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Hi Rita
I am still a little bit in the dark particularly to whether your HOW claim is being (a) managed by a solicitor and (b) whether you have an expert under the Uniform Civil Procedures Rules or the CTTT Expert Code of Conduct engaged. Possibly not by the statements in your email, it would seem that the Owners Corporation is attempting to run its own claim. I want to be helpful not critical but if the OC is running their own claim they need to get some advice from an experienced strata solicitor particularly experienced with HOW matters.
I’ve printed off the strata plan and I can confirm that the subject storage areas are part of common property even though they are allocated as exclusive use to the units.
I notice that Rob T has logged onto Flatchat and given you some advice, and this advise is quite reasonable in regards to establishing that the materials are not fit for purpose and to give you some guidance to the remedial methodology, however Rob has missed the point of your email and that is that its under a HOW claim. To establish a defect as a recognised expert under the Expert Code of Conduct you must establish that one or more of the statutory warranties under the Home Building Act 1989 has been breached. I can advise you as a senior court expert that in my view statutory warranties (a) (b) and (e) have been breached (see below);
18B Warranties as to residential building work
The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work:
(a) a warranty that the work will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract,
(b) a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new,
(c) a warranty that the work will be done in accordance with, and will comply with, this or any other law,
(d) a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time,
(e) a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling,
(f) a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder’s or person’s skill and judgment.
Accordingly as this is common property it is clearly a structural element of the façade and the statutory warranties have been breached I have no idea why the insurer has rejected this item.
What are your options
If the OC has engaged a lawyer to lodge and manage the claim, then they really should be able to deal with this issue. Your expert under the direction of the lawyer should be able to place a very firm argument that this matter should be accepted as part of the claim.
If the OC hasn’t engaged a lawyer or your expert is not supportive of placing an argument, then an obvious question needs to be raised to whether any other issues have been missed or not supported by relevant argument. Its not too late to get a solicitor involved, so it would be my strongest recommendation to get this claim managed correctly. I word of caution for all OC dealing with HOW claims, if you deal with them yourself the insurer may well offer you a settlement and with it a settlement agreement to sign. Be very careful that you do not waiver your rights to making further claim which is a normal standard clause within insurers settlements agreements and this is just one issue to why you need to have a solicitor involved. Normally the solicitors fees can be reasonably recuperated from the insurer, but in making this statement you need to disucss what component of the fee and when solicitors and experts fees can be recuperated with your instructing solicitor.
Summary
The bottom line is that if we were dealing as the experts in this matter we would not accept any argument placed by the insurer that this is not a legitimate defect as applied under the statutory warranties and remedial repairs must proceed. It is obvious to me from the photographs that the materials used and the manner of installation is not fit for purpose.
I can’t help you any further without being engaged. We are happy to help however you’ll need to discuss this with your Executive Committee. I hope this is of some assistance to give you some direction. If you haven’t appointed a strata solicitor and you have no idea where to start, we can give you a short list of solicitors experienced in this area and you can make your own enquiries.