Who Pays the Compensation?

When an owners corporation is ordered to compensate an owner, who pays that compensation?  The owners corporation, right?  A recent decision by NCAT’s Appeal Panel produced a surprising answer to that question.

Introduction

An owners corporation has a statutory duty to properly maintain and keep in good repair the common property.  This duty arises under section 106 of the Strata Schemes Management Act 2015.  If an owners corporation does not repair defects in the common property, it will breach that duty.  Where that occurs, a lot owner who suffers monetary loss arising from that breach is able to sue the owners corporation to recover that loss.

Previous Cases

There have been a number of cases where both NCAT and the Supreme Court have ordered owners corporations to pay compensation to owners to cover their losses arising from failures to repair defects in common property that typically allow water to leak into and cause damage to lots. In those cases, owners have been awarded compensation for rental loss, alternate accommodation expenses, cleaning costs, repair costs, experts’ fees and legal costs.  But when an owners corporation is ordered to compensate an owner for those losses, who ends up paying that compensation? The answer to that question should be straightforward, right? Not so.

NCAT Case

On 30 November 2021, NCAT’s Appeal Panel handed down its decision in SP 74698 v Jacinta Investments Pty Ltd [2021] NSWCATAP 387.  In that case, an owner had sued an owners corporation for (among other things) compensation to cover the owner’s losses that arose from an owners corporation’s breach of its duty to repair common property.  The owner was successful and was awarded over $250,000.00 in compensation.  NCAT also ordered that the compensation be paid through a contribution that was levied on all owners except the successful owner who won the case.  The owners corporation appealed against that aspect of NCAT’s decision (and others). NCAT’s Appeal Panel upheld the decision.  The Appeal Panel concluded that it would be unjust for the successful owner to have to contribute towards the payment of the compensation the owners corporation had been ordered to pay the owner.  This meant that the owners corporation was required to levy a contribution on all owners (apart from the successful owner) to raise the funds needed to pay the compensation it was ordered to pay.  The owners corporation was also ordered to pay the owner’s costs of the case and those costs were determined to be payable through a contribution to be levied on all of the other owners.

The Wash Up

The Jacinta Investments case provides an example of one of the rare circumstances in which an owners corporation is able impose a differential levy on some but not all owners.  The case also highlights that individual owners can be made liable to pay compensation that an owners corporation is ordered to pay to another owner to cover any damage or loss the owner suffers where the owners corporation does not fulfill its responsibility to repair common property.

The Future

The Jacinta Investments case has broader implications.  It opens the door for owners to argue in legal proceedings in NCAT that they should not be required to contribute to the payment of costs an owners corporation will incur repairing common property or consequential damage to lot property.  So, for example, where an owner sues an owners corporation in NCAT for an order to force the owners corporation to repair common property defects and water damage to the owner’s lot caused by those defects, the owner may now be able to obtain an order from NCAT excusing the owner from having to contribute to a levy that is raised to pay for those repairs.  Stay tuned because there is likely to be another chapter to this story.

Author I Adrian Mueller, Partner I B.Com LLB FACCAL.

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There has been a substantial increase in the number of electric vehicles (EV) being purchased by residents of strata buildings from cars to bikes and other vehicles.

A Recent Study

A recent study of the ‘future of EV charging in Sydney apartments’ revealed that:

• 48% of respondents plan to have an electric vehicle of some kind, within the next 5 years
• 78% were in favour of installing charging facilities
• 79% would like a user-pays arrangement for individual vehicle spaces

Does an EV Charger Require Owners Corporation Approval?

The fact is that electric vehicles need charging and that means installing electric vehicle chargers in your apartment block is inevitable.

Installation of electric vehicle chargers will normally involve changes to common property that require owners corporation approval through a by-law.

But what should the by-law cover?

There are two key issues which should be covered in the by-law.

First, who pays for the cost of the electricity that will be used by the EV charger?

Second, what happens if the EV chargers requires the building’s electricity infrastructure to be upgraded (e.g. to 3 phase power)? Who pays for the upgrade?

Get your EV By-law from the Experts 

Our specialist team of strata lawyers have drafted many by-laws permitting owners to install electric vehicle chargers in strata buildings. Our EV by-law covers all essentials including:

• Who is responsible for paying for the cost of electricity used to charge electric vehicles
• Any necessary upgrades to the electricity infrastructure in the building

GET YOUR ELECTRIC VEHICLE (EV) BY-LAW NOW!

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

In a landmark ruling, today the Appeal Panel of NCAT has ordered an owners corporation to upgrade a balustrade to comply with the Building Code of Australia.

