Existing Claims: Statutory Warranties and Defects

On 24 August 2022, in a recent case, the New South Wales Supreme Court confirmed that an owners corporation can add to an existing claim for a breach of statutory warranties new defects that may manifest after the owners corporation has commenced its legal action.

Did You Know?

This applies, even if the warranty period for those defects has expired at the time they are added to the claim.

Here we share the recent case: A Great Win for Owners Corporations in NSW

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Tenants, Building Defects, NCAT and Rent Relief

In a recent case, a property manager failed to inform a landlord of defects in the common property of a strata building and take any steps to investigate issues that a tenant had complained about.

The tenant applied to NCAT for a rent reduction as the landlord had breached their obligation to keep the rented premises in a reasonable state of repair as water leaked into the premises. The tenant was successful.

Who Could be Liable?

If a tenant claims rent relief from NCAT due to defects in a strata building, it’s important to note that NCAT could deem that it is the responsibility of the:

• Landlord who could lose rent (or worse) if they do nothing;
• Property manager if they fail to fix defects in the premises that they are authorised to repair following a tenant’s complaint in a timely manner;
• Property manager if they have not advised the landlord of defects (where they are not authorised organise repairs) following a tenant’s complaint;
• Owners corporation who could also be held liable for a landlord’s loss of rent.

A Timely Reminder for Managing Agents!

Ensure your professional indemnity insurance is current;

• Ensure your professional indemnity insurance is current
• Obtain landlord consent on a minimum amount for repair works which can be dealt with without the landlord’s approval;
• Allocate sufficient resources to attend to repair requests in a timely manner to avoid issues which could lead to court proceedings;
• Request that any common property defects are promptly repaired by the owners corporation;
• Ensure that the relevant strata by-laws for the apartment block are up to date to minimise your risk

Here we share some cases…

• https://www.caselaw.nsw.gov.au/decision/18261da0208ae3ceaf03173b
• http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWDC/2019/9.html

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Building Defects – Who is Liable?

Can the director of a building company that is responsible for the construction of a new strata building be held personally liable for defects in the building?

The Design and Building Practitioners Act 2020 (Act) was introduced in 2020 and provides that a duty of care is owed by “a person who carries out construction work” to an owners corporation to avoid defects in the construction of the building. But who exactly is classified as “a person who carries out construction work”?

Is “a person who carries out construction work” limited to the entity that was contracted to do the work such as the builder or does it also include all persons involved in completing the project such as a supervisor, project manager and even the director of the builder’s company or the developer?

Personal Liability of Project Manager

A recent decision by the Supreme Court of NSW has found that the husband of a director of a building company was personally liable for defective building works done by the builder under the Act because he acted as the project manager and supervisor of the builder: see Goodwin Street Developments Pty Ltd atf Jesmond Unit Trust v DSD Builders Pty Ltd (in liq) [2022] NSWSC 624.

In this case, the builder was placed into liquidation and the developer brought proceedings against Mr Roberts the husband of a director of the builder.  According to the Court, Mr Roberts was a project manager of the builder, supervising construction works for the project. Therefore, Mr Roberts was found to be “a person who carried out construction work” under the Act and was found liable for the defects.

Liability of Developer

In another recent Supreme Court case, an owners corporation sued the builder and developer for damages arising from defects.

The Court found, among other things, that a developer could be held liable for defects under the Act as a person who carried out construction work.

The Court also said that under the Act, a person could be liable for defects if they could (but did not necessarily) have control of the building works: see The Owners – Strata Plan No 84674 v Pafburn Pty Ltd [2022] NSWSC 659.

Conclusion

These cases have far reaching consequences for directors, supervisors, project managers, developers and sub-contractors involved in construction work who all could be liable to owners corporations for defects under the Act, even for work done up to 10 years ago (as the Act is retrospective). However, for those persons to be liable, it must be proven that they have had or could have had some control over the building works.

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Did you know there are 81,717 strata schemes registered in NSW and every year this number grows by more than 1,000 across Sydney and regional NSW?

That’s why the NSW government has recently recognised the importance of strata living laws and the need to ensure that they stay relevant and address some fundamental issues that have arisen since the laws were re-written in 2015.

An online survey has been developed and the NSW Government is asking you to ‘have your say’ here now.

For all NSW strata legal including by-laws, building defect and levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

NSW government launches new building defects guide.

