Introduction

Owners corporations in NSW often delay essential common property repairs, offering excuses about high costs or difficulties in finding contractors. This inaction can leave lot owners with severe damage to their apartment and, for investors, a growing bill for lost rental income. So what can be done to avoid that problem?

In this case study, we take a look at a recent case in which a lot owner, represented by PBL Law Group, succeeded in convincing NCAT to order a negligent owners corporation to pay for all repairs and compensate our client for 18 months of lost rent.

The Facts

The case, which centred on a strata building defect, involved a lot owner in a NSW strata scheme whose apartment suffered severe and ongoing water damage. The cause was traced to a “long-neglected roof membrane,” which is a clear example of common property that the owners corporation has a strict legal duty to maintain.

The Problem

Despite the significant damage, the owners corporation delayed taking any meaningful action for over a year. It offered various excuses, including the “high costs” of the proposed remediation and “difficulties with contractors.”

During this entire period, the apartment was uninhabitable, forcing the lot owner to suffer a direct and significant financial loss in the form of lost rental income. The owners corporation was attempting to use financial excuses to avoid its absolute statutory duty, leaving our client to bear the cost of the damage and the lost rent.

Application to NCAT

To resolve the strata dispute, PBL Law Group, on behalf of the lot owner, applied to the NSW Civil and Administrative Tribunal (NCAT). We demonstrated that the owners corporation was in clear breach of its strict duty to repair and maintain common property under Section 106 of the Strata Schemes Management Act 2015 (NSW).

We successfully argued that the owners corporation was liable for:

1. The full cost of repairing our client’s apartment; and
2. The 18 months of lost rental income, which was a “reasonably foreseeable loss” resulting directly from the failure to maintain the common property.

The Decision

NCAT ruled decisively in our client’s favour. The Tribunal was persuaded by our advocacy and rejected the owners corporation’s excuses, affirming that financial difficulties do not absolve an owners corporation of its statutory duties.

NCAT ordered the owners corporation to pay for all repairs to the apartment and to compensate our client in full for the 18 months of lost rent.

Conclusion

The case shows that a lot owner does not have to accept an owners corporation’s financial excuses for failing to repair common property. NCAT will enforce the strict duty under Section 106 and will not hesitate to order compensation for reasonably foreseeable losses, including lost rent, when that duty is breached.

This successful outcome, secured by PBL Law Group, safeguards the position of lot owners who are at risk from a non-compliant owners corporation. If you are facing a similar issue, contact our expert strata dispute NCAT lawyers at PBL Law Group for guidance on your legal options.