Tenants can take OCs to NCAT over defects

Tenants have the legal right to take their owners corporations to a NSW Tribunal to force them to fix faults in common property, an NCAT Appeals panel has ruled, but they should not be expected to do so.

This was established in a case concerning a tenant who successfully claimed a reduction in rent due to water leaks in her flat, resulting damp and mould, because her landlord failed to pursue building defects with the owners corporation.

But she was originally denied additional compensation, the original Tribunal ruled, partly because she could personally have taken the owners corporation to NCAT over the faults in common property that caused the leaks.

That, the original Tribunal said, was a missed opportunity to “mitigate” the cost to her personally.

However an Appeals Panel has now ruled that, while the renter, as an “interested party”, had the right to take action against the owners corp for failure to maintain and repair common property, it was not reasonable to expect her to do so.

The tenant of an apartment in Drummoyne, Sydney, had succeeded in obtaining the rent reduction for the landlord’s breach of his obligation to keep the premises in a reasonable state of repair.

The Tribunal agreed that the landlord could and should have compelled the owners corporation to investigate and repair work to common property to prevent water leaks into the rented flat.

However, the Tribunal rejected the tenant’s claim for $10,000 in compensation for breaches of her right to quiet enjoyment of the premises, resulting in, she claimed, anxiety, inconvenience, disappointment and embarrassment.

The original tribunal ruled that, had they been awarding compensation – which they weren’t – it would have been reduced because she had made no effort to mitigate the problem by personally demanding that the owners corp have the faults repaired, as she was entitled to do.

In a somewhat arcane decision, which involved a claim, later withdrawn, that the landlord had evicted the tenant in retaliation for her Tribunal actions, the NCAT Appeals Panel agreed with the original finding that the tenant wasn’t entitled to compensation, for a number of reasons, including:

1. She was getting a rent reduction so compensation would have been double-dipping
2. A supporting letter from her physiotherapist that she had suffered mentally and emotionally was inadmissible since the physio had no professional qualifications to make that assessment
3. The claim for compensation for mould was neither a receipt for work done nor a proper quote for work that needed to be done.

However the panel noted that if they had been awarding compensation they would not have reduced it on the grounds that she failed to mitigate her loss by not pursuing the owners corp at NCAT to fix the leaks.

“It is tolerably clear that any proceedings the appellant brought against the body corporate would have been uncertain as to outcome, complicated (at least factually) and difficult (for a non-legally qualified and unrepresented person),” the Appeals Panel ruling says.

It added that “the Tribunal erred in failing to make any findings of fact to the effect that, had the appellant litigated as the Tribunal suggested, she probably would have succeeded and probably would have obtained a particular result.

“Mitigation is a question of fact, and factual findings would need to have been made in order for this defence to have succeeded.”

So there you have it; tenants can legally take their owners corporations to NCAT to compel them to fix defects, but it doesn’t make any difference to claims for compensation if they don’t – it’s still the landlord’s responsibility and they could lose rent if they do nothing.

You can read the details of the case and the Appeals Panels full report HERE.

As to why a tenant would ever take their owners corp to NCAT over defects, there are some very real circumstances where it might makes sense, as we discuss on this week’s podcast.

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