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Hi Jimmy
I’ve only just registered, although I’ve been lurking a while. I’m not sure where this question should go – can you redirect it appropriately please. Its rather long and has several questions but I can’t work out how to ask them without telling this amount of detail.
How do we find out enough information about unauthorised alterations to a particular owners lot?
One of the townhouses in our complex has just been sold. Owners of other townhouses have suspected that unauthorised alterations were made, and this has been confirmed by photos in the real estate advertisements and some concerned owners of other lots who viewed the house when it was open for inspection for the sale. However, from what can be seen in the photos and a short inspection we can’t determine what has exactly been done to achieve the alterations.
I have read on posts on this forum that once a lot changes hands the Owners Committee will become responsible for the maintenance and repair of those alterations unless OC approval of them was gained and stated otherwise. I assume the “sold” sign outside the house means that the settlement period has begun, rather than the sale completed, so I don’t know if we still have time to do anything about the issues.
Although the owner concerned should have had approval of some form from the OC for them, Some of the alterations probably pose little risk of expensive problems that the OC will need to pay for in future, and hence probably not panic-worthy. They may have only needed approval under no 5 of the bylaws or 65A (?is that the right one?) which I understand would leave the OC responsible for them anyway (is that right?)
However there are two alterations that probably are of concern and are likely to have involved a Special by law under 65A – but we can’t tell exactly what has been done.
One is a shower added to a laundry – it seems to use the taps that used to serve the laundry sink, and the floor drain in the laundry floor (the shower is elevated, so there is now no floor drainage outside the shower). Although not a brilliant idea to have no floor drainage or laundry sink anymore, it is possible that all they have done wrong is install a shower against at least one common wall, as they seem to use existing plumbing outlets inside the cubic space of the owners lot. But we don’t know that for sure. (I have checked and our local council don’t need to approve it unless major structural changes occur)
The other is a stove ventilation hood, which SEEMS to just lead into the cavity wall behind, as there is no outlet in the external wall or roof above. This is also against a common wall so if installed correctly they should have gotten approval for using the wall. But it may not be vented at all, in which case it is just a section 5 of the bylaws problem because they mounted it on the wall. If it just vents into the wall there seem to be a number of potential problems that could occur down the track.
To add to the issue, the Strata Plan seems a bit confused about what are common walls inside our houses, and I am awaiting a reply from the lpi after I needed to send further information, cross sections and plans to help them interpret the SP. (The walls I refer to above are definitely common walls, but there may be more)
So my questions are:
Is it too late for the OC or EC to do anything anyway?
Can we use the advertisements and short inspections as evidence of alterations to act if we can’t be sure of how they were done? Our SM seems unsure whether we should be concerned and asks us for evidence that bylaws have been breached before she wants to act.
A lot of the owners would like to install showers in their laundries (all the townhouses are identical, or mirror copies) and this issue is potentially setting a precedent for avoiding Special ByLaws.
Thanks.
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If the unit has been open for inspection, you have as much right to see what’s going on there as anyone else and report back accordingly.
Meanwhile your strata manager is being unnecessarily overcautious. The EC should ask them to send a letter to the vendor’s estate agent and to their solicitor and conveyancer, with a copy added to the scheme’s records, that they believe there have been unauthorised renovations and additions to common property (without specifying what they are) and that if this proves to be the case, they should either be removed or responsibility for them will pass to the new owner.
If the vendor objects, then you should ask if you can have a site inspection to verify that there have been no unauthorised renovations after which you will withdraw the letter immediately.
Your strata manager needs to be more proactive – if she’s not prepared to do this, your next task should be to find someone who is prepared to do their job. her lack of action will cost your owners corp in the long run.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
whoops ……. I’ve just posted concurrently with Jimmy T, but at least we’re on the same page!
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Your Strata Manager is probably being cautious, just in case the unapproved alterations to the Lot don’t involve the Common Property of the Plan, but she needs to understand that it’s the Owners Corporation who’s responsible for whatever actions may be taken to make prospective purchasers and those acting for them aware of the situation, and for the consequences of not doing that.
