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Who picks up the bill when a two flats are flooded by a defective dishwasher and neither party is insured?
The question was raised by Flatchatter “Powers That Be”, a strata committee member in a block where a tenant’s dishwasher malfunctioned, flooding the unit and damaging the flat below.
The damage downstairs will cost about $4000 to rectify but the owner of the dish washer unit is denying all responsibility.
“The owner of the dishwasher acknowledges the cause of the damage to the unit below is from their flooding dishwasher,” says Powers. “But their response is ‘ it is not our problem, let them claim on their own insurance.’
“How do we make them live up to their responsibility to make good the damage they caused? It now looks like the Owners Corp will be left to pay for the work to be done.”
OK, hold it right there. Unless a by-law has been breached, or owners corp property was damaged or it was owners corp equipment that failed, the strata committee has no skin in this dispute.
The downstairs owner had no home and contents insurance (really?) and the upstairs owner had no landlord insurance (really dumb!), otherwise this would probably have been covered.
However, it is not covered by strata insurance, which has very little to do with individual units.
The upstairs owner is liable, whether or not they are insured. It may be that their tenant was at fault, or it was a faulty or badly installed dishwasher. Either way, they are responsible for damage caused by the failure of their domestic equipment.
This certainly has very little to do with the Owners Corp. It didn’t cause the problem and the building hasn’t suffered because of it so the committee should be very wary before getting involved.
The downstairs owner should talk to a lawyer about possible action, including getting an estimate for the repairs and sending it to the landlord with the threat of legal action to recover the amount, plus legal costs, at a small claims court.
The strata committee should limit their involvement to giving a statement about the events. They certainly shouldn’t be paying for the repairs or playing StrataKop in a dispute that has nothing to do with common property or by-laws.
You can read the whole saga HERE. There’s a handy guide to our small claims and other court systems HERE. And, as ever, the Strata Community Australia’s (NSW) version of the guide to who’s responsible for what in strata is a must (don’t forget to read the footnotes).
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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Very good article Jimmy.
I wonder about: “Either way, they are responsible for damage caused by the failure of their domestic equipment.”
As for dishwashers – I can report mine did flood once (well twice actually). It turned out to be a fault with the main pump. The manufacturer’s authorised repair person stated there was nothing I could have done to prevent it – it was just plain bad luck that it failed after less than 4 years. Unfortunately when installing the new pump, the authorised repairer didn’t attach a hose to the pump (inside the machine) quite correctly. The result was that eventually the hose slipped off and the dishwasher flooded a second time.
Is it the case that I would have been personally held responsible for the flooding, even if I reasonably could have done nothing (both times) to prevent it?
I’m not meaning to disagree with you. I’d genuinely like to know what is the actual legal situation where incidents like these happen and the owner of equipment that failed didn’t seem to do anything wrong and could not have reasonably been expected to have prevented it. Would the absence of negligence or malicious intent together with a reasonable duty of care mean I might not be personally responsible for the flooding caused by the equipment failure?
Of course, if everyone is insured (as they should be), the insurance companies would work it all out.
Austman – the issue is not whether the owner of something that causes damage has done anything wrong. The question is who owns the thing that caused the damage. The owner is liable for that damage.
@scotlandx said:
Austman – the issue is not whether the owner of something that causes damage has done anything wrong. The question is who owns the thing that caused the damage. The owner is liable for that damage.But is that the law in Australia?
I’ve read published tribunal and court cases where, in the absence of negligence or malicious intent or a failure to exercise a reasonable duty of care, an owner of something that has caused damage has been deemed not to be liable for the damage it caused. Eg a clock radio in a rented home spontaneously caught fire which caused major damage – the court ruled the tenant not to be liable because there was no negligence.
And how about an OC owned pipe inside a wall that burst when it couldn’t have been predicted or prevented? Where the contents of a lot were subsequently damaged by water. I realise the OC must repair the pipe and the OC’s insurance might cover the damage caused. But is the OC actually liable for the damage caused to the lot contents? Or should the lot resident be claiming on their own contents insurance?
Does liability always fall to the owner? Maybe it does. It seems unclear to me.
The following was sent via email by a reader who was unable to negotiate the registration process of the website. I don’t agree with much of it but in the interests of fair play … – JT.
