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An owner in our strata plan has had water inundate part of their lot from common property. A room had to be emptied of its contents and stored and the room was gutted as part of the forensic investigation. Water has continued to enter that lot for 5 years while the causes were identified and a home owner's warranty claim has been pursued. Remedial works are in progress but not yet completed. The lot owner has lodged a claim with the owner's corporation for the storage costs incurred.
The executive committee doesn't want to pay those costs unless the home owner's warranty insurer firstly accepts the claim. The lot owner says the owner's corporation is liable for those costs regardless of whether an insurer ultimately covers the cost.
Who is correct?
How might the parties progress from this point forward?
Mark H
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The OC is liable in the first instance because of its legal duty to maintain and repair common property (even though they are doing their best to effect this). They then need to claim against the insurer. Look at it this way, if the insurer refuses to pay, the OC still has to stump up so they may as well pay now and claim later. Better to keep relations on a cordial footing and do the right thing rather than find excuses so they don't have to dip into their funds. And don't forget, oit's the home owner who's really suffering.
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.
Can only agree with Jimmy T.
Our place has lots of water leakage (and other) problems and insufficient funds to fix them – caused by years of neglect. I live in fear that someone will demand a similar payment before we can fix everything.
Only a couple of days ago my spouse threatened to 'sue the strata' if the leak affecting our balcony isn't fixed soon (we've already had our carpet replaced several years ago, after being inundated by a serious leak in another unit that affected most units on our floor). I had to point out that we've got engineering reports and are well on our way to repairing all the leaks, not just ours, hopefully in the new year.
Gilgal1 said:
Can only agree with Jimmy T.
Our place has lots of water leakage (and other) problems and insufficient funds to fix them – caused by years of neglect. I live in fear that someone will demand a similar payment before we can fix everything.
Only a couple of days ago my spouse threatened to ‘sue the strata’ if the leak affecting our balcony isn’t fixed soon (we’ve already had our carpet replaced several years ago, after being inundated by a serious leak in another unit that affected most units on our floor). I had to point out that we’ve got engineering reports and are well on our way to repairing all the leaks, not just ours, hopefully in the new year.
Thank you Gilgal, a lesson for me in all this is that owner’s don’t do themselves or the OC any advantage by waiting till things can be afforded or take their course. We have worked diligently with our HOW claim and the insurer has taken their time and resisted us on many turns (ultimately agreeing). In hindsight I think the OC should have raised the funds (Around $2M) and completed the repairs while pursuing the insurance claim to the fullest. A hard call but the disruption to everyone and the heartache over all these years is terrrible. Some owners have passed away waiting for the “dream” to be realised!
Aquarian said:
If I can't get the OC to understand its responsibilities I will have to take legal action which unfortunately for all concerned will make it a much bigger matter.
Let's make it easy for them. You explain that they are in breach of their legal duty under strata law. Also, by ignoring legal advice, they are now straying into an area of culpable negligence (or whatever the legal term is) which means that they may not only be liable as an EC (which is probably insured) but as individuals (which probably isn't).
Your options are to pursue this through Fair Trading and the CTTT at the end of which – having spent a bit of money defending the case – they will be ordered to undertake the repairs.
Or you could sue them to undertake the repairs and damages for distress and all costs throught the Supreme Court (which WILL consider the case if they believe damages may be appropriate) and they will still have to fix it.
There are plenty of precedents for OCs being told to get on with repairs regardless of the fact that insurers are dragging their heels. So that's their choices: The hard way (via the CTTT) or the really hard way (via the Supreme Court including claims for negligence) or the easy way.
The easy way is this:
The OC employs building consultants to arrange for three quotes for all the repairs required. The EC then chooses the best quote and raises the finance through someone like Lannock (who are sponsors of this website) or Strata Finance (who aren't) and get on with the work. Then when the insurers quibble about the costs etc, the OC can say we got independent assessments, this is what it cost us, now give us the money (including the costs of the consultants and the loans).
If I were you I'd get a lawyer to prepare a letter outlining those options (and anything else they can think of) and giving the EC 28 days to arrange a general meeting so you can get moving on this. I'm sure other affected owners will chip in for the cost of that.
Failure to do so would trigger whichever course of action you prefer. They don't get to choose what they are liable for and what they aren't – it's clearly stated under the law. And now that they have ignored legal advice that they ARE responsible, they have really stepped in the poo.
Maybe the easiest thing to do is print this correspondence out and hand it to them.
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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