At some stage between the exchange of Contracts and Settlement (typically 6 weeks) the Solicitor / Conveyancer acting for the parties will apply to the Owners Corporation (O/C) for a Sect 109 Certificate, where details applicable to the townhouse such as the Owner as shown on the Strata Roll, Levies, etc need to be completed – usually by the Strata Manager on behalf of the O/C.
The last Item on the Certificate is “other items”, and that’s where I always include, in circumstances such as with your Plan, a statement that “the Owners Corporation has NO RECORD of a Consent ever being granted to any Owner of the Lot for the purposes of adding to, altering, or erecting any new structure on the Common Property areas within the Lot or elsewhere on the Plan under the provisions of Sect 65(A) of the NSW Strata Schemes Management Act (1996), including but not limited to (add any areas of suspected non-compliance such as to the laundry and kitchen areas of the Lot).”
Any accompanying note, such as an e-mail, to the recipient of the Certificate should make reference to the information provided there under “other items”.
In that way the interests of your O/C, and those of any new Owners are suitably protected by virtue of the fact that a monetary adjustment can be made at Settlement to account for the costs of the new Owner either restoring the Common Property to its pre-renovation state or for seeking and obtaining the O/C’s retrospective (and perhaps conditional) Consent to those.
@Whale said:
In that way the interests of your O/C, and those of any new Owners are suitably protected by virtue of the fact that a monetary adjustment can be made at Settlement to account for the costs of the new Owner either restoring the Common Property to its pre-renovation state or for seeking and obtaining the O/C’s retrospective (and perhaps conditional) Consent to those.I don’t think it will be as straightforward as that.
In any case, I think it’s arguable whether the “new owner” would be obliged to restore the common property to its former condition when works had been done to the common property by the precedessor in title which were not authorised in accordance with the by-laws.
I could quote cases, but it seems these tend to be too overwhelming for most here, so I will simply say that by-laws generally prohibit damage being done to the common property by an owner of occupier. In this case, assuming this to be so, any “damage” to the common property would’ve been done by the (soon to be) precedessor in title and that person (or those persons) would’ve committed a breach of the by-law. Then, the new owner would not have committed a breach of any by-law and thus may not actually be liable to make good the damage done by the precedessor in title.
I will also say that there is at least one owners corporation (probably in recongising that the above principles are probably true) sought orders in the Supreme Court restraining the sale going ahead until breaches to the by-law were made good. This (expensive) option may be worth pursuing …
bluehouse – whilst awaiting a possible response from mini , let me clarify that I thought your main issue was that your Owners Corporation (O/C) was aware of, or at least suspected, that an Owner had made fairly substantial renovations to their Lot, and that as the Lot was on the market and a deposit may have been taken, you were concerned that your O/C may be held responsible for the maintenance and repair of any common areas involved in those renovations by a new Owner.
If that’s correct, then we’re not talking about a Breach of the Model By-Law that prohibits activities such as driving a nail into a common wall, and even if that was applicable, how could your O/C defend the fact that it has never issued the Lot Owner with a Notice to Comply, which after all states only that a breach is believed to have been committed, so it could have afforded the current Owner an opportunity to respond, if only to refute that belief?
It was for those reasons that I suggested that your O/C approach the issue from the angle that the current Owner may have breached S65A of the Act by adding to and/or changing and/or erecting a new structure on common property areas within their Lot, and that a note to that effect on a document such as the S109 Certificate would be an appropriate means to make the parties (the vendor and the purchaser) aware of the suspected situation, and to let them resolve it together with their legal representatives and to the satisfaction of the O/C prior to settlement.
So rather than a new Owner not being obliged to restore the common property areas of their Lot to its former condition because works had been done to those areas by the “predecessor in title”, I would contend that the approach that I’ve suggested would in fact prevent a new Owner from denying prior knowledge of the works, and to either do the restoration with funds allowed from the Vendor at Settlement, or to beforehand seek the O/C’s retrospective authorisation to those past renovations, subject to conditions perhaps including one making that new Owner responsible for the maintenance and repair of those.
