Introduction

Undertaking renovations or alterations affecting common property in a NSW strata scheme without prior approval from the owners corporation can lead to significant disputes. The recent NSW Supreme Court decision in Colman v The Owners – Strata Plan No. 61131 [2025] NSWSC 63 clarifies whether such unauthorised works can be approved retrospectively, impacting both lot owners and owners corporations managing strata property.

In this article, you learn key lessons from the Colman case, exploring the possibility and limitations surrounding retrospective approval under the Strata Schemes Management Act 2015 (NSW). It offers insights into the powers of the owners corporation and the NSW Civil and Administrative Tribunal (NCAT) to approve after works are completed, the prerequisites, and the implications for recovering costs associated with unauthorised renovation work.

Background of the Colman Case and Unauthorised Works

Colman v The Owners – Strata Plan 61131 [2025] NSWSC 63 involved a dispute between a lot owner, Mr. Colman, and the owners corporation of a residential strata scheme in Pyrmont, Sydney. The core issue stemmed from works Mr. Colman undertook on his rooftop terrace, which formed part of his lot but also affected common property within the strata scheme.

The situation unfolded in several stages:

• Initially, the owners corporation engaged a contractor to repair a water leak originating from an expansion joint on the terrace, which is classified as common property
• During these approved repairs, the contractor identified broader issues, including problems with the waterproofing membrane across the terrace area
• Subsequently, Mr. Colman instructed the contractor to carry out additional, more extensive renovation work without first obtaining the required approval from the owners corporation

The unauthorised renovation included removing and replacing tiles and the waterproofing membrane across the western terrace area. These actions impacted common property and should have received prior approval per Strata Schemes Management Act 2015 (NSW).

After completing the works, Mr. Colman sought retrospective approval for these unauthorised renovations and attempted to recover the costs from the owners corporation. This led to legal proceedings that eventually reached the NSW Supreme Court.

Implications for Recovering Costs: Damages Claims 

A significant finding from Colman v The Owners – Strata Plan No. 61131 [2025] NSWSC 63 decision relates to a lot owner’s ability to recover costs for unauthorised works. The NSW Supreme Court confirmed that lot owners cannot claim damages or compensation under Section 106(5) of the Strata Schemes Management Act 2015 (NSW) for the cost of works undertaken on common property without the required approval. This restriction applies regardless of whether:

• The owners corporation later grants retrospective approval for the works
• The NCAT later grants retrospective approval

The reasoning behind this is tied to the structure of the Strata Schemes Management Act 2015 (NSW). The requirement for approval, whether sought before or after the work is done, is fundamental to how the legislation balances the rights and interests of individual lot owners against the owners corporation’s responsibility to manage the strata scheme.

Allowing a lot owner to recover costs for unauthorised works, even necessary repairs, without obtaining approval from the owners corporation or an order from NCAT would undermine this statutory framework.

Therefore, undertaking renovation work or repairs to the common property without approval carries substantial financial risk for a lot owner. The Colman decision clarifies that even if the work:

• Addresses a genuine defect
• Later, it receives retrospective approval

The owner generally cannot compel the owners corporation to reimburse the expenses incurred under a section 106(5) damages claim.

However, the Court did leave a vital question unresolved. It remains unclear whether a lot owner who carries out necessary repairs to the common property, which the owners corporation failed to perform in breach of its duty, could potentially recover those costs if approval for the works is subsequently obtained, either from the owners corporation or NCAT.

Previous case law under earlier legislation suggested recovery was impossible, but the Court noted this does not definitively settle the matter under the current Strata Schemes Management Act 2015 (NSW).

Practical Implications for Lot Owners and Owners Corporations

Advice for Lot Owners Undertaking Renovations or Repairs

The decision in Colman v The Owners – Strata Plan No. 61131 [2025] NSWSC 63 emphasises the importance of seeking and obtaining approval from the owners corporation before starting any work affecting the common property in an NSW strata scheme. This requirement applies to all types of work, including minor renovations, significant alterations, or repairs to common property elements connected to your lot.

Proceeding without the required approval carries substantial risks, including:

• Inability to Recover Costs: You generally cannot recover costs or damages from the owners corporation for works done without approval, even if they were necessary repairs the owners corporation failed to perform. Section 106(5) of the Strata Schemes Management Act 2015 (NSW) typically does not cover costs for unapproved works, regardless of whether retrospective approval is later granted.
• Removal Orders: The owners corporation can apply to the NCAT for orders requiring you to remove the unauthorised works and reinstate the common property to its original condition at your expense.
• Legal and Other Costs: You may face significant legal costs in disputes with the owners corporation or if enforcement action is taken through NCAT.
• Liability for Damage: You could be held liable for any damage caused to common property or other lots during or as a result of the unauthorised works.
• Selling Difficulties: The lack of approval for alterations can create complications when selling your property, potentially deterring purchasers or impacting mortgage lender decisions.

While the Colman case confirmed that retrospective approval is legally possible, obtaining it is often difficult and uncertain. It requires meeting a high threshold, including demonstrating why prior approval wasn’t sought and providing comprehensive evidence that the completed works meet all standards.

For NCAT to grant retrospective approval under section 126(2) of the Strata Schemes Management Act 2015 (NSW), you must have first sought approval from the owners corporation (even after the fact), and its refusal must be deemed unreasonable. Relying on this pathway is a significant gamble; securing prior approval is the only safe and compliant approach.

Guidance for Owners Corporations Handling Unauthorised Works

When an owners corporation discovers unauthorised works affecting common property, it should approach the situation strategically, informed by the principles clarified in Colman v The Owners – Strata Plan No. 61131 [2025] NSWSC 63. If the lot owner requests retrospective approval, the owners corporation can grant it but should assess the application carefully.

Key considerations when evaluating a request for retrospective approval include:

• Nature and Impact: Assess the extent of the unauthorised works and their impact on common property structure, safety, services, waterproofing, and appearance.
• Evidence of Compliance: The lot owner must provide comprehensive, independent expert evidence (like engineering reports and compliance certificates) demonstrating the works meet relevant standards and codes.
• Reason for Non-Compliance: Consider why the owner failed to seek prior approval – was it a genuine oversight or a deliberate disregard for the process?
• Prejudice to the Scheme: Evaluate potential prejudice, such as impacts on building insurance, future maintenance liabilities, or setting an undesirable precedent for other owners.
• Likelihood of Prospective Approval: Consider whether the completed works would likely have been approved if sought correctly beforehand.

Owners corporations must manage the risks associated with unauthorised works, including potential latent defects and insurance implications. It’s also crucial to act reasonably and promptly when handling applications, as unreasonable delays or failures to consider a request could constitute ‘constructive refusal,’ potentially allowing the owner to seek orders from NCAT.

If retrospective approval is inappropriate or not sought, the owners corporation has several enforcement options. These include:

• Issuing a notice to comply with the Strata Schemes Management Act 2015 (NSW) or relevant by-laws
• Applying to NCAT for orders compelling the owner to remove the works and reinstate the common property

Conclusion

Colman v The Owners – Strata Plan No. 61131 [2025] NSWSC 63 decision clarifies that while retrospective approval for unauthorised strata works, affecting common property is possible in NSW, it is subject to strict limitations under the Strata Schemes Management Act 2015 (NSW). Key lessons include the need for lot owners to seek approval from the owners corporation and the inability to recover costs for unapproved works, even if later validated by the owners corporation or NCAT.

Navigating the complexities of strata renovations, approvals, and disputes requires careful legal consideration. For trusted expertise and guidance on NSW property, construction, and strata law matters, contact PBL Law Group today to discuss your situation and ensure compliance.

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