Do you own a residential strata unit in NSW? Then the following provision of the Strata Schemes Management Act 2015 is relevant to you:

Section 106 – Duty of Owners Corporation to Maintain and Repair Property

(5) An owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation.

If you have suffered property damage to your unit as a result of the failure of the owners corporation to properly maintain the common property of the building (including its structure) and to otherwise keep it in a state of good and serviceable repair, you may recover any loss arising from the damage from the owners corporation. However you only have 2 years from when you first became aware of the loss, so if you notice damage to your unit, do not delay.

Water damage to the interior of a unit arising from a leak somewhere in the structure of the building (common property) is a common example. The loss you are able to recover from the owners corporation may include any lost rent as a result of a tenant having to vacate the unit whilst repair works are being undertaken; it may also include your own alternative accommodation costs if you have been forced to vacate. The loss only needs to be “reasonably foreseeable” and not too remote.

In the first instance upon becoming aware of damage you should notify the owners corporation or the strata committee immediately.

The owners corporation may well have rights against the original developer or builder to have them rectify the defects at their own expense, or a right against them to recover damages arising from a breach of statutory warranty or duty of care. There are limitation periods involved with any such proceedings so time is always of the essence. Many of these warranties and duties of care will still be in place where the building is less than 10 years old or the building work giving rise to the damage is less than 6 years old (in older buildings).

As the owner of the unit you have an obligation to allow the owners corporation (by its agents, employees or contractors) reasonable access to your unit to inspect the damage and to undertake any rectification works. This obligation may at times need to be handled delicately, especially where the unit is being tenanted. Both sides need to give adequate notice and this may necessitate keeping the tenant and your property manager in the loop.

If you are unsatisfied with the owners corporation’s response, you may initiate a formal dispute. Often the strata scheme will have a dispute resolution process set out in its by-laws so it is a good idea to obtain a copy from the strata agent.

If this process does not yield results then you may have to elevate the dispute to a complaint to Fair Trading NSW who will undertake its own investigation including holding a formal mediation. If this does not yield results, the matter may end up in the NCAT.

Strata disputes are never enjoyable. They can be protracted and disastrous for the community well-being within the building or development. You must always: be cooperative with all stakeholders as much as is reasonably possible; keep immaculate documentation and records, whether of the damage, correspondence, or your expenses; act at all times without delay.

If you find yourself in a dispute with strata, you need the right legal advice to step you through the process. Contact Hamilton Mott today.