NCAT Issues a Warning for Building Managers

A recent decision of the NSW Civil and Administrative Tribunal (NCAT) has broken new ground in making orders for the termination of a Building Manager Agreement.

In particular, the finding in this case was that the caretaker (building manager) had failed to perform the relevant agreement satisfactorily, and that the building manager agreement, in the circumstances of the case, was harsh, oppressive, unreasonable or unconscionable.

Owners Corporations and Unsatisfactory Building Managers

This decision of NCAT provides a comprehensive analysis of the operation of s72 of the Strata Schemes Management Act 2015 and provides a solid framework for an Owners Corporation to consider whether there are grounds to seek the assistance of NCAT to bring an unfair or unsatisfactory Caretaker (Building Manager) Agreement to an end.

Here we share the recent case and outcomes: NCAT Issues a Warning for Misbehaving Building Managers.

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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.

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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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.

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Smokers Unknowingly Breaching By-laws

A recent decision of the NSW Civil and Administrative Tribunal (NCAT) has recognised that even though a lot owner smokes inside their lot, they still may be in breach of the by-laws of the owners corporation and  leave themselves open to a penalty being imposed by NCAT.

Why? Because if the smoke leaves their apartment it will almost inevitably penetrate Common Property in one way or another.

A Recent Case…

This recent case illustrates that it is extraordinarily difficult for smokers to avoid breaching by-laws and why it’s important to have a well-drafted by-law if the owners corporation wishes to comprehensively deal with the issue.

Here we share the recent NCAT case article Smoking in Strata Apartments another “nail in the coffin”!

Also below, Warwick van Ede, Specialist Strata Lawyer talks with LookUpStrata on this very case and the many unanswered questions!

It’s definitely time to review your smoking by-law, or to implement one if you do not have one!

NEED A SMOKING BY-LAW OR TO REVIEW YOURS?

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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.

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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

A recent decision of the Appeal Panel of the NSW Civil & Administrative Tribunal (NCAT) has highlighted the potential risks for owners corporations seeking to impose penalties and other sanctions on lot owners in connection with non-compliance with by-laws.

Careful attention will need to be paid by owners corporations to “cost recovery” aspects of their by-laws to ensure that an otherwise well constructed by-law is not rendered completely invalid.

Here we share a recent case where NCAT Tightens the Screws on Strata By-laws.

Owners corporations who have these by-laws should give consideration to having them reviewed.

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 this article, we take a look at The Top 5 By-laws for 2021 and discuss the trends with respect to changes to the by-laws.

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.

Commencing 1 December 2021, changes to the Community Land Development Act 2021 and Community Land Management Act 2021 will commence.

The new legislation will modernise and simplify the development process of community schemes within NSW, aligning the community schemes legislation with the Strata Schemes Management Act 2015 and Strata Schemes Development Act 2015.

What is the Aim of the New Community Title Legislation?

1. To create consistency between community lands and strata schemes laws in NSW
2. Provide modern, flexible, and democratic governance arrangements
3. Improve maintenance of shared property and financial management
4. Support a simpler and more flexible development process

What are the Key Changes to Community Title Legislation?

• To provide more flexibility for schemes with some requirements for unanimous resolutions to now be special resolutions
• Make it easier for schemes to deal with association property and add land to a scheme
• Introduction of a new process for development contracts bringing the process in line with strata schemes
• The simplification of tiered schemes
• Allowing schemes to apply to NSW LRS for a termination of a community scheme instead of going to court
• Allowing an association to also create statutory easements
• The introduction of a new process for amalgamations

For further information visit www.nswlrs.com.au.

How will this Affect Your Strata and Community Schemes?                              

• Your existing by-laws will need to be consistent with the new aligned community and strata schemes legislation otherwise they may not be enforceable
• You may also need to consider whether your community and neighbourhood management statements are in line with the new laws
• It is therefore important that you review any by-laws and management statements to ensure they are in line with these new laws
• This fact sheet includes detailed information about the different types of orders and how community schemes disputes are managed at NCAT – Community_Schemes_Fact_Sheet

Do you need help reviewing your by-laws and management statements to ensure they are in line with the new legislation? Contact us now, help is here.

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.

Deadline for New Rules for NSW STRA 

Here we explain the new rules!

The NSW government has issued a reminder that new short-term rental accommodation (STRA) rules will come into effect on 1 November 2021 coinciding with the return of regional travel across NSW.

These new STRA registration requirements follow the introduction of a mandatory code of conduct governing STRA rentals late last year.

And… most likely these new rules will also require your STRA by-laws to be reviewed!

What is the New Rule?

If you wish to rent a property as a STRA host, it is mandatory to register the property and pay the registration fee via the NSW Planning Portal by 1 November 2021.

What is the Deadline?

The deadline is Monday 1 November 2021.

What is the Cost?

STRA hosts are required to pay a registration fee of $65.00 for the first 12 months and an annual renewal fee of $25.00.

Who Does STRA Registration Apply to?

The STRA registration applies to owners of any residential accommodation who wish to rent their property out for short term rentals.

Do I Need to Provide additional Documentation to Register?

Yes, if the property is not owned by you, you must provide proof of consent from the property owner.

You must also verify that the property is in compliance with the fire safety standards as defined in the STRA policy here.*

*Please note: Given the recent lockdown orders, a grace period has been applied in relation to providing the fire safety standards.

STRA hosts will be able to register their short-term rental as required but delay the fire and safety requirement until 1 March 2022, giving STRA hosts an additional 4 months to adhere with the policy.

Where do I Register my STRA Property?

Your STRA property is to be registered here on the on the NSW Panning Registration Portal.

Do I Need to Update my Short-term Rental Accommodation By-laws?

Most likely, if you live in a strata property the STRA by-laws may need to be reviewed. For advice you may contact our experienced and knowledgeable STRA team here.

Where do I Find More Information on the New STRA Rules?

For more information on the new STRA rules visit NSW Planning STRA Portal here.

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.

As many of you are aware, from 11 October 2021, the Registrar General has announced a major step in the transition away from paper-based registration of by-laws (and other documentation) in NSW.

So, what will the changes to the land titles system in NSW mean?

Read on for more specific details in this recent NSWLRS release.

Our Dedicated By-law Registration Team

If you need assistance registering your by-laws electronically we have an experienced and dedicated by-law registration team who are ready to help you.

CLICK HERE FOR HELP WITH ELECTRONIC BY-LAW REGISTRATIONS

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 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.