This case marks the first time that an owners corporation has been ordered to upgrade an unsafe balustrade to achieve compliance with the Building Code of Australia.

The case cuts against the long held view that the provisions of the Building Code of Australia are not retrospective and that an owners corporation does not have to upgrade an unsafe balustrade to comply with the Code.

Here we share the full article Landmark NCAT Ruling – Upgrade that Balustrade

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

In last week’s newsletter article, we reported on a recent NCAT case in which an owners corporation was ordered to repair damage to lot property caused by a common property roof leak.

Our article generated considerable interest. The NCAT decision begs the question: Is an owners corporation responsible for repairing lot property?

In this article, we take a closer look at that issue and consider whether the NCAT case we reported on last week (Mastellone v The Owners – Strata Plan No. 87110 [2021] NSWCATAP 188) was correctly decided.

Read the full article Is an Owners Corporation Responsible for Repairing Lot Property?

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

There is a common misconception that an owners corporation is not responsible for repainting a water damaged ceiling in a lot or repairing consequential water damage to a lot that is caused by a common property defect.

In a recent case, NCAT held that:

• an owners corporation is responsible for carrying out those repairs;
• the common property memorandum does not exempt an owners corporation from having to perform those repairs.

Here we discuss the case and explain why an owners corporation is not exempt from repairing damage to lot property NCAT Orders Owners Corporation to Repair Lot Property

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

In a recent case NCAT has penalized an owners corporation $6,600 for breaching an order to repair common property defects.

However, due to a quirk in the strata legislation, before NCAT could impose that penalty, the lot owners who sough the penalty had to obtain the consent of the NSW Attorney General to make the penalty application.

The case highlights the importance of new laws in the Strata Schemes Management Amendment (Sustainability Infrastructure) Bill 2021 that are expected to commence later this year that will give NCAT power to issue penalties of up to $5,500.00 (without the consent of the NSW Attorney General) for breaching orders made by NCAT.

Read on…NCAT dishes our punishment for order breaches

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.

How should your owners corporation deal with a request from a lot owner to attend at Mediation?

Mediation is an important part of the dispute resolution processes for strata schemes pursuant to the Strata Schemes Management Act 2015.

A recent decision of the Appeal Panel of NCAT  has underlined the need for agreements reached at Mediation to be sufficiently certain if they are to be capable of being enforced under the strata legislation.

This in turn raises questions about how owners corporations should approach Mediation, particularly the most common form of Mediation for strata matters, under the auspices of Fair Trading NSW.

In this recent case we explain how getting the wrong advice can stop you from enforcement.

Where ever possible an owners corporation should take the following steps Mediation and the Right Advice.

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.

Is your owners corporation likely to be subject to claims that it is discriminating against disabled persons?

A recent decision of the Administrative and Equal Opportunity Division of NCAT has determined that an owners corporation “provides services” to owners and occupiers within a strata scheme. As a result, owners corporations are potentially subject to the provisions of the Anti Discrimination Act 1977, in relation to the way that owners corporations manage and control common property and the finances of the strata scheme.

This raises the prospect that owners corporations may face increasing burdens to manage common property with the needs of disabled persons in mind.

Potential Implications for Discrimination in Strata Schemes

Potentially, this decision widens the possibility that claims under the Anti Discrimination Act can be brought against owners corporations for issues such as:

• providing alternatives to stairs
• installation of lifts
• installation of other lifting mechanisms
• broadening of doorways to enable wheelchair access
• providing non-slip devices
• providing access ramps
• accessibility of garbage facilities
• accessibility of recreational facilities

Owners corporations would be well advised to take great care, and even to seek advice, when issues of discrimination are raised by lot owners and residents .

Read the full article here: Owners Corporation and Discrimination Legislation.

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.

A recent decision by NCAT has provided guidance on what needs to be done for an owners corporation to approve renovations done by an owner.

This case involved a dispute between the owners corporation of a large mixed use building in Milsons Point and the owner of a commercial lot in the building who wanted to fit-out his lot as an office involving alterations to common property.

The case produced a surprising outcome and is likely to change the practice that is followed by owners who seek owners corporation approval to renovate.

So, does a common property rights by-law authorise an owner to carry out works affecting the common property?

Here we share the case and outcomes: Get Your Renovations Approvals Right

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.

What would you think if you were told that NCAT could not order an owners corporation to carry out repairs to common property or order a lot owner or tenant to comply with a by-law?

No doubt you would think that could not be correct.

However, recent decisions by the Appeal Panel of NCAT have cast doubt on NCAT’s power to resolve most types of strata disputes.

So where does that leave us?

Read the full article here: Is NCAT’s Ability to Resolve Strata Disputes Unclear?

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.