This NSW article is about how to find information about a major defect in your building.
Table of Contents:
- QUESTION: During floorboard replacement work in my unit, the builder identified that the subfloor is not level and requested it be fixed before proceeding with the repair. As the subfloor is common property, is this a lot owner’s or owners corporation’s responsibility? Is a lot owner allowed to do repair work to the common property?
- QUESTION: I believe there are defects in my roof space. Can I use an independent technician rather than someone chosen by the committee?
- QUESTION: After plumbing issues, we’ve discovered the sewerage system in our 2003 complex does not match the approved plans. The only permanent solution seems to be a complete removal and relaying of the sewer system. Do we have any avenues to seek compensation?
- QUESTION: Our building has had defects and water ingress issues for years. Due to ongoing neglect of the issues, our insurance company did not renew the insurance and it has lapsed. What do we do now?
- QUESTION: Our building has a major defect. Most lot owners aren’t aware. The committee is not following recommendations to make the building safe. What should we do?
Question: During floorboard replacement work in my unit, the builder identified that the subfloor is not level and requested it be fixed before proceeding with the repair. As the subfloor is common property, is this a lot owner’s or owners corporation’s responsibility? Is a lot owner allowed to do repair work to the common property?
Answer: The owners corporation is responsible for the cost to re-level the concrete slab so that flooring can be installed properly on top of it.
Owners corporations have a statutory duty to repair and maintain common property under section 106 of the Strata Schemes Management Act 2015 (NSW) (‘the Act’).
The concrete slab forms part of the common property, as does any levelling compound applied to it.
The owners corporation is therefore responsible for the cost to re-level the concrete slab so that flooring can be installed on top of it properly. The concrete slab must be fit for purpose.
Assuming the flooring works (being a minor renovation that must be approved in accordance with section 110 of the Act and clause 28 of the Strata Schemes Management Regulations 2015 (NSW) (‘the Regulations’)) have been properly approved by the owners corporation, a solution could be to ask the installer to quote on re-levelling the floor. You could provide their quotation to the owners corporation to consider engaging the supplier directly. This gives the owners corporation the rights to warranties and control over the tradespeople it uses to repair its property.
If an owner wishes to undertake work to common property, they must seek approval under section 111 of the Act. In this article about unapproved changes to common property, we explored section 111 in more detail.
Tim Sara Strata Choice E: tsara@stratachoice.com.au P: 1300 322 213
This post appears in Strata News #669.
Question: I believe there are defects in my roof space. Can I use an independent technician rather than someone chosen by the committee?
I need a technician to provide a diagnostic investigation of my roof-mounted air conditioner and my roof space. I believe there are defects in the roof space that separates my unit from the surrounding units.
I’d prefer to use an independent technician rather than someone chosen by the committee. Do I have to provide the committee with the details of my chosen technician? What information am I obliged to provide to the committee if I have a technician visiting the scheme to carry out a diagnostic report?
Answer: You could wait to see the outcome of the report by the committee’s chosen technician.
It is difficult to answer this question with limited information. Do all units have a roof mounted air conditioner? Was this installed subject to an exclusive use by-law? If it was, you would need to check the terms of the by-law to ascertain any ongoing obligations regarding liability for any issues arising and how this would affect you as the owner of the unit.
If the above is not applicable, you could wait to see the outcome of the report by the committee’s chosen technician. If you believe there are concerns with that report, an independent report could be requested in response. This would be the more cost-effective approach.
If you wish to engage a technician to obtain a preliminary opinion before the committee retains a technician, I recommend you discuss it with the committee and advise.
Pierrette Khoury Khoury Lawyers E: pierrette@khourylawyers.com.au P: 0415 459 486
This post appears in the February 2023 edition of The NSW Strata Magazine.
Question: After plumbing issues, we’ve discovered the sewerage system in our 2003 complex does not match the approved plans. The only permanent solution seems to be a complete removal and relaying of the sewer system. Do we have any avenues to seek compensation?
We’ve recently discovered, following a blockage and backflow from the sewer line into a lot, that the sewerage system in our complex, built in 2003, does not match the approved plans.
We have had a civil engineer come in to draw an accurate sewerage plan for the complex which has highlighted discrepancies such as an absence of planned overflow relief gullies, bellies in pipework and a lack of fall in the pipes.
Our insurance company is seeking evidence of remediation of the problem before progressing an insurance claim related to the issue. The only permanent solution put forward by plumbers to date is a complete removal and relaying the sewer system.
What options do we have under legislation to seek compensation from the developer, builder, plumber or council that approved the sewer system?
Answer: There may be avenue of relief based on a potential claim based on the Design and Building Practitioners Act 2020, however, you will need to determine at what point the loss was caused.
I am assuming based on the wording of the question that there has not been any legal action previously taken against the builder for defective works.
There may be avenue of relief based on a potential claim based on the Design and Building Practitioners Act 2020, however you will need to determine at what point the loss was caused. The Act provides that a builder who carries out construction work has a duty to exercise reasonable care to avoid economic loss caused by defects in or related to a building for which the work is done and arising from the construction work.
