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A version of this article has also appeared on the Sydney Morning Herald’s online pages and in the print edition of Domain.
QUESTION: Tenants broke a waste pipe which is attach to the garage wall inside the garage. They hit it whilst entering or exiting the garage. The owner has asked the Owners Corporation to have the pipe repaired.
My question is who should pay for repair as the damage is obviously done by the tenant and our owners corporation are getting sick and tired of fixing things that are always broken by tenants. – RTNQ, via Flat Chat Forum.
ANSWER: We got a response to this as soon as it hit the Flat Chat website.
“As a building manager of a very large scheme in Sydney the process we follow is that the OC would fix the pipe then invoice the owner of the lot,” says Flathcatter Luke. “The owner of the lot could then chase the tenant for the cost of the repair.”
Seems perfectly fair to me although, I have to say that if I was the landlord I would want some sort of proof that it was the tenants (although, as we know, it’s only ever tenants who damage common property).
In most cases if I were the landlord, the word of the building manager would be good enough for me – but would it be enough at the tenancy tribunal if you took the cost of repair out of the bond?
That said, there are owners out there who think “the strata” is going to pay for everything, regardless of who’s to blame, presumably from the Tooth Fairy Fund.
And there are strata schemes where they do just that in a kind of all for one, one for all, hassle-free, Utopian existence where it all evens out in the end. Bless!
But for those of you who need a bit more certainty in your dealings with neighbours, there are two basic principles to follow.
The first rule is that if you break common property, you pay for its repair. The second is that landlords are responsible for the behaviour of their tenants and, while you could theoretically pursue tenants for breakages, it’s easier for the owners corporation to chase the landlords and let them get the money back from the renters, where appropriate.
It also makes the landlords just a bit more cautious about who they inject into strata communities if they know there are consequences when things go wrong.
There’s more on this HERE on the Flat Chat Forum.
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HiJim,
The insurance answer to this is not that simple.
Generally strata policies cover impact damage. Normally pipes are considered part of the strata building and insurers all apply different policy limits. There are many things to consider such as, what is the excess under the policy and who pays? Can a landlord recover costs from a tenant? What is in the lease agreement and will the bond be sufficient to cover the cost of the damage? Is this a claim under the tenants car insurance? If the Strata lodges a building claim, can the insurers recover the cost of the claim from the tenant?
The other big factor is if there is a claim made under the building policy, will the Strata be penalised on future renewal premiums and increases to excesses? So you can see it is not as straight forward as we all would like trying to determine who is responsible for paying the costs of the damages.
Landlords need to aware that the building forms part of a strata and it is still their responsibility for maintaining and repairing their property. From my perspective, it is prudent that professional advice is sort to ensure that the strata policy complies with state regulations and adequately protects the interests of the Owners Corporation and property owners.
Ah yes Lia these are all pertinent questions. Questions which we would expect a professional and experienced insurance broker to be easily able to answer.
Yes there are different policy limits and excesses but apart from this there is very little difference between the major residential strata insurance policies (except possibly where damage is caused to a floating timber floor that is not attached to common property).
We recently added a fire alarm by-law so we can recover costs from owners and tenants who set off false alarms as we were getting charges from the NSW fire brigade. The tenant was charged via their real estate agent. The matter was take to the tribunal and we were successful, however on appeal we lost. The tribunal would not accept a stat dec from the building manger who was in the building at the time. Unfortunately the fire brigade report in this instance didn’t note the apartment but just the cause of the alarm. We are now discussing what to do. The owner argues they can’t be held responsible as they’ve vetted their tenant properly. Looks like we will have to wear this one and get harder on the fire brigade to ensure we get the correct information.