With the gale force winds and torrential rain overnight cutting power, trains and flooding roads this is a quick refresher for owners corporation’s and lot owners on what their respective duties are when common property is damaged.
An owners corporation has a strict duty to maintain and repair the common property. In NSW this duty is under section 62 of the Strata Schemes Management Act 1996 (NSW) and in the ACT this duty falls under section 24 of the Unit Titles Management Act 2011 (ACT). In the ACT the duty extends for class A units to defined parts which include load bearing walls, columns, footings, slabs, beams and any part of a balcony on the building whether or not it is lot property.
The owners corporation must conduct repairs to damaged property. In an emergency, such as the storms overnight, the owners corporation has powers to enter your lot. For details see my previous blog Drips, Drizzle or Deluge: https://allisonbensonau.com/2015/04/02/drips-drizzle-or-deluge-powers-of-an-owners-corporation-to-enter-lot-property-including-emergency-powers/
When repairing the common property (and the defined parts in the ACT class A units) the owners corporation need only repair the damaged item so that after the repair (or renewal or replacement if required) it then has the performance and functional efficiency at least equivalent to that prior to when the damage was caused. What this means is that an owners corporation is not required to upgrade that part of the common property when conducting the repair, replacement or renewal.
What would be an upgrade? Justice Barrett in The Owners Strata Plan 50276 v Thoo  NSWCA 270 described the replacement of a flimsy brushwood fence with a substantial brick fence as an upgrade. Justice Barrett ‘s view was that “[r]eplacement connotes no more than the installation of one thing in the place of another to achieve functional equivalence.”
An owners corporation should therefore:
- Notify its strata managing agent, building manager or emergency tradespeople of the damage and request that they either attend site to assess the damage or arrange for emergency tradespeople to do so;
- Act promptly in obtaining quotes for repairs (using its emergency powers if required to enter lots) or request that the strata managing agent use their emergency powers (if they have been granted emergency powers) to arrange repairs;
- Document the damage by taking photos and noting the date and location of the photos;
- Submit all evidence of damage to its insurer and make a claim on its insurance policy providing details of any quotes (note that some insurers will require that their own assessors attend site and have preferred tradespeople); and
- Not upgrade the common property in the process of the repairs. If an upgrade is desired then in NSW a section 65A resolution of the owners corporation at general meeting is required prior to doing so.
As a lot owner have a duty to mitigate your loss. What this means is that you should:
- Immediately report any damage to your strata manager or executive committee member;
- Try to prevent any further damage that may be caused, for example, if water is flooding a balcony and coming into the , ensure that the drainage holes are clear and put towels down to try to minimise an internal water damage;
- Co-operate with the owners corporation’s experts by giving prompt access to allow repairs to occur; and
- Make a claim for any internal damage under your home contents policy.
I hope the storms caused as little damage as possible. These are very general comments and if there are any specific issues that you would like advice about please contact Kerin Benson Lawyers: http://www.kerinbensonlawyers.com.au.
Note that in both NSW and the ACT there are mechanisms that allow an owners corporation to determine that it is not appropriate to maintain or repair certain common property. This is not addressed in this blog.