Navigating Common Property Defect Repairs in NSW Strata Schemes: Rights and Obligations

5 min read

Strata living in New South Wales continues to grow in popularity, offering attractive investment opportunities and dynamic residential options. However, this lifestyle often comes with challenges, particularly disputes between lot owners, strata managers, and owners corporations regarding common property repairs and building defects.

Understanding the responsibilities for managing and funding repairs related to common property defects is crucial. This article explores key questions surrounding these issues:

• Who is ultimately responsible for addressing common property defects?
• What are the extent and limitations of the owners corporation’s obligations in handling repair situations?
• How are repair costs allocated and managed within the strata scheme?

By delving into these topics, we aim to provide clarity and guidance for those navigating the complexities of strata living in NSW.

Owners Corporation’s Responsibility for Strata Defect Repairs in NSW: Duty to Repair and Maintain

The Strata Scheme Management Act 2015 (SSM Act) sets clear expectations for owners corporations regarding common property maintenance and repair. Section 106 mandates that owners corporations must properly maintain and repair both common property and any personal property under their control.

This obligation extends to:

1. Replacing or repairing fixtures
2. Addressing defects within the strata property

Failure to meet these statutory duties can result in lot owners seeking compensation for reasonable and foreseeable losses stemming from inadequate maintenance or repairs.

While the owners corporation typically bears responsibility for common property upkeep, Section 107(1) of the SSM Act provides some flexibility. Through a common property rights memorandum in the by-laws, certain maintenance duties can be delegated to individual lot owners. In the absence of such provisions, the responsibility remains with the owners corporation.

However, questions persist about the scope of this duty:

• Is maintaining basic usability sufficient?
• Does the law require owners corporations to keep properties in optimal condition?

Let’s examine the legal nuances surrounding these obligations.

Legal Principle #1: Reasonable Necessity Limits the Owners Corporation’s Repair Duty

The owners corporation’s obligation to repair and maintain common property is not absolute. Lot owners cannot demand repairs beyond what is reasonably necessary to ensure the strata building’s safety and usability. NSW courts have consistently upheld this principle.

In Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425, the Supreme Court emphasised that reasonable necessity constrains the owners corporation’s maintenance duty. Replacements or upgrades are only justified when an item cannot be maintained in good, serviceable condition. The court prevented an extensive refurbishment, ruling that more modest repairs would suffice to render the building safe and usable.

Arcidiacono v Owners of Strata Plan No 17719 [2020] NSWCA 269 further clarified ‘reasonable necessity’. The court stated that it implies the property’s use or development is impossible without repairing or replacing the defective common property.

For example:
If a strata property’s roof is damaged causing water issues, the owners corporation must repair the roof and address the resulting damage. However, they cannot be compelled to completely replace the roof unless repairs alone cannot reasonably fix the problem.

This principle ensures that owners corporations focus on essential maintenance without being burdened by excessive or unnecessary upgrades.

Evaluating ‘Reasonable Necessity’ for Common Property Defect Repairs in NSW Strata Schemes

The concept of “reasonable necessity” is crucial when determining the scope of repairs or rectification work that lot owners can expect from the owners corporation for common property defects. Understanding how to assess reasonable necessity is key.

In Owners – Strata Plan No. 33368 vs Gittins [2022] NSWCATAP 130, the NSW Civil and Administrative Tribunal established that determining the minimum necessary remedial work is a matter of fact and evidence. This means that what constitutes a reasonably necessary repair varies case by case, depending on the specific circumstances and evidence presented.

Key points to consider:

1. The owners corporation has some discretion in deciding the extent of repair or replacement needed to address a defect.
2. If an item can function adequately with repairs, the owners corporation may choose not to replace it entirely.
3. Lot owners can object to replacement or renewal if the existing common property:
   • Functions as intended
   • Can maintain functionality through proper maintenance and repairs

This approach balances the need for essential repairs with cost-effective management of the strata scheme, ensuring that unnecessary or excessive work is avoided while maintaining the property’s functionality and safety.

Legal Principle #2: Justifying Preventative Repairs and Maintenance of Common Property

The owners corporation’s ability to perform preventative work, even when not immediately necessary, is an important aspect of strata management. This principle addresses whether strata committees or managers can take proactive measures to address potential defects.

Key points from recent court decisions:

1. Loneragan v The Owners-Strata Plan No 16519 [2020] NSWCATAP 177:
   • Section 106 of the SSM Act includes taking preventative measures
   • Effective strata management involves anticipating and mitigating potential issues
2. Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425:
   • Owners corporations may conduct preventative maintenance if:
     a) It’s incidental to other repair and maintenance work
     b) It’s necessary due to a building defect or damage
     c) It’s required for the proper functioning of common area items

In these cases, owners corporations are not only permitted but may be obligated to undertake preventative measures as part of their statutory duty. This can include covering associated costs.

This approach allows for proactive management, potentially reducing long-term expenses and disruptions by addressing issues before they become more serious. However, the scope of preventative work must still be reasonable and justifiable within the context of the strata scheme’s needs and resources.

Essential Insights for Lot Owners and Strata Managers

Key points to remember:

1. Lot owners have the right to request common property repairs and maintenance from the owners corporation.
2. However, replacing or renewing common property is limited by the concept of reasonable necessity.
3. Replacement or renewal is justified when:
   • The common property no longer functions effectively
   • It has stopped working altogether
   • It has fallen into a state of disrepair

For lot owners:

• Assessing whether a repair is reasonably necessary can be challenging
• Seek expert advice when unsure about the extent of required repairs

For strata managers and owners corporation members:

• Understanding your duties and obligations is crucial
• Familiarise yourself with relevant laws and regulations

In complex situations involving strata repairs, consulting with a strata lawyer is advisable. These legal experts can:

• Navigate intricate NSW government regulations
• Interpret home building standards
• Provide guidance on statutory compliance

Regardless of your role in the strata scheme, professional legal advice can ensure that common property maintenance actions align with legal requirements and best practices. This approach helps protect the interests of all parties involved and promotes effective, compliant strata management.