite this, the Strata Collective Management Team strongly suggests all Strata Schemes take advice from their insurance broker about the appropriate level of insurance cover, including advice on Strata Committee insurance (office bearers liability cover).
  • In addition, Strata Committee's would be ill advised to sit on repairs to common property items unless they had an extremely good reason to delay. The Strata Collective team expects that the industry will see more Owners Corporations being taken to NCAT by owners due to delays in actioning common property repairs that impact one or more lots (or even common property).

For guidance on your specific situation, please speak to your Strata Manager at The Strata Collective.

The Strata Collective

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Sydney, NSW 2000

Ph: 02 9137 2320

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