[Austman]

@Miranda said:

I thought the Management only took instruction from the committee as a whole

They really should, but they in fact don’t have to.

At each AGM, the powers of the OC (except for matters requiring special or unanimous resolutions) are usually invested in both the manager and the committee.

Many managers, if the manager thinks the issue is straight forward or fairly minor or appears to have majority committee agreement, will go ahead after a reasonable request from a committee chair.  Technically they don’t need a committee decision as they have the authority to act themselves.  But good managers should be satisfied that there is majority committee agreement after all committee members were consulted.   Email evidence of that majority is enough for many managers in Victoria.

Why not tell the manager that your committee is sometimes not fully consulted or given a chance to vote if that’s the case?   The manager should then in future pay more attention to the consultation and voting process.

[Austman]

@scotlandx said:

If you live in a house on a property and a tree on your property falls on your neighbour’s house and damages it, you will be liable for that damage.  That is because it is your tree.  Whether or not you knew the tree was unstable, or whether wild storms brought the tree down, it’s your tree wot done the damage.

Sorry scotlandx but I don’t think that’s correct.  An owner of a strong, healthy tree that falls is not liable for any damage it causes to a neighbour property.  It is considered “an act of God” under Australian law.   And it shows how ownership of something does not automatically mean liability for the damage it might cause.

I realise a water pipe, dishwasher or other equipment is not a tree but negligence or malicious intent or a breach of a duty of care seem to be a requirement when establishing property damage liability.  At least in published cases I have read.  But I’m no lawyer either!

[Austman]

@scotlandx said:
Austman – the issue is not whether the owner of something that causes damage has done anything wrong.  The question is who owns the thing that caused the damage.  The owner is liable for that damage.

But is that the law in Australia?

I’ve read published tribunal and court cases where, in the absence of negligence or malicious intent or a failure to exercise a reasonable duty of care, an owner of something that has caused damage has been deemed not to be liable for the damage it caused. Eg a clock radio in a rented home spontaneously caught fire which caused major damage – the court ruled the tenant not to be liable because there was no negligence.

And how about an OC owned pipe inside a wall that burst when it couldn’t have been predicted or prevented?   Where the contents of a lot were subsequently damaged by water.   I realise the OC must repair the pipe and the OC’s insurance might cover the damage caused.  But is the OC actually liable for the damage caused to the lot contents?   Or should the lot resident be claiming on their own contents insurance?

Does liability always fall to the owner?  Maybe it does.   It seems unclear to me.

[Austman]

@welld551 said:

I was told my tenant was contacted and their remote reprogrammed.

It’s bizzare that you, especially as an EC member, were not contacted!

Regardless, you are entitled to a reprogram/replacement of your remote.

It is an absolute right, as an owner, to be able to access your private property 24/7.   All OC supplied remotes should be reprogrammed/replaced if the access code was changed.

[Austman]

Very good article Jimmy.

I wonder about: “Either way, they are responsible for damage caused by the failure of their domestic equipment.”

As for dishwashers – I can report mine did flood once (well twice actually).  It turned out to be a fault with the main pump.  The manufacturer’s authorised repair person stated there was nothing I could have done to prevent it – it was just plain bad luck that it failed after less than 4 years.    Unfortunately when installing the new pump, the authorised repairer didn’t attach a hose to the pump (inside the machine) quite correctly.  The result was that eventually the hose slipped off and the dishwasher flooded a second time.

Is it the case that I would have been personally held responsible for the flooding, even if I reasonably could have done nothing (both times) to prevent it?

I’m not meaning to disagree with you.  I’d genuinely like to know what is the actual legal situation where incidents like these happen and the owner of equipment that failed didn’t seem to do anything wrong and could not have reasonably been expected to have prevented it. Would the absence of negligence or malicious intent together with a reasonable duty of care mean I might not be personally responsible for the flooding caused by the equipment failure?

Of course, if everyone is insured (as they should be), the insurance companies would work it all out.

[Austman]

@powers that be said:
I would have thought that it was obvious that the person responsible for the damage pays to have it fixed.

It’s not always so.  Generally negligence has to be proved (tort law), but it can vary.

As per Whale’s advice, it’s often better for the damaged party to claim on their own insurance and leave any subsequent claiming of damages up to their insurance company.  There is the matter of excess I know.

But if nothing else, the damaged party’s insurance company should be able to give advice on the best course to follow.

[Austman]

I can understand the sentiments here and I support them.

But VCAT has to decide on points of law (not public sentiment).

And they have found that the OC Act doesn’t allow an OC to make rules that restrict short term rentals.

So the VCAT decision needs to be challenged or the OC Act needs to be changed. Or the matter has to be handled outside the OC Act altogether (eg by a planning authority).

If there’s another alternative, I’d really like to know what it is!

[Austman]

@JimmyT said:

The questions now are, will the Owners Corp take this to the Supreme Court? And how many other by-laws that stray into other areas of legislation – such as pet ownership and parking – may be invalidated because they ‘over-reach’?

