VIC: Q&A Owners Corporation Repairs and Maintenance

These Q&As are about owners corporation repairs and maintenance to areas of common property in VIC strata buildings.

Table of Contents:

• QUESTION: There are drainage issues in our building that may require major works. The owners corporation are requesting consent to go ahead but there is uncertainty around the scope of works and who will wear the costs. How do we proceed without knowing full costs?
• QUESTION: Our unit has been invaded by bird mites coming from the common property roof area. Should the owners corporation be responsible for the health and safety of residents?
• QUESTION: Is the committee legally required – or expected – to undertake an Occupational Health and Safety report on the property?
• QUESTION: What is the legal situation if a committee member objects to paying a levy for the commencement of work required to meet a building’s OH&S requirements?
• QUESTION: Is the OC required to carry out aesthetic maintenance of common property?
• QUESTION: Can an owners corporation divest themselves of the financial responsibility for maintenance part of the common property
• QUESTION: Our Owners Corporation will not repair the two failing hot water systems at our scheme. Are the Owners Corporation being irresponsible in failing to maintain these items?
• QUESTION: We have separate water meters in our small scheme. One of the lot’s water meters was damaged. Who should pay for the repair? Or can we claim insurance to cover the cost?

Question: There are drainage issues in our building that may require major works. The owners corporation are requesting consent to go ahead but there is uncertainty around the scope of works and who will wear the costs. How do we proceed without knowing full costs?

We own a property in an owners corporation and have been made aware of some drainage issues that may require major works. The owners corporation are asking for consent to proceed with repairs by 9 am tomorrow but have only provided a rate schedule for the plumber and there is uncertainty around who will wear the costs. 

This has been an issue in the past that was investigated and we have asked for previous minutes however the strata management company have told us that they don’t have access to these as they acquired a previous owners corporation and no longer have the records.

My understanding is that records must be held for at least 7 years in Victoria?

Answer: The trick/trap here, is that it may not be possible to establish who’s drain has the issue, or even what exactly is the issue, until the plumber has attended.

The first thing to unpack, yes, the Owners Corporations Act 2006 requires that records are kept for at least 7 years.

How long must records be kept?

“Section 145 (3) An owners corporation must keep all other documents of a kind set out in section 144 for at least 7 years”

Whilst the act requires this, from a practical point of view if there has been a change in manager and those records simply can’t be located as they were never provided at handover, you may be stuck in no-mans land. If this is the case your next best bet is to ask if any of the other lot owner might have a copy in their file.

As far as the drainage issue, it is complicated. Unfortunately not one you can receive a single defining response in a message here. All I can do is discuss some practicalities, common themes and traps in general terms.

Drainage issues can be many and varied, both in terms of the cause, and also, who is responsible. The overarching principle is this: if a service is only for the benefit of a single lot alone, that service is the responsibility of the lot owner. The trick/trap here, is that it may not be possible to establish who’s drain has the issue, or even, what exactly is the issue, until the plumber has attended. Sometimes, even after the plumber attends you still mightn’t get a definitive answer, not necessarily the plumber’s fault, it’s just the reality is water issues can be complicated.

Here is the relevant part of the act:

Owners corporation must repair and maintain services

1. An owners corporation must repair and maintain a service in or relating to a lot that is for the benefit of more than one lot and the common property.
2. An owners corporation may, at the request and expense of a lot owner, repair and maintain a service in or relating to a lot if it is impracticable for the lot owner to repair or maintain that service.

In short, if the OC does undertake works in good faith, and ends up discovering it is your property or service that has inadvertently caused the issue, then the OC does indeed have a legitimate cause to recover those costs from you as you are the owner of that service.

If concerned about a bottomless pit of cost, it might be worth speaking to the Committee about capping the scope of the works, whether time limit or cost limit. At least that way the potential maximum cost is limited. The trap here is that setting a limit could affect the plumber’s ability to actually establish the cause if for example they simply have to stop work once they hit a certain dollar number. You just have to pray they can find the issue in the time that they are given.