As with some other suggestions I make here, this is one that’s worked for our Strata Plan in all but one instance where the new Owner accepted the funds allowed from the previous Owner to make agreed changes, in that instance to take-up a floating floor, and then didn’t. Fortunately for our O/C, the then CTTT’s chocolate-wheel of possible decisions ruled in our favour albeit with the assistance of a relevant Special By-Law, which by the way is one of the reasons that, as opposed to being overwhelmed by it, I try so hard to avoid the NCAT and the real Court System; so be careful what you wish for!
One way around this issue of responsibility passing to the OC when a lot is sold in NSW would be to accept that the alteration is now the OC responsibility but when the new owner asks for it to be maintained because it’s common property is to tell the new owner that we won’t maintain it but we will remove it (at OC cost reluctantly). This would work for a/c installs and other additions to the lot because the owner is claiming it’s common property and so the OC have every right to remove it and restore the area to it’s original condition.
How many new owners who thought they could have unlimited maintenance on their unapproved additions only to discover that the only option that the OC will consider is removal.
Good point KWP – it’s one you often make as a good fall-back position in some situations!
bluehouse – I don’t envy you, but perhaps be comforted by the fact you’re not on your own with this problem or more generally with trying to extract a decision from an Executive Committee (E/C).
Mini may yet find some relevant legal precedents, and I agree that those may motivate your E/C, as may the fact that once advised of a problem such as this each may be held personally liable for any adverse repercussions to the O/C and/or the new Owner arising from their inaction, the O/C’s Insurance coverage for “office bearers legal liability” won’t protect them, and furthermore they can’t use the Strata Manager’s (SM) lack of advice or cautious approach as a defense, because the SM works for and takes instruction from them as the O/C’s representatives.
That’s it from me on this one; good luck!
Apologies for the late reply. But I find that this forum is not very user friendly. It actually took me 10 minutes to find this thread to see if there were any replies to it … Anyway …
I assume the op is in NSW.
If so, some Tribunal and court decisions have held that section 62 of the Strata Schemes Management Act 1996 obliges an owners corporation to maintain and repair an addition to the common property even though it was unauthorised. So the op is quite correct, following those decisions, that the owners corporation would be prima facie under a duty to maintain and repair those unauthorised additions to the common property in accordance with its statutory duty to keep the common property in a state of good and serviceable repair.
An adjudicator can order that a lot owner who has made unauthorised changes to the common property (in contravention of s 65A or the by-laws) to restore the common property to its former condition. However, if the owner does not comply with the order the only thing that can be done at NCAT level is that owner being fined (and under the present law most Tribunal decisions have held that only one penalty application per breach can be maintained due to the wording of the Strata Schemes Management Act).
If the owner still doesn’t comply after the penalty application, then it is at least arguable whether an owners corporation would be able to obtain orders for access into the owner’s lot to carry out that rectification work to the common property at cost of that recalcitrant owner. This is due to the owners corporation only being allowed to enter the lot for specific purposes under the legislation (which seems to envisage a legislative intent of preserving fundemental freehold rights of a lot owner i.e. the ability to exclude others). There is another aspect of the legislation which does not seem to have been tested by many with respect to an owners corporation gaining access to a lot to restore common property to its former condition, but that is another story. The point is, that seeking adjudicator’s orders can be very time consuming, rack up legal costs and get no where in resolution of the actual dispute…
I think this is where the “toothless tiger” of NCAT (formally CTTT) derives from. So the op is quite correct in remarking that statements such as “we can make him take it out!” can be considered to be inept.
In any case, as to Whales’ post, even if a lot owner was “on notice” of unauthorised works to the common property by its predecessor in title, they still technically haven’t committed a breached of s 65A. That breach was by the previous owner, and it is arguable whether an application for adjudicator’s orders could be made against that the previous owner for restoration of common property.
And, I am not aware of any “simple online resources” to explain this … it is quite technical and the owners corporation would be advised to promptly seek legal advice in relation to the matter.
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