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Topic
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Waterboy writes:
Recently a relative had water damage to floor boards and had to meet the repair cost.
The water damage was from the buildings water pipe in the common property which run up the building in a shaft in the public hallways. The leak had occurred one floor above. To be clear the leak did not arise from any apartments but from common property.
The Executive Committee denied responsibility. When asked to check the Owners corporation insurance policy they responded there was no cover. As my relative had no contents insurance he had to meet the cost of new floor boards and installation. Of note the Body Corporate attempted to argue that the floor boards were not approved but this proved tongue in cheek when written approval was produced.
Your opinion on the legal position would be appreciated.
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Replies
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Your relative needs to get a grip of their Owners Corp pronto.
Firstly, – and more importantly – the owners corp is breaking the law by not having insurance.
Secondly, damage cause by a failure of common property can be charged back to the Owners Corp. Your friend should threaten to take them to Fair Trading and NCAT if they don’t get insurance coverage and pay for the damaged floorboards.
What will NCAT do? I would think the statutory appointment of a strata manager will be a no-brainer … and then they’ll find out how bad things really are.
Oh, and anyone who doesn’t have home contents insurance is tempting fate just a little too much.
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.
Jimmy I am in a similar situation although my OC has insurance. I suffered ceiling damage due to a leaking roof in my strata townhouse and the OC arranged a roofing guy to take a look. He came 4 days after I reported the leak but gave no set date to fix it. My ceiling damage gets worse with each major storm and I am told the OC would pay to fix the roof, and ceiling but not to remain the ceiling and not for other damage (my built in wardrobe has warped a bit from the water). My contents Insurance will not cover painting the ceiling. Is the OC responsible to recompense me for painting and wardrobe repairs when the damage to the paintwork is directly due to the leak?
@Derek said:
I suffered ceiling damage due to a leaking roof in my strata townhouse … is the OC responsible to recompense me for painting and wardrobe repairs when the damage to the paintwork is directly due to the leak?In a word yes. You should put in a claim, with quotes for painting and repairs, immediately and tell the Executive Committee or strata manager that if it isn’t fixed within seven days you will take them to Fair Trading and NCAT (the Tribunal) to have orders imposed. The easiest and cheapest way for the OC to remedy this is to get the work done – that’s what will happen in the end anyway so they may as well get on with it.
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.
Derek,
Jimmy said……The easiest and cheapest way for the OC to remedy this is to get the work done – that’s what will happen in the end anyway
Whilst I agree absolutely with that premise so far as what should happen in terms of fairness, all that must happen is that the Owners Corporation (O/C) repairs its common property, and your case that’s the roof and ceiling of your townhouse, and of course anything else that may be damaged in the process of it making those repairs.
Painting of the ceiling and the repairing of the wardrobe are matters which the O/C may attend to at its discretion, and whilst I again agree that should happen given the delays in repairs and the further damage arising from those, it doesn’t have to.
So by all means get those quotes Derek, but in my opinion a demand for your O/C to repair anything other than its common property will be a bit of a try-on, so it’s worth considering that as a fall-back position the Insurer of your contents may cover anything that your O/C and/or its Building Insurance will not repair, provided it’s supplied with written evidence of that refusal.
Doesn’t it depend on if the OC was responsible for the leak?
The OC might be responsible if the leak happened due to a lack of maintenance of or a building defect in the common property. Then any subsequent damage caused by the leak to a lot would be the OC’s responsibility to repair.
But if the OC was not responsible for the leak (eg it was caused by storm damage) then any subsequent lot damage caused by the leak would be the lot owner’s responsibility to insure and repair.
Is the above incorrect?
Austman – I don’t know about what occurs in Victoria, but in NSW Owners Corporations (O/C) have an absolute responsibility to maintain and repair their common property and any damage that they may cause in the process of undertaking a repair, and whilst I’ve tried to avoid the complications around insurance, the O/C’s compulsory insurance would cover those repairs if they arose from a “defined event” such as a storm, but not so if they arose from a lack of maintenance or by gradual deterioration (e.g of roof tiles).
So far as I’m aware, in neither instance is an O/C obliged to repair any consequential damage such as that to a Lot’s contents, that is, whether that be from a lack of proper maintenance on or from a defined event involving its common property.
It’s worth noting that a refusal of an insurance claim by an O/C’s insurer does not negate that O/C’s absolute responsibility to still repair any common property that may have been the subject of that claim, however as I observed before, the Lot Owner’s insurer (of contents) will usually cover consequent damage to that Lot in circumstances where the O/C’s insurer and/or the O/C itself will not do so and states that in writing.
Thanks Whale. I was asking the question generally, not specially for Victoria. It’s a important issue that seems to come up quite a lot.
While there can be differences in insurance polices between the states, they seem essentially to be the same. The one we use (a specialist strata insurance company) has the same PDS for all of Australia. It has an Optional Benefit for NSW to cover Lot/Unit wall coverings.
We have had common property building defects that allowed water leaks to damage lot property. Insurance would not cover the cost to repair the defect but it did cover the damage caused to the lots (including lot repainting). I believe it was covered because the OC was liable to pay for this damage and had a “liability to others” cover in the policy.
Michael Teys (strata lawyer) discusses this on his blog “Lots Damaged By Events on Common Property”: https://wiki.blockstrata.com.au/2014/09/lots-damaged-by-events-on-common-property/
Michael says “If the owners corporation is liable, then it doesn’t matter if the owners corporation insurance policy covers the lot owner’s damage or not”.
