Introduction

Strata disputes can be challenging and stressful, but mediation offers a practical and effective way to resolve conflicts within strata communities. Mediation provides an opportunity for parties to work together with the help of a neutral mediator to reach a mutually agreeable solution. This guide outlines the key aspects of preparing for strata dispute mediation in NSW, including the benefits of mediation, the types of disputes suited for this process, and essential steps for successful preparation.

Why Should You Consider Mediating Strata Disputes?

Mediation is a valuable tool for resolving disputes within strata communities. It involves informal negotiations facilitated by a neutral mediator who helps the parties involved reach a mutually beneficial settlement. The process is particularly useful in community living situations, where disputes can be challenging and stressful for everyone involved.

The NSW Fair Trading offers a free mediation service designed to assist in resolving such disputes. The mediator’s role is to help the parties identify the key issues in dispute and to guide them in exploring options and strategies to address these issues effectively. By participating in mediation, you gain a real opportunity to improve your living situation and foster a better understanding of how you and the other owners want to coexist within the community.

If you’re struggling to reach an agreement with the Owners Corporation, other owners, or residents, and feel stuck without a clear way forward, mediation offers a constructive path. It can help to enhance communication, rebuild relationships, and ultimately improve the way your community functions, creating a more harmonious living environment for everyone.

When is NSW Fair Trading Mediation Compulsory for Resolving Strata Scheme Disputes? 

As per the Strata Schemes Management Act 2015 (SSMA 2015) in New South Wales, certain disputes must first go through mediation before they can be escalated to the NSW Civil and Administrative Tribunal (NCAT). This approach is designed to encourage parties to resolve their issues amicably without the need for formal legal intervention.

If a dispute remains unresolved after mediation, an application can be made to the NCAT. However, not all disputes can bypass mediation. The SSMA 2015, specifically section 227, mandates that the Registrar of NCAT cannot accept an application to resolve a dispute unless mediation has been attempted but was unsuccessful, one party refused to participate in mediation, or the Registrar deems mediation unnecessary or inappropriate under the circumstances.

What Type of Strata Disputes Are Suited for Mediation?

Mediation is particularly well-suited for resolving a wide range of issues that commonly arise in strata schemes. These include:

• Repairs and Maintenance: Disagreements over the repair and upkeep of common property or individual units.
• Water Penetration Problems: Conflicts related to leaks, drainage, or water damage affecting multiple units or common areas.
• Alterations and Additions to Common Property: Disputes about modifications or improvements made to shared spaces, such as installing air conditioners or other fixtures.
• Air Conditioners: Issues surrounding the installation, noise, or impact of air conditioning units.
• By-Laws: Disagreements over the interpretation, enforcement, or amendment of the rules governing the strata community.
• Noise Problems: Conflicts arising from excessive noise within the building, whether from other residents or external sources.
• Parking on Common Property: Disputes related to the use and allocation of parking spaces on shared property.
• Pets: Issues regarding the keeping of pets, including breaches of pet-related by-laws or disputes over pet behaviour.
• Validity of Meetings: Challenges to the legality or procedural correctness of strata meetings.
• Insurance Matters: Disputes involving insurance coverage, claims, or the management of insurance policies within the strata scheme.
• Building Managers: Conflicts involving the performance, duties, or actions of building managers.

These matters often benefit from the mediation process, as it allows parties to discuss their concerns in a structured yet informal setting, with the aim of reaching a mutually acceptable resolution.

Which Matters do not Require Strata Mediation Before Approaching the NCAT?

Certain matters, however, do not require mediation before being brought before the Tribunal. These exceptions include:

• Appointment of a Compulsory Strata Managing Agent: If an order is sought to appoint or require the appointment of a strata managing agent.
• Allocation of Unit Entitlements: Disputes related to the allocation of unit entitlements can go directly to NCAT.
• Access to a Lot by the Owners Corporation: This includes situations where access is needed to inspect or repair common property.
• Strata Records and Penalty Disputes: Disputes over access to strata records, or those involving the imposition of monetary penalties and associated costs, are also exempt from mandatory mediation.

For those disputes where mediation is required, the process begins by obtaining a mediation application form from the NSW Fair Trading website. After completing the form, it is lodged with NSW Fair Trading, which then contacts the parties involved to schedule the mediation session.

What Does the Dispute Resolution Process in Mediation Look Like?

