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I am sorry that you, i.e Scottie and Jimmy -T, do not see the relevance and logical sequence of the sections quoted in support of my argument, that by-laws in NSW requiring renovation bonds, are invalid, just as they are in Queensland.
I acknowledge that there is no specific section in the NSW legislation stating that a by-law must not impose a monetary liability on the owner of a lot (other than an exclusive use by-law) as there is in Queensland.
However section 136(2) states that a by-law has no force or effect to the extent that it is inconsistent with this or any other Act or law. Also the owners corporation can only do the things which it is authorised to do under the SSMA 2015.
When a lot owner undertakes either cosmetic work (s109) and or minor renovations (s110) there is a requirement under both these sections that any damage to common property must be repaired by the lot owner. In the unlikely event that the damage is not repaired by the lot owner, then the OC may take action against the lot owner or carry out the work itself and recover the costs as a debt.[s120(5)].
Requiring a renovation bond in advance subverts the scheme of the Act in regard to owner renovations. What rights does the lot owner have, under the Act ,when the OC refuses to return the bond at all, or only returns a portion of the bond? In my strata block all the renovation bonds have been deposited to the Administration Fund and have been used to increase working capital.
The OC, in my strata block has refused to return renovation bonds even though there has been no damage to common property. The amount of the renovation bond was not specified in the by-law and is determined by the strata committee on a case by case basis.
Finally, I am only interested in the strata legislation being correctly interpreted and followed by all the people involved in the strata industry. However this has not been happening, since each group considers their own vested interests and there is definitely a bias in favour of owners corporations.
NSW by-laws requiring renovation bonds are invalid. [s136(2) and s139(1)]
Part 5 of SSMA 2015 provides for the management of the finances and the keeping of accounts and records of the strata scheme, which the owners corporation is responsible for, pursuant to section 9 (3) (a) and (b).
Section 73 (2) and (3) detail what funds can be paid into the Administration Fund and section 83 provides for the levying of contributions on lot owners.
There is no authority under any provision of the SSMA 2015, to allow an owners corporation, to require a lot owner to pay money to the owners corporation, on the chance that there may, or may not, be a debt due to the owners corporation in the future.
Legally, requiring payment of money when there is no debt due, is unjust enrichment on the part of the owners corporation at the expense of a lot owner.
If a liquidated debt is owed to the owners corporation, then it can be recovered by litigation in the normal commercial manner.[ s120 of SSMA 2015]
Under section 110 (7) (d) the Legislators appear to have assumed that “waterproofing” is common property. Section 110 is concerned with work, by a lot owner, to common property, in connection with the owner’s lot, for the purposes of minor renovations. The Legislators have not specified which “waterproofing” they mean. Therefore it could be on a balcony, on an outside wall, in a bathroom or somewhere else.
However if there is no waterproofing in a bathroom, then non-existent waterproofing cannot be common property. The waterproofing when laid by the lot owner, is lot owner property to be maintained by the lot owner.
The waterproofing cannot suddenly become common property. There are no provisions either in the SSMA 2015 or SSDA 2015 which allow this to happen.
It would be in contravention of basic property rights. It would be the same as saying that kitchen cabinets, when they are attached to a common property wall, suddenly become common property.
Also a by-law is not required because they are only written in respect of common property and the waterproofing is not common property.
Section 18 (1) of the SS(FD)A 1973 provides that – Upon registration of a strata plan any common property in that plan vests in the body corporate for the estate or interest evidenced by the folio of the Register comprising the land the subject of that plan but freed and discharged from any mortgage, charge, covenant charge, lease, writ or caveat affecting that land immediately before registration of that plan.
Section 21 of the SS(FD)A 1973 provides that – Common property shall not be capable of being dealt with except in accordance with the provisions of this Act and the Strata Schemes Management Act 1996 .
Hi Lady Penelope and Dingo
Yes, I submitted the same information in my strata application and I am still waiting for the Tribunal Member to hand down his decision. The interpretation of the legislation and the conclusions I have reached are entirely my own. I have however, thoroughly researched all the strata legislation since it was first enacted in 1961, together with all commentaries etc. available on the internet. I have also read every strata case which may have some application to my situation. I also researched building construction, plumbing and waterproofing and I have received advice from my Architect in this regard.
I do realise that my conclusions are at odds with what has generally been the accepted norm.
In my case all my proposed renovations fall within the provisions of either s109 or s110 except for the waterproofing. However there is no waterproofing in the existing bathroom, because there is no shower recess and there is only a bath. The building was completed in 1947 and the strata plan was registered in 1983. The OC has now accepted that there is no existing waterproofing, but they contend that once I lay the waterproofing it becomes common property and they want me to write a common property by-law covering all my proposed renovations.
