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[ange]

 Hi

Our complex of 11 has structural and cracked render/painting issues with the cost of repairs now up to several 100s of thousands dollars. We have had reports done but any actual decision to undertake the work has now be deferred endlessly and has dragged on for close to 3 years.  Most of the townhouses are rented and I think that as long as the owners keep getting their rent they don’t care.  The committee is a joke – no working together with a ‘do nothing’ approach to anything and relationships are extremely strained.

I and another owner are frustrated that our properties are falling into further into disrepair and the cost of ever getting anything done is increasing alarmingly.

One owner has just sold at a price allowing for the ‘possible levy’ and this together with having to pay stamp duty and associated costs  on purchasing another (properly strata) property makes the temptation to sell less than attractive.

I understand that the special levy amount is daunting and I would rather not be up for it either however I’m not seeing another way to halt the deterioration of the buildings.   I have been photographing and documenting the saga for the last 5 years.

Has anyone had any success in Fair Trading / NCAT with getting a ruling to get large scale repairs done?

Any advice or tips appreciated.

Thanks

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[Lady Penelope]

Ange – Can you provide some additional information please?

What was the purpose of the Reports and the circumstances surrounding the obtaining of the Reports? Who undertook the Reports? What do the Reports recommend? And … are the cracks a structural issue or are they merely cosmetic? 

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[ange]

Hi

Reports done by an engineer at request of owners  to determine extent of subsidance of back 2 blocks and cracking to render.

There are 3 blocks consisting of 11 villas/townhouses. Report says – 2 blocks need underpinning with one needing some underpinning of side walls as well. Render has insufficient weepholes and is causing moisture and drummy  render. Needs at least half re- render, weephole replaced and 3 coats of paint. Complex is nearly 14 years old and has had no work done on exterior ever.

Report was made final Oct 2014 and quotes for work obtained. Option 1 – underpinning, necessary render repair/ weepholes and paint. Option 2 – underpinning, full render replacement/ weepholes  and paint. I’d be happy with option 1. An engineer has been managing the quotes and is recommending that due to set up cost the work be done in one go. The cost to each owner is substantial and it means some financial stress on everyone including me however what is the alternative??

Keeps getting deferred and deferred and no decision to do anything. The whole exterior is cracked with render crumbling off in parts and apparently major cracking inside back 2 properties understandable considering that they need underpinning.

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[Lady Penelope]

Before you take this matter to NCAT you would need to show that the OC has refused to undertake the work.

It is unclear from your comment whether these options for repairs have been raised in a Motion with Alternatives at a General Meeting, and voted on at a General Meeting. If these options have not yet been voted on at a General Meeting then there would not be sufficient grounds at this time to take this matter to NCAT, in my opinion.

However, if the issues of repairs and the raising of a special levy have been previously voted on and the majority vote was NO then you may have a case to take to NCAT. Can you please advise what actions have been taken to have this matter resolved so far?

From SSMA 2015:

106 Duty of owners corporation to maintain and repair property

 

(1) An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation.

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[Lady Penelope]

In addition to my response above here is an extract from the Office of Fair Trading web site regarding inaction on common property repairs:

If no action is being taken, a lot owner can put a motion requesting repairs to the next meeting of the owners corporation. If the matter remains unresolved, an application for mediation may be made with Fair Trading.

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[ange]

Owners have had the options since mid 2016. It was on agenda at last AGM  beginning February 2017. Deferred despite having advice from engineer engaged to manage quotes/ repair process to choose option and do all in 1 go to avoid paying considerable set up costs and ongoing large special levies.  Reason for deferral was more information though exactly what other than can we do it cheaper not minuted. Verbal word is only 4 / 11 owners acknowledge that work needs to be done. Investor owners only 1 turned up to meeting and agrees that work needs doing. I have requested an extra meeting be held to vote for last 2 months. I guess I will just have to keep asking and when ‘no’ minuted follow up through Fair Trading / NCAT. Painting of exterior was listed for 2016 in the 10 year plan and there isn’t even enough money in sinking fund to do 1/3 of just that job. Effecting my mental health quite badly. I will not be able to pay on going special levies.

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[Lady Penelope]

The fact that under the new Act an owner may now sue the OC for breach of statutory duty to repair the common property if they have suffered a reasonably foreseeable loss may be a ‘wake up call’ to those owners who lack motivation.  

Please read the following opinion from Moray and Agnew Lawyers, particularly the final comment about SSMA 2015 [s106(4)].

https://insurance.moray.com.au/publication/strata-plans-cannot-be-liable-to-lot-owners-for-failure-to-maintain-common-property-for-the-moment/

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[Jimmy-T]

Two things:  

Firstly, under section 232 (1, e) and (2) (below) you can take the owners corp to NCAT for failure to fulfill its statutory duties once you have asked them to do so.

Secondly, click on the ad for our sponsors Lannock and find out how much it would cost to get a strata loan to complete the works without everyone in the building being hit with a crippling special levy.

There really is no excuse for not pushing ahead with this – your committee needs a rocket under it and Section 232 is the one that lights the blue touch paper.

232 Orders to settle disputes or rectify complaints

(1) Orders relating to complaints and disputes
The Tribunal may, on application by an interested person, original owner or building manager, make an order to settle a complaint or dispute about any of the following:
(e) an exercise of, or failure to exercise, a function conferred or imposed by or under this Act or the by-laws of a strata scheme,

(2) Failure to exercise a function
For the purposes of this section, an owners corporation, strata committee or building management committee is taken not to have exercised a function if:
(a) it decides not to exercise the function, or
(b) application is made to it to exercise the function and it fails for 2 months after the making of the application to exercise the function in accordance with the application or to inform the applicant that it has decided not to exercise the function in accordance with the application.

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[dmuzicluva]

Further points to consider may include the following.

An action for damages for an owners corporations breach of statutory duty must be brought within 2 years of the owner becoming aware of the loss: s. 106(6) Strata Schemes Management Act, 2015.

However, the Act does not derogate from any rights or remedies which an owner may have in relation to any lot or the common property: s. 253(1). It would appear, therefore, that an owner can apply to the Supreme Court for an order (in the nature of mandamus) requiring the owners corporation to repair. It would also appear that the owner can sue the owners corporation in negligence and/or nuisance to the extent that the owner has suffered loss.

The Registrar of NCAT cannot accept an application unless mediation has been attempted but has been unsuccessful or a party has refused to participate in the mediation: s. 227(1).

If anyone has further thoughts I would be delighted to hear of them.

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