The Owners Corporation’s Duty to Maintain and Repair Common Property
- Section 62(1) of the Strata Schemes Management Act 1996 (“SSMA”) states that an owners corporation must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation.
- The leading authority in NSW is The Owners Strata Plan 50276 v Thoo  NSWCA 270, where the NSW Supreme Court of Appeal extensively considered an owners corporation’s statutory duty under the Strata Schemes Management Act 1996 (NSW) (“SSMA”) and found that a breach of section 62 does not give rise to an action for damages.
The Exceptions to the Duty to Maintain and Repair Common Property include:
- By order of the Tribunal or Court.
- Where the owners corporation specially resolves in general meeting that it is inappropriate to repair and maintain particular items of property.
- Where the obligation to maintain and repair common property is transferred to a lot owner under an exclusive use or special privilege by-law made pursuant to sections 51 and 52 of the SSMA.
Consequences of a Failure to Maintain and Repair Common Property include:
- Adjudicator’s orders to rectify under section 138 of the SSMA
- Loss of value to lot
- Loss of income / rent for lot
- Adjudicator’s orders to appoint a compulsory strata managing agent under section 162 of the SSMA
- Public liability insurance claims, professional indemnity claims against strata managing agents and office bearer liability claims against members of the executive committee.
Future Claims For a Failure to Maintain and Repair Common Property
The Court of Appeal in Thoo’s case above has now declined to follow the previous decisions of several single judges of the Supreme Court of NSW and has determined that an owners corporation’s breach of section 62 of the SSMA does not give rise to an action for damages for breach of statutory duty. It is likely such claims will now be brought in negligence and/or nuisance. It is also likely that a breach of section 62 of the SSMA will be pleaded as a particular of negligence as opposed to a separate cause of action for breach of section 62.
Affected parties should obtain specialist legal advice on their rights and remedies, which may include suing the owners corporation in negligence and/or nuisance, before pursuing a claim for damages against the owners corporation, including loss of rent or diminution in value of a property.
The information in this articles is correct as at 24/11/2013. This document is not legal advice and you should seek legal advice regarding any of the issues referred to.