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An owner within our building has built a bathroom inside the unit and a cellar under the unit without OC approval.This was only discovered when she was selling her unit. The new owner understandably says that has nothing to do with him. Is this now the OC’s responsibility to obtain council approval and sign off. we are particularly concerned with the structural beam that have been inserted to hold up the floor over the cellar, the underpinning of some of the footings where she had lowered the level and the plumbing in the new bathroom.
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Technically, yes, the owners corp is responsible for the alterations – but that also means that theoretically you can remove them.
The new owner can say it has nothing to do with her – and you can say well, make it something to do with you or we will reinstate common property to its original condition.
In an ideal world, with your support, she could pursue the vendor for not fully disclosing the situation with the changes.
But what you really want is to get this all shifted to her responsibility so that the Owners Corp isn’t constantly being asked to pay for fixing work that should never have been done.
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.
Similar answer to JT.
Caveat emptor = buyer beware. The buyer has ‘inherited’ the problems of the previous owner when they purchased the Lot. The responsibility lies with the new owner to obtain the correct approvals. The responsibility does not lie with the OC.
Due diligence inspections by the new owner of the strata records should have revealed that no approval had been given by the OC for the renovations.
In my opinion your OC should write a letter to the new owner stating that: the previous owner’s renovations have not been approved; and that the previous owner has breached certain conditions in the Act and the by-laws; and that the OC, as a last resort, can seek an Order from NCAT that the cellar is removed at the owner’s expense.
If the new owner wants to prevent the OC from seeking such an Order then the new owner, at the very least, should be asked to obtain a structural engineer’s report certifying that the structural changes are compliant.
Your OC can approve all of these renovations retrospectively after the new owner has submitted all of the correct Motions relating to the renovations, including an indemnity.
Give the new owner a deadline for the structural engineer’s report and the Motions e.g. 30 days.
I can’t understand how the owners in the building were not alerted when this major work was being undertaken.
The OC needs to contact the Council – I think they would be very interested in the illegal works.
art said
Is this now the OC’s responsibility to obtain council approval and sign off.Yes if it’s common property alterations, because, in the absence of a specific by-law, the OC owns and maintains all common property.
@Lady Penelope said:
Similar answer to JT.Caveat emptor = buyer beware. The buyer has ‘inherited’ the problems of the previous owner when they purchased the Lot. The responsibility lies with the new owner to obtain the correct approvals. The responsibility does not lie with the OC.
I think that only applies to lot property. Without a by-law, the new lot owner is not responsible for any common property alterations that they didn’t do. They only purchased a share in the common property.
scotlandx said
The OC needs to contact the Council – I think they would be very interested in the illegal works.In a similar situation, when my council found out about unapproved and non-compliant common property alterations, my OC was threatened with legal action by the council (a large fine). We had to bring the works into compliance. The lot owner wanted to keep the alterations, so agreed to paid for that.
I agree too that the OC can choose to inherit or remove the common property alterations or negotiate with the new lot owner about their compliance and on-going maintenance costs.
The OC should be seeking legal advice about this issue. This issue becomes even more complicated if the previous owner misrepresented information about the addition prior to the completion of the sale etc. Was the new cellar created out of common property? This is not clear. Was the common property slab interfered with?
In my opinion an OC should not be ultimately responsible for an illegal addition. The OC may initially be made responsible by the Council but then the OC can shift the responsibility onto the current owner who has inherited the defects and mistakes of the previous owner.
If the OC was to be made responsible for every illegal addition then there would be many more owners doing it.
@Lady Penelope said:
In my opinion an OC should not be ultimately responsible for an illegal addition. The OC may initially be made responsible by the Council but then the OC can shift the responsibility onto the current owner who has inherited the defects and mistakes of the previous owner.
Our council was crystal clear: the current owner (the OC) fixes it or gets fined. We got that in writing.
The OC could of course pursue the previous lot owner. But that might be legal action outside the OC Act.
Lady Penelope said
The OC should be seeking legal advice about this issue.I agree. We did that. There were several lawyers involved in the end.
@Lady Penelope said:
If the OC was to be made responsible for every illegal addition then there would be many more owners doing it.
Not when the owner that made the alteration is still the owner. The OC Act then still applies. I think that’s a key difference.
Under the same provisions of NSW strata law that mean the Owner Corporation is, by default, responsible for changes by an owner to common property under a special resolution by-law (albeit with the clear intention that the owner should be required to take responsibility under the by-law) OCs are responsible for changes to common property that were not permitted by a special resolution by-law (e.g. changes to common property that were not totified to the strata committee or allowed on a nod and a wink). See S.108(4) below.
The thinking behind this is that someone has to be responsible or a building could literally be falling down while previous and current owners chased each other around the courts.
However, that doesn’t need to rest there. The owners corp can demand that the current owner takes responsibility or reinstates the common property. The current owner can (theoretically) pursue the previous owner for failure to inform them that there were unapproved works.
And then there’s the local council who may well demand that an illegal structure be removed. Who will they demand that from? Probably the Owners Corp in the first instance … and so the carousel starts spinning again as the OC pursues the owners through NCAT.