100%, it is never fun paying extra money for anything. Additionally, the unknown factor, in this case, is simply annoying, but unfortunately, sometimes the only way to get a definitive answer is to get some work down first, incur a cost, and then if found to be a single lot issue recover those funds accordingly. The one angle I would always endeavour to apply in matters just like this if the plumber’s investigation found that instead of your lot, it was one of your neighbour’s private drains causing the issue, surely you would feel it fair the OC recovers that cost from your neighbour?

Deryck Walker
SMTI
[email protected]

This post appears in Strata News #544.

Question: Our unit has been invaded by bird mites coming from the common property roof area. Should the owners corporation be responsible for the health and safety of residents?

Last autumn our unit was invaded by bird mites coming from the common property roof area. Our daughter had to seek medical attention for extensive bites from the insects. We had the interior of our unit treated by a pest control agent and he recommended highly that an external inspection be conducted to address the problem comprehensively.

The OC Committee has refused to engage a pest control service to conduct an inspection and has furthermore refused to allow us access to have an inspection conducted at our own expense.

This seems to be a breach of the OC’s obligation to protect resident’s health and safety from hazards located on common property.

Answer: An owners corporation must “act honestly and in good faith; and exercise due care and diligence.”

Establishing Responsibility and a Duty of Care

Section 5 and section 117 of the Owners Corporation Act 2006 imposes a responsibility and a duty of care for both the Owners Corporation as a collective; and individual members of its elected committee. The wording in both sections are the same and read:

An owners corporation and members of its elected committee must – “act honestly and in good faith; and exercise due care and diligence.”

The purpose of an owners corporation -and by extension, its elected committee- is detailed within section 4 of the Owners Corporation Act 2006. The functions of an owners corporation include:

1. to manage and administer the common property;
2. to repair and maintain—
   
   1. the common property;
   2. the chattels, fixtures, fittings and services related to the common property or its enjoyment;

The requirement to repair and maintain the common property is solidified within section 46, where the Act details that an owners corporation must “repair and maintain the common property, the chattels, fixtures, fittings and services related to the common property or its enjoyment.”

Provided a lot owner can reasonably prove that an issue is originating from the common property, it is our view that an owners corporation and members of its elected committee have a duty of care to “act honestly and in good faith; and exercise due care and diligence” by taking appropriate steps to investigate the concern, and if required, commission any needed action.

Failure to do so may constitute a breach of numerous obligations and duty of care under sections 5, 46 and 117. It is worth noting, by a feature of section 118, if it is found that a member of a committee does or does not do something resulting in a breach of their obligations and duty of care under section 117 – they lose the liability protections afforded to them under the Act.

What can a lot owner do in this circumstance?

If an owners corporation and its committee fail in their duty of care, Part 11 sections 162, 163 and 165 offers a potential remedy to aggrieved lot owners through an application to VCAT.

Section 163(b) permits a Lot Owner to make an application against the owners corporation (see section 162(a)) about its operation. If a lot owner can convince a member that an order to do or not do something is fair and reasonable, the VCAT member has power under section 165 of the OCA2006 and the VCAT Act 1998 to order the owners corporation to do something and/or comply with the Act. Section 165(c) also provides for monetary awards relating to restitution and damages; however, you may want to seek further legal advice around this as under section 109(1) of the VCAT Act 1998, the default position when awarding costs is that each party is to bear their own costs, and damages may only be awarded if deemed fair to do so. For an example of a recent case that demonstrates that cost awards are the exception, not the rule, see paragraph 13 of Hopper v Owners Corporation SP 25940G (Owners Corporations) [2021] VCAT 707.

Practical Solution

It is rarely in the interest of an owners corporation to be taken to VCAT, and the members of its committee will be cognisant of this. We recommend that lot owners and their appointed committee keep communication between parties open, constructive, and in good faith – to try and meet the interest of all parties without the need to get the tribunal involved.

Michael Darby
Quantum United Management Pty Ltd
E: [email protected]
P: +61 3 8360-8800

This post appears in the October 2021 edition of The VIC Strata Magazine.