Thanks Whale, what you have said seems to echo what my OC’s strata manager told me. That they will fix the ceiling but not paint it or fix any other damage, unless it is, as you said, damaged during fixing of the roof. Unfortunately the fact it has got worse due to delays in fixing it and further rain seems irrelevant. Kind of a screwy rule since the only reason it needs repainting (it was painted a year ago) is because it needs repairing because of the leaking roof.
My contents insurer have told me they definitely won’t cover painting it as it is not a fixture but part of the structure. So I guess this is a watershed liability for the owner under strata law.
Derek – you may have to cop it on the chin, but still submit the claim to your Executive Committee Secretary (cc Strata Manager) as Jimmy suggested – it’s paperwork that you’ll need anyway and is definitely worth a “try-on”, particularly as your Owners Corporation’s past inaction has exacerbated your situation and it may yet buckle at the prospect of you taking it to the NSW Civil and Administrative Tribunal (NCAT).
Their seems to be confusion here regarding the Strata insurance because the Strata insurance covers both common property AND lot property. It covers basically the same as a Home Insurance policy does on a freehold property (plus other items).
My opinion is that the Strata are responsible for all the repairs to the roof and the damage done to the lot property (maybe with the exception of any contents) including the built in wardrobes (fixtures and fitting), repainting the ceiling.
Most of this will be covered by the strata insurance but what is not is up to the OC to pay for.
Also with regards Waterboy the floorboards are def part of the structure and so are covered by the Strata insurance but as their is no strata insurance the OC are liable for the full cost.
I agree with KP but there is an anomaly in the “Who’s responsible for what …?” guide which clearly suggests that while damage done in effecting a repair to common property has to be made good by the owners corp, the damage done in the first place by the failure of the common property is not the OC’s responsibility.
It is my firm belief that this would not stand up in any court or tribunal in Australia and what KP says is correct. The problem is convincing your strata manager of this when there is an otherwise authoritative document that contradicts this view.
This is what the relevant note in the above document says:
If damage is caused to a lot owner’s property while the owners corporation are effecting a repair, the owners corporation are responsible to fix the damaged property. However, if the cause of the damage to the owner’s property was not made when the owners corporation were fixing the problem; instead it was caused by the problem itself, then the owners corporation are not responsible to make good the owner’s property unless the owners corporation can be deemed negligent. E.g.:
1. A burst pipe occurs in a wall and the owners corporation have to knock a hole in the wall to fix it. The owners corporation are responsible to fix the hole and repaint the wall afterwards.
2. A burst pipe occurs in a concrete slab. The owner’s corporation fix the leak, but water stained the ceiling paintwork of the unit below. Here the owners corporation are not responsible to repaint the ceiling because it was not the fixing of the repair that caused the damage.
3. A burst hot water service soaked the magnasite in a unit and the owners corporation had to take up the carpet to dry the magnasite. Once the magnasite had dried, the carpet could not be re-laid because it had shrunk. The owners corporation would be responsible for the carpet because the
carpet was damaged because they had to take it up.
4. With example 3, if the magnasite was not damaged, the owners corporation would not be responsible to dry out the carpet or replace it, if it shrunk because the damage to the carpet was not caused when the owners corporation were fixing common property.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 would think that if the roof leaked due to storm damage, it is an insurable event, and the structure of the building should be repaired by the OC covered by the insurance. If there is a problem with the insurance, the OC should ensure the damage is fixed promptly in any case. Everything the OC is responsible for should be fixed, but that might not include the paint in the unit. If, the roof damage were not fixed promptly and then further damage to private property occurred due to what by now is a known, unrepaired defect of the common property, then the OC would have to fix the private property that was damaged.
Thanks all for your great input, I really appreciate it. Unfortunately with Xmas so near it is virtually impossible to get a tradie to quote on any job, but it is reassuring to read that if there is further damage due to the leak not being fixed (now 12 days on) – then I should be able to hold the OC responsible!v
I think it’s agreed that this is about liability.
If the OC is liable for the damage caused (including to any lot), the OC has to pay for the repairs. The OC’s insurance will hopefully cover the OC’s costs. But if it doesn’t, the OC is still liable.
So the question to ask the OC is “Why isn’t the OC liable for the damage?”. And if the OC’s answer is “It’s because the OC’s insurance policy will not pay for it”, that’s the wrong answer. If the OC’s answer is “It’s because the OC was not negligent”, that’s a different matter.
I’ve had a closer look at one of our claims that our insurance company paid. A building defect allowed water to damage both common and lot property (including lot paint). The insurance didn’t cover the defect repair but it did cover the damage it caused, at least to common property, as this was not a “lack of maintenance” issue. The water damaged a lot’s ceiling plaster – which is common property. It wasn’t possible to repair the lot ceiling plaster without then needing the whole lot ceiling to be repainted – the paint being lot property. It was therefore probably an example of a common property repair (the lot ceiling) necessitating the repair of the lot property (the paint).
I must admit I don’t understand the reasoning behind the qualifier in the act
Part 4 Insurance
81 Building
In this Part, building includes:
(a) owners’ improvements and owners’ fixtures forming part of the building other than paint, wallpaper and temporary wall, floor and ceiling coverings, andas this only applies to NSW. But the act goes on to say
82 Damage policy
(3) A damage policy is to provide for the repair of damage to, or the restoration of the damaged portion of, the building in the event of its being damaged but not destroyed, so that the repaired or restored portion, is in a condition no worse or no less extensive than that portion or its condition when that portion was new.
So unless the original room wasn’t painted the Strata are obliged to repaint to restore it to it’s original condition but the insurance won’t pay for the repaint it’s just ridiculous.
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