SSMA 2015 Section 108
(4) If a special resolution under this section does not specify who has the ongoing maintenance of the common property concerned, the owners corporation has the responsibility for the ongoing maintenance.
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.
JT and Austman – My point is that there has never been a Special Resolution moved and approved regarding this renovation, therefore, the OC responsibility under [s108] would not apply.
I agree that the Council will chase the OC first as they are the easiest to get money out of, and to get results from. However, the issue should not rest there.
If the OC is required by Council undertake work and to pay for anything regarding this issue then the OC should then chase the current Owner for any monies that the OC has expended in sorting this matter out. This is permitted under [s120] – Owners corporation may carry out work required to be carried out by others. The power to enter is contained within [s122(1)(b)].
If the current owner refuses to pay then the matter should go to the Tribunal. The power is contained within [s132]. The OC should not be chasing the previous owner.
If the current owner ends up having to foot the bill then they can chase the previous owner if they wish to do so, although in my opinion, it is the current owner who will end up wearing the cost.
Whenever a unit is purchased there should be due diligence investigations of the strata records pertaining to the purchased Lot. Red flags should have been raised when the purchaser saw that renovations had been done on the unit and yet there were no records of their approval. Did the current owner even conduct a search of the strata records? Many people don’t do this.
This issue has the potential to cost the OC a whole heap of money so don’t capitulate. In my opinion, just because the OC may have the capacity to bear the full cost of fixing this mess doesn’t mean that it should.
@Lady Penelope said:
JT and Austman – My point is that there has never been a Special Resolution moved and approved regarding this renovation, therefore, the OC responsibility under [s108] would not apply.Well, you would think that but I am told that is not the case. The basic pricipal is that someone has to be responsible for common property and in the absence of a special resolution, that must fall to the OC. This is one of the reasons that Owners Corps allowing owners to change common property on a nod and a wink are playing with fire.
Many years ago I wrote about a block where one owner had replaced his balcony sliding doors with bi-fold French windows, then sold, without informing the OC (who could not have known this was happening unless they had rowed out into the sea at Bondi).
The doors eventually failed and the new owner felt that the OC should pay for the repairs. The legal advice given at the time was that, in the absence of a formal agreement to the contrary, the OC must assume responsibility for common property.
I believe a compromise was reached when the OC “offered” to reinstate the sliding doors rather than repair the new ones. At any rate, it never went to court.
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.
I found this recent (August 2017) paper on the topic from the law firm JS Mueller & Co:
UNAUTHORISED WORKS: WHO IS RESPONSIBLE FOR REPAIRING THEM?
It does have a somewhat different view.
That makes really interesting reading and it has changed my view entirely on how I would approach this issue (although the end result might be the same).
I know Adrian Mueller so I would not doubt the validity of this view for a second.
My only question is the same as the one at the top of the paper; Have we been doing the wrong thing? And why?
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.
Long time, no contribution.
Yes, in my opinion this site has been giving wrong advice on the matter of unauthorised additions to common property for a long time.
Particularly the notion that an unauthorised addition to common property automatically becomes common property when lot ownership changes.
And the “why” is quite simple.
There is only one way under the SSMA 2015 that an addition to common property can be made … by special resolution under s.108(2).
If the OC has not made that resolution, the addition (or extension) is not common property.
Lady Penelope got it right.
Adrian Mueller got it right.
I too have had dealings with him and hold high regard for his opinions.
My advice is … Keep all minutes of general meetings from day dot, don’t allow them to be destroyed after the regulation period … that way you will have proof that no special resolution was made.
@Kangaroo said:
Long time, no contribution. Yes, in my opinion this site has been giving wrong advice on the matter of unauthorised additions to common property for a long time.And yet, this is the first time you have deigned to give us the benefit of your wisdom.
The heading on the Adrian Mueller document is: ARE WE GETTING IT WRONG? and it was issued this month, so this is a fresh take on the issue.
Who is the “we”? Perhaps it’s every other lawyer and strata manager I have spoken to up till now.
If only you had let us know sooner!
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.
An very early statement said the unauthorised work was discovered when the unit was on the market, i.e. BEFORE settlement… Why did the EC/OC not take action immediately?
IF the unauthorised work is a basement… but maybe also a bathroom, WHY was
the local council not involved immediately- to issue a stop notice ? What about the plumbing/Public Health implications, etc.?
SSMA 1996 had a section which could make vendor and purchaser jointly liable, i.e. for unpaid levies, etc. The new SSMA states it incorporates much of the former strata act… Worth a look… Why should the corrupt vendor escape scot-free?
It would be interesting to find out if the workmen who carried out the illegal works were properly licensed, etc.?
SSMA 2015 allows for a claim for damages…
I would reiterate my previous point – how did no one notice tonnes of dirt being carted out? Or were they like the POWs in the Great Escape, trickling it down the legs of their pants as they walked through the yard?
This is what happens when strata owners “don’t want to get involved.” You are involved, whether you like it or not.
And, one way or another , you end up paying for the problem to which you turned a blind eye.
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.
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