Owners Corp Responsible for Repairing Property Lots?

Written on the 24 August 2021

The most recent case Mastellone v The Owners-Strata Plan No 87110 raises the question, "Does repairing property lots fall under the responsibilities of an Owners Corporation?".

The following is a background overview of the case:

-      The Tribunal dismissed Ms. Mastellone's claim for painting the ceilings of her lot's bedroom, kitchen, and living room; for which the paintwork is done to rectify the water damages caused by the Owners Corporation failure to maintain and repair the common property roof. A failure to do so is claimed as a breach of section 106(1) of the Strata Schemes Management Act 2015.

-       However, the paintwork was done in the lot property, not the common property. Therefore, the Tribunal dismissed the claim based on a special by-law and common property memorandum, clearing Owners Corporation from any paintwork liability -- since it was found that there is no breach of section 106(1) of the Act.

-       The case went on when Ms. Mastellone contended that the Tribunal misinterpreted the effect of the by-law and common property memorandum. However, it was ruled that the Tribunal has no jurisdiction to order Owners Corporation to carry out repair work to the internal ceiling because it was considered as the property of a lot owner.

Many of us question whether or not the ruling of Mastellone v The Owners-Strata Plan No 87110 was correctly decided. Hence, understanding the Strata Schemes Management Act 2015 is crucial to interpret an Owners Corporation's responsibilities.

Strata Schemes Management Act 2015 (SSMA)

Under the strata legislation, below is the primary responsibilities of an Owners Corporation:

1. Management Responsibilities: Under section 9(3)(c) of the SSMA, Owners Corporation is responsible for maintaining and repairing the common property area of the strata scheme. However, it was not found that repairing private property of a lot owner is part of an Owners Corporation's responsibilities.

1. Fiscal Responsibilities: Under part 5 of the SSMA, Owners Corporation is responsible for creating a capital works fund and estimating budget for future expenditure (repair and maintenance of common property).

1. Repair and Maintenance Responsibilities: Under section 106(1) of the SSMA, Owners Corporation is responsible for repairing and maintaining common property and the private property fixed in the common property. However, an Owners Corporation is not found to be responsible for repairing a lot owner's private property.

Conclusion

The Strata Schemes Management Act 2015 shows how Owners Corporation did not fall responsible for repairing property lots caused by water damages from the common property defect. In this view, the Tribunal did not have the power to order an Owners Corporation to repair the damage.

There are some contradicting opinions in the industry. Thus, it would be interesting to see the Tribunal's decision in future cases like Ms. Mastellone's.

Source:

-       JS Mueller & Co

-       Civil and Administrative Tribunal NSW