However, for such an action for a breach under the Act, it may be commenced within six years of the defects first becoming known or discoverable up to a maximum of 10 years after completion.
Pierrette Khoury Khoury Lawyers E: pierrette@khourylawyers.com.au P: 0415 459 486
This post appears in Strata News #274.
Question: Our building has had defects and water ingress issues for years. Due to ongoing neglect of the issues, our insurance company did not renew the insurance and it has lapsed. What do we do now?
I am an owner of one of 40 units in an 8 story building in Parramatta. The building has had defects and water ingress issues for years.
Due to ongoing neglect of the issues, our insurance company did not renew the insurance and it has lapsed.
Our Strata Management Company resigned due to our insurance situation, but luckily they are still working tirelessly behind the scenes on insurance and trying to assist.
This situation is causing me and other lot owners a great deal of stress. We are working to restore insurer’s confidence that the issues will be dealt with and that we will continue to maintain the building.
Do you have any suggestions regarding insurance or what else the strata committee should also be doing?
Answer: Insurers are more favourable to buildings that demonstrate a proactive approach to dealing with building issues.
Since the Miami building collapse in 2021, which has a legal settlement of $997m, insurers have become more wary of covering buildings with defects. We are now finding insurers guidelines are becoming more stringent for defects.
We recommend an owners corporation takes reasonable action to address defects when they arise. Insurers are more favourable to buildings that demonstrate a proactive approach to dealing with building issues. Long term failure to address defects without reasonable grounds, can render a building uninsurable.
When the owners corporation become aware of defects, they have a “duty to disclosure” requiring them to advise the insurer of matters relevant to the insurers decision to insure you. Failure to disclose defects can mean the insurer can void the insurance policy or a claim. The duty of disclosure applies when the policy is taken out, renewed or altered and for this reason, if you are undertaking a defects report and have no grounds for doing so from a safety or damage perspective, we recommend such reports are commissioned in the months after the policy has been renewed as opposed to the months prior.
In addition to disclosing the defects, it is important to note that “Non-rectification of defects, errors or omissions you were aware of” is a specific policy exclusion. Irrespective of the progress the owners are making in rectifying any defects, the policy may exclude damage for known defects. So having the defects rectified in an expeditious manner is in the interest of owners.
We recommend the following measures are considered where insurability is an issue for a building due to defects:
- Take action to minimise any perceived risks – if there are any temporary make safe measures that can be implemented to minimise risk, this should be a consideration. This should actively be discussed with the insurer.
- Ensure the entire market has been quoted, so that you can demonstrate to owners, no insurance cover exists.
- Discuss insurability issues with owners – if there is no insurance cover on a building, owners should know.
This article may be little hope to a building that is uninsurable due to defects, but we trust the information provided is useful for buildings that are dealing with defect issues.
Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.
This post appears in the July 2022 edition of The NSW Strata Magazine.
Question: Our building has a major defect. Most lot owners aren’t aware. The committee is not following recommendations to make the building safe. What should we do?
I own an apartment in the Eastern Suburbs of Sydney. The building has a major defect that affects every owner.
Insurance has refused to cover the defect as the building wasn’t built to legal standards many years ago. It’s been several months and the committee has not followed the recommendations in the report to make the building safe.
The majority of owners don’t know about the report. It could be a big danger to others in and around the building. I think the committee is not functioning on the owner’s behalf. What are your thoughts?
Answer: Request the committee or the managing agent provides the report to all owners.
It would be surprising if the committee, which is comprised of owners in the same strata, do not take steps to ensure a major defect is repaired.
In this case, you and other owners may request the committee or the managing agent provides the report to all owners to ensure everyone has a good understanding of the status of the building.
In your request to the strata committee and the strata manager, you could mention the following aspects:
- Why it would be in the best interest of all owners to be informed of the major defect
- Ways to distribute information to all owners without incurring excessive administration, printing and postage costs (particularly if the report is a couple of hundred pages). For example, upload the building defects report onto an online portal and/or post a notice on the community notice board to advise interested owners how to obtain more information.
Do owners have the right to inspect strata documents?
An owner has the right to inspect strata documents, including a building defect report, under section 182 of the Strata Schemes Management Act 2015 (by paying a prescribed fee). Alternatively, you and other owners could propose a motion in the next general meeting for the report to be shared to all owners and for the general meeting to resolve any steps towards any remedial work.
Yuhao Gu Omega Legal E: info@omegalegal.com.au P: 0402 990 108
This post appears in Strata News #274.
Have a question about major building defects or something to add to the article? Leave a comment below.
Embed Read next:Visit Strata Building Defects OR NSW Strata Legislation.
Looking for strata information concerning your state? For state-specific strata information, try here.
After a free PDF of this article? Log into your existing LookUpStrata Account to download the printable file. Not a member? Simple – join for free on our Registration page.