The ‘Strata Defects Rectification Guide’ has been developed as a first point of call for current and future lot owners and stakeholders such as strata managers concerned about defects.

The online tool provides vital information helping to navigate the process of identifying, documenting, reporting and rectifying building defects in strata schemes.

Access to the guide is available here Strata Defects Rectification Guide

For all NSW strata legal including by-laws, building defect and levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

There have been a number of important key changes made to strata laws over the last 6 months.

This includes changes to legislation and recent court and NCAT decisions.

In this article we provide an overview of those key changes to help you get across them and make recommendations as to what you should do get the most out of them and to ensure you comply with them.

The article covers the following strata law key changes:

• Building Defects – duty of care
• Removing abandoned goods and illegally parked cars – the new rules
• Developer and common property rights by-laws
• No pets by-laws
• NCAT – can now award damages
• COVID-19 – strata regulations extended
• Short term rental accommodation – mandatory code of conduct

The full article and recommendations are available here An Overview of Recent Key Changes to Strata Law

For all NSW strata legal including by-laws, building defect and levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

As combustible cladding is fast becoming a major focus for multi-storied buildings in New South Wales, lot owners and owners corporations are now facing a major bill and headache to replace combustible cladding.

The problem with combustible cladding has been further exacerbated by the current pandemic as a number of lot owners are unable to afford a special levy due to having lost employment. Some are even facing bankruptcy.

Despite these difficulties, some relief for combustible cladding costs has now arrived from the Australian Tax Office (ATO).

In this document we explain the recent ATO ruling to assist in rectifying combustible cladding defects… ATO Provides Relief for Combustible Cladding Costs

For all NSW strata legal including by-laws, building defect and levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

New building defects laws which commenced in June 2020 received considerable media attention.

Those laws are contained in the Design and Building Practitioners Act 2020 and impose on builders and others involved in the construction of apartment buildings a statutory duty of care to avoid loss caused by defects.

The new laws give owners corporations greater powers to make defects claims against builders and others.

However, a recent case which dealt with another statutory duty of care highlights some of the issues that will confront an owners corporation which makes a defects claim under the new laws.

In this article we take a look at that case and explain what relevance it has to defects claims that will be brought by owners corporations under the Design and Building Practitioners Act 2020.

The full case can be read here Building Defects Claim Duty of Care

For all NSW strata legal including by-law, building defect and levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

On 10 June 2020, the New South Wales Government made new laws regulating the construction of apartment buildings.

Those new building defect laws commenced on 1 September 2020 and will have a significant impact on all owners corporations and the strata industry.

In this paper we discuss the new laws and how they will impact the strata industry including:

• Occupation Certificates
• Stop Work Orders
• Rectification Orders
• Delegation of Powers
• Retrospectivity

Read the full paper here: New Laws that will have a significant impact on the Strata Industry.

For all NSW strata legal, by-law, building defect and levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

The NSW Building Commissioner, David Chandler, is asking for people to come forward with legitimate complaints about building defects – inclusive of waterproofing and structural issues.

His aim is to clean up the building and construction industry getting rid of dodgy builders. The more people that file legitimate building defect complaints the quicker this will be addressed.

Common Apartment Building Defects

•  Internal Water Leaks
• Cracking to Internal Structures
• Cracking to External structures
• Water Penetration from Outside
• Guttering Faults
• Tiling Problems
• Defective Plumbing
• Inappropriately Installed Materials
• Combustible Cladding

To lodge your building defect complaint please click here Building Commissioner

Take Your Building Defect Stress Away

Our strata lawyers have extensive experience resolving strata building defect disputes relating to work within strata and community schemes.

We firmly believe that timely and effective advice takes the stress out of strata building defect claims and will achieve the best possible result for you.

If you need assistance with any of the following please contact us now.

• Submitting Building Defect Complaints and/or Claims
• Resolving and Managing Building Defect Complaints and/or Claims
• Security of Payment Claims
• Building and Construction Litigation
• Advice on Statutory Warranty Periods
• Home Building Compensation Fund Insurance Claims
• 10-year Retrospective Building Defects Law Advice
• Assistance with Alternative Dispute Resolution
• Expert Determination
• Drafting Building and Remedial Works Contracts
• Building Bond Advice
• Cladding Defect Advice
• Home Building Act 1989 Advice

For all NSW strata legal, by-laws, building defect and levy recovery advice please contact us here or call 02 9562 1266, we’re happy to assist.