I have read with interest your expose of the insurance vagaries arising from the very common event of an escape of water in a Strata building causing damage to property. There are certain aspects of this matter which need to be exposed, emphasised and clarified in order that the outcome may be clarified for the assistance of all concerned.
In the second paragraph there is reference to a “tenant’s dishwasher” which means a dishwasher belonging to the tenant (of the upper flat). In the third paragraph there is a reference to the “owner of the dishwasher” which is obviously referring to the owner of the upper flat from which the water escaped. These two references are in direct contradiction of each other respectively so that one of the statements is in error. It would be possible for a tenant to be the owner of the dishwasher but for practical purposes it may be assumed that the dishwasher was owned by the owner of the upper flat.
The damaged property is not described other than to say that it “will cost about $4,000 to rectify”. The absence of a proper description is a serious omission by the informant which requires clarification. It could be speculated that carpeting belonging to the owner of the lower flat was damaged but reading the information supplied as a whole it is more likely that the primary damage was to (kitchen) cupboards in the lower flat. If the tenant suffered damage to his/her property then this would likely be to TVs and other electrical appliances which damage is not usually described as a lump sum “to rectify”.
It is apparent that the informant is under the impression that the owner of the dishwasher has a strict liability for any damage caused by water escaping from the dishwasher. The informant is seriously misguided in this regarded and should be disabused of this error. The crucial question is to ascertain whether the damage was caused by negligence (which is difficult to prove) and, if so, which party was negligent. The absence of any reference to this, especially as it is adequately covered on the Forum, is a serious omission.
Insurance. There is not any legal obligation for tenants or landlords to insure and anecdotal evidence suggests that most of them do not. The Strata legislation stipulates that that part of the building which is inside a Lot forms part of the building for insurance purposes. Furthermore, the Strata legislation requires that each such building be insured, in breach of which there are penalties, so that it may reasonably be assumed that the building, including that part of the building inside the Lot, was insured.
So, if clarification with the informant confirms that the subject damage was to the building and/or its fixtures, a claim should be lodged immediately on the building insurer. Problem solved. Having paid the claim the insurer will explore the prospects of recovery but this is unlikely to be successful. If the damage was to carpet or curtains or the like then each will be saddled with his/her own costs probably without prospect of recovery from any other source.
The article commences with an implication that only two parties were involved so it might be interesting to consider all the potential parties:
Body Corporate
Owner of the upper flat
Tenant of the upper flat
Owner of the lower flat
Tenant of the lower flat
Repairer of the dishwasher prior to water escape?
Installer of the dishwasher
Retailer from whom the dishwasher was purchased
Manufacturer/importer of the dishwasher
Insurer of each of the foregoing
Possibly, others
I don’t agree with Mailbox’s position.
Austman – a strata scheme is not a magic pudding. It is not there to pay for any damage that may occur, regardless of the cause or what has been damaged. Flipping the equation – on what basis should an OC pay for damage to someone’s property caused by someone else?
If you live in a house on a property and a tree on your property falls on your neighbour’s house and damages it, you will be liable for that damage. That is because it is your tree. Whether or not you knew the tree was unstable, or whether wild storms brought the tree down, it’s your tree wot done the damage.
I think I have mentioned before that people get quite hung up about negligence – negligence is an area of tort law. You may or may not be negligent, that is a separate issue. To that extent I believe the SCA document is misleading.
I am not familiar with the clock radio case but those circumstances, are distinguishable in a number of respects. The owner would be covered by insurance in a case like that and if they didn’t have insurance, they are idiots.
@scotlandx said:If you live in a house on a property and a tree on your property falls on your neighbour’s house and damages it, you will be liable for that damage. That is because it is your tree. Whether or not you knew the tree was unstable, or whether wild storms brought the tree down, it’s your tree wot done the damage.
Sorry scotlandx but I don’t think that’s correct. An owner of a strong, healthy tree that falls is not liable for any damage it causes to a neighbour property. It is considered “an act of God” under Australian law. And it shows how ownership of something does not automatically mean liability for the damage it might cause.
I realise a water pipe, dishwasher or other equipment is not a tree but negligence or malicious intent or a breach of a duty of care seem to be a requirement when establishing property damage liability. At least in published cases I have read. But I’m no lawyer either!
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