One problem for an OC in Victoria wanting to take the matter to a higher court is that it needs a special resolution (OC Act s.18).   As I know only too well, a special resolution in a large OC is very difficult to obtain (at least 75% must (1) actually vote and (2) vote for the resolution for it to be passed or 50% for and not more than 25% against for it to become interim).

If there is the desire, the state government could amend the OC Act to allow OCs to make rules about leases.   But in Victoria new rules also need a special resolution.  In many OCs rules are created by the original developer when they have 100% voting power.   Still, allowing the rule would at least give OCs the chance to determine how their building is used.

[Austman]

When you read the VCAT decision in full, I think that no other result could have been possible.  It’s not VCAT’s fault if they interpreted the law correctly.

But perhaps the issue can be better resolved by local planning authorities?

AFAIK, OC’s are not permitted to break planning laws and I have read VCAT decisions where they have stated the same.

[Austman]

@JimmyT said:

@Austman said:
If we had just renewed directly with that company it would have saved us quite a hefty sum.

Errr… no you wouldn’t because the Insurers won’t pay you the commission or discount it from your premium.

I see.  So in effect the insurance companies offer the policy to brokers at a discount compared to any direct strata customers?   So their premium remains the same regardless of if you use a broker or not?  

If that’s the case then I suppose we’ll be sticking with the broker.

[Austman]

I’d still like to know what law(s) would apply.

I don’t think it will be the Electricity Supply Act (or equivalent).   That seems to apply to “a network operator’s or retailer’s electricity works”.  And it’s the same or similar in Victoria.  I’ve spoken with our electricians and a representative from our electricity distributor and they both pointed out (they were physically on site at the time) that the building’s switchboard is not the distributor’s (or the retailer’s) equipment.  It’s privately owned.  As is the switchboard in a house.  And similar to a house, if a switch in the switchboard was flipped off it would not be the distributor’s or the retailer’s concern – the owner can do that if they want.

So is it the OC Act only that applies?

If one of our residents did turn the power off to another resident (and I’d hope they never would) , could and would the police take any action or would they see it as a domestic civil matter and leave it to the OC to solve? 

Of course any OC would try to resolve the matter.

[Austman]

Feedback from the residents in the building near the apartment is that they were pretty noisy from before 6am.   The radio morning show is 6am to 9am.  They left the apartment door open during the event and there were dozens of people coming and going.

And the building’s rubbish bins that had just been collected were totally filled.

I suppose it was a bit like a party, but at 6am.  And done as a business event for the radio station.

I think you are right Jimmy.  We worked out the “secret location” and saw them setting up the event the day before.  But to try to pull the plug on it would have seemed mean spirited.

A long as it’s not a regular event that is…

[Austman]

There is a nearby development about every 6 months in the area of my OC (inner Melbourne).

The council sends out notices to all affected residents for their comments.  The council’s mail is to an address only, not to a person.  Major works are also advertised on the affected property itself.

We on the OC committee sometimes send out an email to all our residents and owners (including non-resident owners as well) if we think there are potential issues that will affect our building.

[Austman]

This is such an important strata issue, so I’ve tried to make a summary:

1. An Owners Corporation/Body Corporate is a legal entity and as such is legally liable for damage that it is responsible for.
2. Courts in Australia have ruled that liability generally requires negligence.  ( source: https://www.lawhandbook.org.au/handbook/ch18s01s02.php )
3. With few exceptions, an Owners Corporation/Body Corporate must have building insurance.
4. An Owners Corporation/Body Corporate must have liability insurance.
5. The Owners Corporation/Body Corporate’s building insurance must cover the Strata Act’s definition of a “building”, for insurance purposes, which usually includes lot fixtures and fittings but can exclude temporary wall, floor and ceiling coverings (e.g.  carpet, wallpaper) and, in NSW,  paint.
6. Some insurance companies might decide to pay for damage beyond their policy requirement.  That’s a decision of the insurance company.
7. An Owners Corporation/Body Corporate might decide to pay for damage beyond its legal obligation.  That’s a decision of the Owners Corporation/Body Corporate.
8. An insurance policy exclusion does not mitigate an Owners Corporation/Body Corporate’s liability for damage that it is responsible for.

I’ve been personally involved in many strata insurance claims in NSW, VIC and ACT.  Both as an OC committee member (NSW, VIC) and as an owner (NSW, VIC, ACT).  So I know how complex it can be.

Any changes or edits?

[Austman]

A difference between NSW strata building insurance requirements and other states (VIC at least) seems to be this:

NSW states: (s.81) a building includes: “owners’ improvements… other than paint, wallpaper and temporary wall, floor and ceiling coverings”

VIC states: (s.54) a building: “does not include carpet and temporary floor, wall and ceiling coverings”  (so paint and wallpaper are not specifically mentioned)

I know that what Garbla says has been said before –  to choose the same insurance company as the OC for private lot contents insurance.  But that requires synchronising lot cover with the OC’s  insurance renewal date.  Because the OC could very well renew with another insurance company on that date.  So it’s really a bit easier said than done.

The above doesn’t change the OC’s negligence responsibility.  But it does mean that insurance companies can cover things like paint  regardless of negligence (but not always in NSW).

[Author]

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