At one of my directions hearings the Tribunal Member, who was very helpful, told the OC that they could not demand a common property rights by-law for works covered under ss109 or 110.
I did seek advice from a strata lawyer who told me I should withdraw my strata application immediately, since I would lose and have to pay costs.
Pursuant to the provisions of the Strata Titles (Freehold Development) Act 1973 the boundaries of a lot are defined as the upper surface of the floor, the under surface of the ceiling and the inner surface of the walls, in accordance with the formula set out in section 5 (2) (a) of the Act.
The structural elements of the boundaries of a lot are the floor and ceiling concrete slabs and the masonry brick walls, including the entrance door and the windows.
“Surface” is not defined in the strata legislation and over the years assumptions have been made that tiles on a bathroom floor and walls, form part of the structural elements of the building and are therefore common property. These assumptions have no basis in law or in building construction.
Tiles are merely a cosmetic covering to the floor and walls and have nothing to with the structural elements of the building. They can be compared to the painting or wall-papering of the walls.
Common property is the residual property that is not contained in a lot and it also includes structural cubic space.
Common property is determined by reference to the strata plan immediately before the date of registration of the strata plan and the relevant legislation. And if there are no notations on the strata plan then assumptions should not be made about what is common property, since this is in contravention of the Act.
Section 18 (1) of the SS(FD)A 1973 states
“Upon registration of a strata plan any common property shown in that plan vests in the body corporate for the estate or interest evidenced by the folio of the Register comprising the land the subject of that plan immediately before its registration.”
In Symes v SP 31731 [2001] NSWSC 527 para 62 Barrett J stated
“The question whether the items concerned are common property is a question of law for the reason already stated, namely, that it involves the conclusion that a physical item is within a statutory definition the content and scope of which depend upon the construction of provisions of the statute.”
Fixtures in a Lot
Under Real Property law a fixture, upon installation, is transformed from a moveable asset to an integral part of the real property.
However under the SSFDA 1973 fixtures within the cubic spaces of a strata title lot (not including structural cubic spaces) are part of the lot.
Therefore, even if such fixtures are fixed to a wall, floor or ceiling that is common property, the fixtures themselves are still owned by the registered proprietor of the lot.
If a lot owner’s property is attached to common property, the lot owner’s property does not become common property.
In Lawrom Nominees Pty. Limited v Kingsmede Pty. Ltd. and Anor [2000] NSWSC 1048 (14 October 2000) paragraph 65, Hodgson, CJ stated
“However, on further consideration I have concluded that all fixtures and internal walls within the cubic spaces of the lot (not including structural cubic spaces) are part of the lot. Paragraph (b) of the definition of “structural cubic space” makes it clear that the Development Act is not using the expression “cubic space” as excluding physical objects within the cubic space in question, but rather includes such objects if they are part of a “parcel”, that is, land. This approach is confirmed by Ilkin, Strata Schemes and Community Schemes Management and the Law (3rd ed), p.44. and Burgchard v. Holyroyd Municipal Council (1984) 2 NSWLR 164. “
Waterproofing
Section 110 (7) (d) of the SSMA 2015 provides that section 110 does not apply to “work involving waterproofing”.
“Work” in section 110(1) is a collective noun and is a general label referring to all work required for the purposes of minor renovations to common property in connection with the owner’s lot.
Section 110 (3) provides that
“Minor renovations” include but are not limited to work for the purposes of the following:
this means that for each minor renovation, listed in section 110(3) and in regulation 28 of the SSMR 2016, and other minor renovations not listed, all the works required to complete each minor renovation are included.For “work involving waterproofing” to be excluded from being a minor renovation under s110 (7) (d) there must be existing waterproofing in the bathroom and it must be common property. If there is no existing waterproofing in the bathroom, then s110 (7) (d) does not apply.
Therefore when a lot owner renovates their bathroom it can be approved under s110. The waterproofing when laid, by a licensed tradesman, in accordance with the Building Code of Australia and AS 3740 – Waterproofing of Domestic Wet Areas – remains lot owner property.
Laying tiles in a bathroom is not excluded from being a minor renovation.
Section 110 (8) provides that section 108 does not apply to minor renovations carried out in accordance with this section.
Section 108 (1) Procedure for authorising changes to common property An owners corporation or an owner of a lot in a strata scheme may add to the common property, alter the common property or erect a new structure on common property for the purpose of improving or enhancing the common property.
“Major renovation” is not mentioned in any section of the SSMA 2015, nor are there any deeming provisions in the SSMA 2015. It does not follow that just because “work to common property waterproofing” is excluded from being approved under s110 that it is automatically a “major renovation”.