The dispute resolution process in mediation for resolving NSW strata disputes through NSW Fair Trading is designed to be a more informal and less adversarial way to handle conflicts within strata schemes. Here’s an overview of what the process typically looks like:

Filing a Mediation Application

• The process begins when one party submits a mediation request to NSW Fair Trading. This request typically outlines the nature of the dispute, the parties involved, and any relevant documentation that supports the claim.
• Filling out your mediation application is a straightforward process that usually takes about 15 minutes to complete. You will require to submit the following details while lodging an application for mediation:
  • Your Personal Details: Make sure you have all your personal information ready, such as your name, contact details, and any other relevant identification information.
  • Details of the Person(s) Involved in the Dispute: Gather the contact details and any other relevant information about the individuals or parties you are in dispute with.
  • Strata Plan Number: Have your strata plan number on hand, as you will need to include this in your application.
  • Supporting Documents: If you have any documents that support your case, such as emails, reports, or photographs, make sure these are ready to be attached to your application.
• NSW Fair Trading assesses whether the dispute is suitable for mediation. Not all disputes can be resolved this way, so they will determine if mediation is an appropriate course of action.

Preparation and Agreement to Mediate

• If the dispute is deemed suitable, NSW Fair Trading will contact the other party to see if they are willing to participate in mediation. Both parties must agree to mediate for the process to proceed.
• Once both parties agree, a date and time for the mediation session are scheduled. The mediator is an independent, neutral third party assigned by NSW Fair Trading.

The Mediation Session

• During the mediation session, both parties have the opportunity to present their side of the dispute. The mediator facilitates the conversation, ensuring that each party has a chance to speak and that the discussion remains focused and constructive.
• The mediator does not make a decision or take sides but helps the parties explore possible solutions and reach a mutually acceptable agreement.

Reaching an Agreement

• If the parties reach an agreement, the terms are usually documented in writing. This agreement is not legally binding, but it can be formalised into a binding agreement if both parties choose to do so, either through further legal action or by consent.

Post-Mediation

• If an agreement is reached, the matter is considered resolved, and no further action is required. However, if mediation does not result in a resolution, the parties may need to consider other dispute resolution options, such as taking the matter to the NSW Civil and Administrative Tribunal (NCAT).
• Mediation outcomes and discussions are generally confidential, and any information shared cannot be used in subsequent tribunal or court proceedings without consent from both parties.

How Should You Prepare for a Mediation Session?

Thorough preparation before submitting a mediation application is crucial to achieving a positive outcome, especially in cases that require expert testimony or evidence.

Gathering Expert Evidence

In disputes like water ingress in your property, it’s essential to have an expert report that clearly identifies the problem’s source and outlines the necessary steps for repair. The report should be detailed, specifying the exact location of the issue (e.g., specific rooms or areas of common property) and providing a comprehensive plan for the work needed. This plan should include critical stages where inspections might be necessary, such as during the installation of waterproofing membranes. It’s important to quantify the required work, such as the number of tiles to be replaced or whether windows need to be entirely replaced instead of repaired. If the repairs will disrupt living conditions, consider whether alternative accommodations will be necessary. Any related damage, like damaged flooring or areas needing repainting, should also be carefully detailed and measured.

Collecting Additional Evidence

Beyond expert reports, it’s important to compile all relevant documentation that supports your case. For example, in a situation involving water damage, gather records showing when the problem first appeared, your communications with the strata committee or strata manager, and their responses. Include photos of the damage, such as mould, and any related communications with tenants or real estate agents regarding health concerns or rent reductions. If possible, obtain quotes from contractors based on the expert’s recommended repairs. These quotes should outline the costs, start dates, and expected completion times, and it’s preferable that they be addressed to the owners corporation for their approval.

All this documentation should be included with your mediation application to support your case.

Setting Out Proposed Terms for Mediation

When applying for mediation, it’s beneficial to clearly state the terms you seek in the agreement. For example, you might request that the owners corporation commit to carrying out the repairs specified in the expert report, ensure the work is inspected at critical stages by a qualified consultant, and address any additional damage identified. You could also specify a deadline for completing the work and ask for compensation for any losses you’ve incurred, such as reduced rent or costs related to expert and legal services.

Seeking Legal Advice

Given the complexity of preparing evidence for mediation, it’s often advisable to consult a legal professional before submitting your application. Our team of expert lawyers can help ensure your evidence is thorough and your application is well-prepared, increasing the likelihood of a successful mediation process.

Key Takeaways: Mediation Makes Resolving Strata Disputes Easier, Faster and Affordable

Mediation is a valuable tool for resolving strata disputes, offering a quicker, more affordable, and less confrontational alternative to legal proceedings. By preparing thoroughly, gathering the necessary evidence, and seeking professional advice, you can increase your chances of reaching a successful outcome. If you’re facing a strata dispute, consider mediation as your first step towards a resolution. For expert guidance on preparing for mediation or navigating complex strata issues, contact our law firm today. We’re here to help you achieve a fair and efficient resolution to all strata matters.