Some of Netstrata’s Administration Team have been studying hard to complete their Certificate of Registration. It is not compulsory for Administration to complete this qualification but they decided to better their Knowledge so that they can competently assist Owners will smaller questions or enquiries and today they received their Certificates.
Well Done Team.
Overhanging or invasive trees are a common cause of dispute in strata communities and otherwise. There are steps and measure you can take to avoid these disputes escalating out of control.
Read this week’s training note and Many thanks to TEYS lawyers for this article here are some tips on how not to go too far!
Each state and territory by now has its own legislation about tree disputes and if a dispute goes far enough, then these laws should be referenced. This note looks at the common law and some common sense on the topic.
There are trees to avoid planting and places to avoid planting them. A rubber plantThank you TEYS Lawyers.
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.
Last Friday evening the Team at Netstrata celebrated the opening of their Wollongong office at the Ibis Hotel in Market Street Wollongong directly opposite their new office. Licensee Tanya Gough said “It is fantastic to provide a strata alternative to the Illawarra”… A fantastic night was had by all.
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 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).
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
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.
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.
In deciding what is a sufficient dividing fence, the court will take into account the following:
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.
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.
If there is a dispute about the boundary line, then the act provides for this to be determined by a registered surveyor.
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.
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
Over the past 12 months unit values have increased by 0.1% across the combined capital cities compared to a value fall of -2.0% for houses. In fact, unit values have increased at a rate faster than house values for most of the past five years as home buyers search for more affordable housing options.
According to the RP Data-Rismark Home Value Index, unit values across the combined capital cities have increased at an average annual rate of 6.3% over the past five years compared to growth of 5.7% for houses. More recently, the 12 months to April 2011 have seen unit values increase by 0.1% while house values have fallen by -2.0%.
Thanks to RP Data for this Article.
The proportionate liability provisions in Part 4 of the Civil Liability Act 2002 (“CLA”) apply to claims for breach of statutory warranty under the Home Building Act 1989 (“HBA”), according to the recent decision of the Supreme Court in Owners Corporation SP 72357 v Dasco Constructions Pty Limited & Ors [2010] NSWSC 819 (Unreported, Einstein J, 27 July 2010) (“Dasco”).
The decision has potentially wide-reaching impacts on the rights of owners corporations to sue builders and developers under the HBA, and may affect both new and existing proceedings.
The proportionate liability regime introduced by the CLA deals with the manner in which liability is apportioned where damage was caused by a number of “concurrent wrongdoers”. The provisions may apply to certain proceedings commenced on or after 1 December 2004 (subject to certain exceptions).
In a claim for breach of statutory warranty, potential “concurrent wrongdoers” include the builder, developer, designers, certifiers, Council, supervisors, sub-contractors and others.
The position before the CLA applied Before the introduction of the proportionate liability regime, where a number of wrongdoers were liable for the same damage, a plaintiff could sue any one of those wrongdoers for the whole amount of its loss (subject to the limits of its cause of action and any defences available). This approach effectively left it to the defendant and any other “wrongdoers” to apportion liability between themselves (for example, by way of bringing cross-claims against each other).
The position under the CLA In contrast, under the proportionate liability regime, the plaintiff is only able to recover from a defendant to the extent that the Court considers “just” having regard to the extent of that defendant’s responsibility for the damage—regardless of whether all the relevant wrongdoers are defendants in the proceedings (or even whether they could be joined to those proceedings at all).
Accordingly, a plaintiff may find itself unable to recover for substantial proportions of its damage, as the “concurrent wrongdoers” with the greatest share of the liability may be unable to be pursued. This could be because they are bankrupt, in liquidation, dead, or disappeared, because a relevant limitation period has expired, or because of limitations on the jurisdiction in which the claim was originally brought.
Alternatively, to maximise its ability to recover, a plaintiff may be forced to run complex and expensive proceedings against multiple defendants on multiple causes of action (and perhaps in multiple jurisdictions).
Builders and developers may seek to reduce their liability under the statutory warranties by alleging that parties such as designers, certifiers, Council, supervisors, sub-contractors and others were “concurrent wrongdoers”.