Section 111 provides that work by owners affecting common property must be authorised in accordance with the Act. It covers cosmetic work, minor renovations, other renovations and work which falls under the provisions of section 108.
Lady Penelope
I think you may have misunderstood what I meant concerning common property.
The Common Property Memorandum is only another arbitrary generalised pronouncement of what is and what is not common property in a strata plan and who is responsible for its maintenance.
Each strata plan must be looked at individually. Generalisations are not helpful.
What is common property in a strata plan can only legally be determined by reference to the strata plan and what was in the building at the date of registration of the strata plan and any subsequent by-laws where the OC has added to the common property.
OC is responsible for the maintenance of the common property and they should not be trying to abrogate this statutory duty which was imposed on them at the date of registration of the strata plan.
I wholeheartedly agree with Penny Hill’s comments.
After failed mediation, in February 2017, instigated by the OC in October 2016; I made an application to NCAT pursuant to sections 126 and 127 of SSMA 2015. The Tribunal Hearing was held on 21 August 2017 with a reserved decision, for which I am still waiting!
I bought my unit in March 2011 in an uninhabitable dilapidated state and it is still in that state today. The OC has continually refused to authorise my internal renovations unless I wrote a common property rights by-law, previously an exclusive use and special privilege by-law, covering all my proposed works.
In 2014 the OC eventually signed our DA, which was approved by Council and a Construction Certificate was issued. Under local Planning laws it was necessary to lodge a DA because:-
1. the building is located in a Heritage Conservation Area and is a Heritage Item, and
2. we wanted to remove a non load-bearing wall
I maintained that a by-law was not necessary since we were not altering, adding to or erecting a structure on common property and there was already a building works by-law covering lot owner works. Other lot owners’ works were authorised by the OC under this by-law, prior to the new legislation coming into effect.
I also disputed what was and what was not common property in my lot.
Since strata legislation was first enacted in NSW, various government employees and others have been stating what is and what is not common property, without any of these pronouncements having the force of law.
They are only opinions and assumptions which have been made ignoring logic, what the legislation states and without any real understanding of what are the structural elements of a building.
The rights of a lot owner are subsumed by the rights of the OC. Strata Committees think they have an unfettered right to control lot owners and that a lot owner should not dare to disagree with what their strata lawyer says!
Over the years strata lawyers appear to have had a bias towards OCs in their interpretation of the strata legislation. They have advised OCs that common property rights by-laws are required in situations where they are not necessary.
This bias is also evident in their interpretation of the new strata legislation. OCs are requiring lot owners to write common property rights by-laws for works which are clearly covered by the provisions of sections 109 and 110 of SSMA 2015.
Most lot owners will write the by-law, even though they are now responsible for any problems with common property in the future which could be linked to their renovations. The only alternative is to go to NCAT and there is no guarantee of the outcome.
Going to NCAT costs time and money, but before you can apply to NCAT, you must go to Mediation, which is a complete waste of time. The OC always has the upper hand.
Supposedly, the new legislation, in respect of lot owner works within their lot, was enacted in order to make it easier for lot owners to do this work. Most lot owner works would involve work to a kitchen and bathroom, so why exclude waterproofing from being a minor renovation. Did the legislators still want to make it difficult for lot owners to do minor renovations in their lot?
Waterproofing in a bathroom is required in accordance with the Building Code of Australia and AS 3740 – “Waterproofing of Domestic Wet Areas”; a kitchen is specifically excluded from the definition of “Domestic Wet Areas”. Waterproofing must be carried out and certified by tradesmen specifically licensed to do waterproofing.
Section 110 (1) applies to “work” for the purposes of minor renovations to common property in connection with the owner’s lot. “Work” is a collective noun and means that for each minor renovation, as listed in s 110 (3) and in regulation 28 of the SSMR 2016, all the works required for the purposes of each minor renovation are included.
The work involved in a kitchen renovation would including disconnecting the lot owner’s plumbing from the common property stack and then reconnecting the new plumbing to the common property stack.
The exclusion, under s 110 (7) (d), of “work involving waterproofing” is only applicable if there is already waterproofing in the bathroom and that waterproofing is common property.
For waterproofing to be common property it must have been in existence when the strata plan was registered.
In old residential flat buildings there was no requirement for waterproofing in bathrooms if there was only a shower over the bath, and no shower recess.
In such a situation, s110 (7) (d) would not apply, as there is no common property waterproofing.
S 108 does not apply to building works which fall within the provisions of s109 and s110.
S110 (1) specifically states that a special resolution is not required to authorise minor renovations.
The requirement, by some owners corporations, of a common property rights by-law in order to approve minor renovations is a contravention of the SSMA 2015. These owners corporations seek to abrogate their statutory duty in respect of common property to the lot owners concerned.