NEWSLETTER    ISSUE 11   July 2013

Recent Survey

A  big thank you to the Secretary’s and  Treasurer’s in each of our schemes who took part in our survey – you’re honest  feedback regarding things like our  AGM  paperwork format,  suggestions on newsletter content  and overview of our performance was extremely useful and has been taken on board.

We  did  find  that  there  was  a  large  difference  in  service  expectations  of  small  plans  as  opposed  to  our  larger schemes requirements. We are working  towards developing  tailored options as to fee and service structure accordingly and will have this ready by 1 September for discussion at your  AGM.

Biggest morning tea

We decided  to hold this event on a Friday afternoon when we hoped more of our contractors etc could come.  We had  three  raffles,  provided  food  and  drinks  and  raised  $2110  for  the  Cancer  Council.    Attendance  was  up  on  last year and we look forward to interest growing and continuing to provide support towards this very worthy cause.

Court case review – When an owner undertakes repairs to common property

It is with thanks to JS Mueller  and Co that we can provide  the following  extract from their November  2012 newsletter.

In  The Owners  –  Strata  Plan 32735 -v-  Heather Lesley-Swan  [2012]  NSWSC  383  (10  August  2012)  the  owner of a unit in Potts Point, Sydney, Ms Lesley-Swan,  carried out repairs to the common property balcony  adjacent to  her unit without the permission  of  the owners corporation.  Ms Lesley-Swan  sued the owners corporation to  recover  the  money  she  spent  carrying  out  the  balcony  repairs.  Her  claim  was  successful  in  the  Local  Court where  she  was  awarded  compensation  of  $9,597.18  to  cover  the  cost  of  repairing  the  balcony  and  an  additional $30,400  in  compensation  for  lost  rental  over  a  19  week  period  she  claimed  her  unit  could  not  be  rented  due to the defective condition  of the balcony.  The owners  corporation  successfully appealed  against the decision of  the  Local  Court  with  the  Supreme  Court  overturning  the  Local  Court’s  decision  to  award  Ms  Lesley-Swan compensation for the balcony repairs.

FACTS

The  facts  in  the  Lesley-Swan  case  are  not  uncommon.  In  mid  to  late  2006  a  section  of  tiles  on  the  balcony adjacent to Ms Lesley-Swan’s unit had popped  and lifted.  There was no dispute that the balcony tiles formed part of the common property.  The owners  corporation  and Ms  Lesley-Swan  fell into dispute about the way in which the defective tiling  would  be repaired.  The owners  corporation  wanted  to replace  the section of tiling  which  had lifted with original  terracotta tiles.  Ms Lesley-Swan  asserted that the entire balcony  needed  to be retiled  with new, ceramic tiles  which  would  match the tiles  she  intended  to use  during  forthcoming  renovations  to her unit.  The disagreement between the parties continued for several months.

In  April  2008  Ms  Lesley-Swan  wrote  to  the  owners  corporation  and  indicated  that  she  would  be  “undertaking repair  of the tiling  to current building  standards  at our own expense”.   Shortly afterwards the owners  corporation obtained  an interim order from a strata schemes adjudicator  restraining  Ms Lesley-Swan  from carrying  out any repairs  to  the  balcony  tiling.  But  that  did  little  to  solve  the  impasse  and  in  early  September  2008  Ms  LesleySwan’s  contractor  retiled the whole of  the balcony with new tiles.  This work was done without the permission of the owners corporation.  

THE COURT’S REASONING

In considering  Ms Lesley-Swan’s claim to recover from the owners  corporation  the cost of retiling  the balcony, the  Supreme  Court  observed  that  the  strata  legislation  imposes  on  the  owners  corporation  (not  unit  owners) the  responsibility  for  repairing  common  property.  Importantly,  the  Court  held  that  the  strata  legislation  does  not authorise a unit owner to unilaterally undertake repair work on common property.

The  Court  concluded  that  there  were,  essentially,  two  ways  in  which  a  decision  to  repair  common  property  could be made,  namely either by  the owners corporation itself or pursuant to  an order made by a strata  schemes adjudicator or court.  

The  Court  said  that  an  owner  faced  with  an  owners  corporation  that  refuses  to  repair  common  property  is  given a remedy under the strata legislation  to obtain an order from a strata schemes adjudicator  to require  the owners corporation to  allow the owner to  carry out the repairs  himself or,  alternatively,  to  apply for  an injunction  to  force the owners corporation to do the repairs.

The  Court  made  some  interesting  observations  about  the  rationale  for  ensuring  that  all  repairs  to  common property  remain  under  the  control  of  an  owners  corporation.    The  Court  said  that  if  an  individual  owner  was  free to  have  his  contractor  repair  common  property  (where  an  owners  corporation  had  failed  to  do  so)  “the  integrity  of a particular strata scheme could be readily undermined” because repairs done by individual  owners could result in  “strata  safety  issues,  or  impact  on  the  convenience  of  other  owners  or  result  in  visual  or  structural  features  or other matters that are out of keeping with the style and integrity of the unit building itself”.

The  Court  also  observed  that  where  an  owners  corporation  engages  a  contractor  to  repair  common  property,  the owners corporation will have enforceable  contractual  rights against a contractor should  he fail to meet relevant standards.  But where work is performed by a contractor on behalf of an individual  owner on common property, an owners corporation would not have that contractual right against the contractor.

The  Court  said  that  the  general  law  does  not  encourage  an  owner  of  one  property  to  perform  work  on  his neighbour’s  property  because  that  would  encourage  disputes,  turmoil  or  disorder.  The  Court  concluded  that  this principle  of  law was abundantly clear in the case of  strata  buildings  because the strata  legislation  is designed to maintain order between  owners and owners corporations  and one of the ways it achieves this goal is by allocating to the owners corporation the responsibility for repairing the common property. 

The  Court  concluded  that  for  these  reasons  a  unit  owner  could  not  proceed  to  perform  maintenance  or  repair work  on  common  property  (without  the  permission  of  the  owners  corporation  or  an  order  by  a  strata  schemes adjudicator)  and  then  recover  the  cost  or  expense  of  the  work  from  the  owners  corporation.  Consequently  the Supreme  Court  overturned  the  Local  Court’s  decision  to  award  Ms  Lesley-Swan  compensation  for  the  cost  of retiling the balcony.

CONCLUSION

The decision in the Lesley-Swan case will have wide application  across the strata industry because it is not uncommon for  owners to  carry  out  repairs to  common property and claim the  cost  of  the  repairs from  owners corporations. 

The lesson to be learnt from the Lesley-Swan  case is that if an owners  corporation  fails or refuses to repair defective common property,  a unit owner cannot repair the defect without the owners corporation’s permission or an order made by a strata schemes adjudicator, and any owner who unilaterally  performs the repair will do so at their own  peril  and  will  not be able  to recoup  the cost of the repair  from the owners  corporation.    Any unit owner confronted with an owners corporation  that  does not repair common property should not take the law into their own hands but rather should  obtain an order either forcing the owners corporation  to carry out the repairs or, if appropriate, an order to permit the owner to do the repairs.

Please remember that  all our previous newsletter publications  are on our website – see the home page – there are details as to the content of each so it is easy to find the one you are looking for.