Strata schemes may be unable to pursue those “concurrent wrongdoers” due to factors such as insolvency or expiry of time limits. If those other parties can be pursued it may be complex and costly.
Some proceedings may need to be transferred to other forums due to jurisdictional issues (for example, the Consumer, Trader and Tenancy Tribunal may not have jurisdiction to hear certain types of claims against some “concurrent wrongdoers”).
Claims by strata schemes against developers may be particularly affected, as it is expected that Courts will consider the builder or others to have the largest share of liability.
This area of law is still developing and more authorities are expected. We are aware of other proceedings in which the authority of Dasco may be challenged. We note also that the issues may be addressed by legislative change.
Thanks to Mills Oakley Lawyers for supplying this article
An owners corporation’s obligation to repair and maintain common property extends to rectifying damage to common property caused by building works carried out by an owner.
However that owner may be liable to indemnify the owners corporation for the cost of those works, and to compensate other lot owners for damage done to their lots, either under the general law of nuisance or as a breach of a duty in section 117 of the Act.
The owners corporation’s statutory powers under section 63 of the Act to undertake works and recover the costs from an owner do not apply in such circumstances unless adjudicator’s orders or orders of the Consumer, Trader and Tenancy Tribunal have first been obtained under the Act for the owner to do the works.
The compensation that a lot owner is entitled to will ordinarily be based on the cost of repairs to their lot, and not repairs to common property affecting their lot, as that common property damage does not directly affect the value of their lot (due to the owners corporation’s obligations to effect the necessary repairs).
The decision in Stolfa v Owners Strata Plan 4366 & ors [2010] NSWSC 1507 (Unreported, Brereton J, 23 December 2010) is the latest in a series of significant judgments in a long-running strata dispute.
In the original Supreme Court judgment of June 2009 (unaffected by an unsuccessful appeal to the Court of Appeal) lot owners John Hempton, Joanna Kalowski and Stephen Hempton (“Hemptons”) were held liable to compensate lot owners Veronica and Raffaele Stolfa (“Stolfas”) for damage done to the Stolfas’ unit by works carried out by or on behalf of the Hemptons to their units. In the present case, the Court sought to determine the extent of that liability, and additionally the impact of the owners corporation’s obligation to repair and maintain the common property.
The Hemptons were held liable to the Stolfas in respect of damage to the Stolfas’ unit. The Hemptons’ liability in this regard arose from their statutory duty in section 117(1)(a) of the Strata Schemes Management Act 1996 (“Act”) to not use or enjoy their lot, or permit their lot to be used or enjoyed, in such a manner or for such a purpose as to cause a nuisance or hazard to the occupier of another lot (or alternatively under the general law of nuisance).
The Court’s decision in this regard is significant in providing authority that occupiers may have a private cause of action to seek damages or other compensation from lot owners who breach the statutory duty in section 117(1)(a) of the Act.
The Court held that the owners corporation’s obligation to maintain the common property extended to rectifying the damage to common property that was caused by the Hemptons’ works. However, because the damage to the common property was caused by the Hemptons, they were held liable to indemnify the owners corporation in that respect.
Importantly, however, the Court held that the owners corporation’s statutory powers to undertake works and recover compensation from an owner under section 63(4) of the Act did not apply in these circumstances, as on a strict reading of the section, although the Hemptons had a statutory duty under section 117 of the Act, that duty did not require the Hemptons to effect the necessary repairs.
The Court further held that an order of the Supreme Court would not trigger the owners corporation’s power to do the works and recover the costs through section 63(5) (regarding works required to be done by a person under an order), holding that the section related only to an order of a Strata Schemes Adjudicator or the Consumer, Trader and Tenancy Tribunal made under Chapter 5 of the Act.
Instead, the Court held that the Hemptons’ obligation to indemnify the owners corporation arose under the general law of nuisance (the duty in section 117(1)(a) not being relevant as it is owed to occupiers, not the owners corporation).
