Monthly Archives: July 2011

Netstrata welcome the Monarco Estate

Netstrata is pleased to welcome the owners of the Monarco Estate Westmead.

The Monarco Estate is one of Western Sydney’s largest developments comprising of a community association and 4 separate high rise strata schemes comprising over 400 lots. The Estate also has fantastic facilities such as full-time caretakers, tennis courts, swimming pool, gymnasium and a kiosk.

Business Development Manager Jeremy Stone said “the scheme has had a number of strata managers to date, and after a long and extensive tender process we are very excited to have been selected and we look forward to rolling our sleeves up and adding some value to the project through hands on management”.

The strata scheme will be managed by 2 of Netstrata’s senior managers Peter Sawell and Brad Wood both are fully Licensed strata managers.

Strata-Management-Sydney-300x225

(HOW) Insurance accesses order of appeal

INTRODUCTION

The NSW Court of Appeal in Vero Insurance Limited v. Owners of Strata Plan No. 69352 & Ors [2011] NSWCA
138 on 30 June 2011 has clarified the amount of the excess payable by an owners corporation when a claim is
made on the Home Owners Warranty (HOW) Insurance in relation to common property building defects.
THE FACTS
The Owners – Strata Plan No. 69352 (The Owners) is a residential development consisting of 201 residential
units. Vero Insurance Limited (Vero) issued identical certificates in respect of insurance for all units. The Owners
made a claim on the HOW Insurance in relation to defective work on the common property in the amount of
$85,137.50. Vero rejected the claim. The Owners appealed the decision of Vero in the Consumer, Trader and
Tenancy Tribunal (Tribunal).
The Tribunal determined that the excess payable by The Owners was limited to the first $500 of the whole claim
of $85,137.50. Vero appealed the decision in the District Court of NSW. The District Court dismissed the appeal.
Vero then appealed to the Court of Appeal.
Vero contended that the Home Building Act, 1989 required it to provide insurance cover in relation to each
dwelling. Each lot in the strata scheme is a dwelling, which was insured separately. Vero submitted that the
common property in a strata scheme is not a “dwelling” for the purpose of the HOW Insurance, and that each lot
proprietor’s dwelling includes his or her beneficial interest in the common property as a tenant in common (that
is, some part of the common property was attached to each dwelling in the strata scheme). It was further
submitted that an owner corporation is not an insured under, or a beneficiary, of the HOW Insurance.

THE DECISION

The Court of Appeal held that The Owners was entitled to make a claim in its own right under the HOW
Insurance in respect of defective work on the common property.
The Court reached this conclusion by analysing the interplay between sections 18D and 99(1) of the Home
Building Act, 1989 and the relevant provisions of the Strata Schemes Management Act, 1996 and the Strata
Schemes (Freehold Development) Act, 1973. The Court concluded that the HOW Insurance had to insure The
Owners as the successor in title to the common property, against the specified risks. It noted that The Owners
could make the claim by virtue of section 227(2) of the Strata Schemes Management Act, 1996, or more simply
in its capacity as the registered proprietor of the common property and successor in title. As result, the Court
held that the Tribunal was correct. Only one excess of $500 was payable. The Court did not consider, however,
whether the cover provided by the HOW Insurance was limited to $200,000 only (being the minimum liability of
an insurer under the HOW policy in relation to each dwelling).

WHAT DOES THIS MEAN

The decision has two important ramifications for all owners corporations:
· In respect of a claim made on the HOW Insurance, only one excess of $500 is payable; and
· An insurer may be unable to rely upon the developer exclusion clause in the HOW Insurance policy to
limit or reduce its liability to an owners corporation in relation to defects in the common property. This
arises where a developer retains ownership of lots in the scheme at the time a claim is made, and the
insurer asserts that its liability is reduced because of this.

Thank you Grace Lawyers for Information Supplied

Dividing Fences

Part 1 in Solving Neighbourhood Problems

With the exception of noise, dividing fences are the source of most neighbourhood disputes. State legislation covers the rules for working out who pays for the dividing fence and also what happens if there are disputes about where the boundary lies. These laws apply to owners corporations and bodies corporate.

Basic Principle

The Dividing Fences Act 1991 (NSW) 1 provides that adjoining owners are required to share equally the cost of a “sufficient dividing fence”. If there is a dispute about the standard of fencing, one neighbour must give the other a fencing notice and disputes are heard in the local court. Mediation by a community justice centre is likely to be cheaper and less stressful.

What is a “sufficient dividing fence”?

Fence of strata schemeIn deciding what is a sufficient dividing fence, the court will take into account the following:

  • The standard of the existing fence;
  • The purpose of the fence;
  • The way the land on either side of the fence is used;
  • The privacy or other concerns of each neighbour; and
  • The kind of dividing fence that is usual in the area.

The basic principles of this act are reflected in other state based dividing fences legislation including the Dividing Fences Act 1953 (QLD), Fences Act 1968 (VIC), Common Boundaries Act 1981 (ACT) – the main difference is the issue of crown liability for dividing fences.

Who Pays?

The general rule provides for neighbours to equally share the cost. However, if one neighbour wants a fence of a greater standard than a “sufficient dividing fence”, then that neighbour will have to pay for the additional cost involved.

Boundary Disputes

If there is a dispute about the boundary line, then the act provides for this to be determined by a registered surveyor.

Encroachments

Encroachments (where buildings cross the boundary) are covered by the Encroachment of Buildings Act 1922. These are complicated cases, which can involve applications to the Supreme Court.

Avoiding Disputes

To avoid disputes about fences and boundaries, an owners corporation or body corporate needs to act reasonably and should take care to keep notes and written correspondence about the essential elements of the fencing proposition. Certainly a
neighbour who goes ahead and constructs a fence without first consulting and coming to an agreement with the other neighbour, might not be able to recover half of the costs. The community justice centres in New South Wales provide an excellent service in providing assistance to parties without the necessity of involving lawyers.

 

Thank you to Teys lawyers for this article