The Court awarded the Stolfas compensation based on the cost of repairs to their lot, and additionally alternative accommodation (including parking), removal and storage costs. The Court noted that, if the owners corporation struck a levy to fund the common property repairs, the Stolfas would be liable to contribute according to their unit entitlement. However, as that liability would be incurred due to the Hemptons’ works, the Court held that the Stolfas should be indemnified by the Hemptons in that regard.
However the Court held that the Stolfas were not entitled to direct compensation for the cost of rectifying damage to common property associated with their lot, as the obligation of the owners corporation to effect the necessary repairs meant there was no diminution in the value of the Stolfas’ lot.
Despite this, the Court nevertheless awarded the Stolfas damages for the “risk, vexation, inconvenience and uncertainty” of the enforcement of the obligations of the owners corporation and the Hemptons to respectively do, and pay the costs of, the common property rectification works (in the amount of 10% of the cost of the common property rectification works).
Thanks to Mills Oakley Lawyers for providing this article.
In the recent decision of Borg v The Owners – Strata Plan 64425 [2010] NSWDC 203, the District Court of New South Wales found that both the caretaker of an owners corporation, and that owners corporation itself, were liable for an injury suffered by a lawful entrant to property that was effectively under their management and control.
In a significant development for both caretakers and strata managing agents, the Court—when apportioning liability between the caretaker and the relevant owners corporation—held the caretaker liable for 80% of the total damages, and the owners corporation for only 20%.
Ms Borg, a guest at the Quest Apartments at Cronulla, suffered various injuries when she fell after the heel of her shoe became caught in a broken tile on a flight of stairs at the property. The Court awarded Ms Borg over $517,000.00 for her injuries, apportioned between three owners corporations (who collectively formed the Building Management Committee for the property), the operator of the hotel, and the caretaker (to whom one of the owners corporations had delegated its functions in respect of maintenance of the property).
Liability of the owners corporation The Building Management Committee for Quest Apartments comprises 3 separate Strata Plans, known as the Investment Apartments, Tourist Apartments and the Residential Apartments. Whilst the broken tile on which Ms Borg fell in fact formed part of an encroachment onto the Council footpath—and accordingly was neither common property in any of the strata schemes, nor a shared facility under the Strata Management Statement—the Court found all 3 Owners Corporations liable due to their effective “occupation” of the set of stairs of which the broken tile formed part. The Court said (at 41):
Because the question of control is a question of fact, attempts to evaluate the question by reference to notions of legal rights are flawed, such as whether the encroachment gave rise to any equitable interest, or whether the effecting of repairs might constitute an unauthorised technical trespass. What matters is the exercise of immediate supervision and control.
And further:
In this case, that exercise is demonstrated by the continuing assumption of possession and the representation of control, by reason of the continuing retention of the encroachment, and the invitation that the configuration of the tiles relative to the footpath represented to users of the stairs to cross that land with a view to accessing or egressing the entranceway.
Whilst this finding does not mean that an owners corporation will necessarily be liable for all injuries sustained outside its premises, it makes clear that the touchstone of liability in these circumstances is not ownership of the land or the legal right to repair it, but the factual issue of exercise of immediate supervision and control.
The agreement in place between the owners corporation responsible for the Tourist Apartments and the caretaker effected a delegation to the caretaker of the owners corporation’s functions in respect of the maintenance, repair and replacement of the common property, of which the tiled stairs formed a part. Again, in the Court’s view this was sufficient to ground a finding that the caretaker was an “occupier” of the broken tile, despite it actually lying beyond the boundaries of the common property as discussed above.
The owners corporation and the caretaker filed mutual Cross Claims against each other. The Court carefully considered the wording of the caretaker agreement, having particular regard to the obligations on the caretaker to “care take” the common property, to conduct regular inspections and arrange for repairs to the common property, and to immediately report to the owners corporation hazards or dangers in the common property that came to the caretaker’s attention.
The Court concluded that the owners corporation had delegated to the caretaker responsibility for minor handyman repairs, which the Court considered would include temporary repairs to the hole in the cracked tile (such as were later carried out) as well as to inspect and report on more serious defects and arrange for their repair (including replacement of the tile itself).
Thanks to Mills Oakley Lawyers for providing this article