Question: Is the committee legally required – or expected – to undertake an Occupational Health and Safety report on the property?

I am on an owners corporation committee for a strata development in Melbourne. Is the committee legally required – or expected – to undertake an Occupational Health and Safety report on the property? While we are extremely diligent in making our development as ‘safe’ as we possibly can, should we (or is it deemed necessary) engage the services of consultancy to undertake a formal Building Safety Assessment (including OH&S Management/Essential Safety Measures)? If so, if there are identified high-level safety concerns, is the committee then responsible for taking action to mitigate those issues?

Answer: Now more than ever is the time to ensure your common property has been assessed and made free from hazards.

Since the pandemic arrived on our shores, more and more workers have been forced to conduct business from their home as directed by the federal government to help us slow the spread of COVID-19. In light of this increased presence in residential and mixed-use strata schemes, the likelihood of an injury occurring in these spaces has also increased dramatically.

Now more than ever is the time to ensure your common property has been assessed and made free from hazards. There are compelling risks driving the building’s need for safety obligations. They are the duty of care and the applicable compliance codes, legislation and Australian Standards that apply to buildings.

While compliance means you are taking steps to ensure your property is safe and protecting yourself from the liability of accidents and injury occurring, the reality is that your biggest risk is not a compliance risk- it is trumped by your duty of care risk.

Under the Occupational Health and Safety Act 2004 an Owners Corporation or an owner, must consider their duties under the law, especially regarding the health and safety of any person entering and egressing the common property.

Section 20 (1) outlines the duty to ensure health and safety, requiring the Owners Corporation to eliminate or minimise risks so far as is reasonably practicable.

Section 20(2) Reasonably practicable is outlined as regard must be had to the following matters:

• Likelihood
• Degree of harm
• What is known about the hazard/risk and ways of eliminating or minimising it
• Availability and suitability of ways to eliminate or minimise the risk
• The cost of eliminating the hazard or risk

Put simply, Owners Corporations have a non-delegable duty to do all that is ‘reasonably practicable’ to ensure the health and safety of all occupants of their properties. This is a common law duty of care that is reinforced and echoed by multiple pieces of legislation.

Meeting these requirements warrants an active stance by an Owners Corporation to be engaging and monitoring safety issues on the property. Engaging a professional company such as Solutions IE to take an active part in this process is a significant step towards mitigating the Owners Corporations liability and prevent injury.

I am the Chairperson at my scheme. Over the last 6 years I have worked with my fellow committee members to be pro-active and to look at everything we do from the above perspective. With my experience and relevant skill set, I do not do any reports nor allow any owner/resident to undertake any compliance matters into their own hands. This is because it opens the committee and the resident up to litigation.

We motion and vote up getting a Safety Report completed every 12 months (not SIE in our case, as I think that would be a conflict of interest). The committee then agrees for the rectifications to be done and our Owners Corporation Manager then enlists the trade services required. After the Safety Report to-do-list has been completed then I believe if an accident were to occur on the common property, we could show a court of law that we have done as far as is reasonably practical to minimise risk.

Accidents will happen, if we all do our best to minimise the risk of harm, this will also assist the OC in getting insured for a reasonable amount. The same goes for poorly maintained properties. Well maintained building will have a positive impact on your premium. Insurers are now pricing strata to reflect the risk of the area. Maintain the building, proactive maintenance helps prevent claims.

In summary, there is no piece of legislation that I can point to that states an OC must do this or else. The best advice I can give is from when I was asked by SCA(Vic) to present on Emergency Management Plans AS3745-2010 and I had a Work Health Safety Specialist Lawyer speak first. He said, “The Owners Corporation that fails to comply with OHS and Essential Safety Measures does so at their own peril” and by this he meant, when something does go wrong, the judge will ask “what did you do to meet or exceed the Australian Standard?”.

Our standards have been put in place as the minimum requirement to assist us in reducing harm to ourselves, owner’s, tenants, visitors and even trespassers who come onto the premises (if you would like to understand the legal requirement for this, please refer to Hackshaw v Shaw [1984] 155 CLR 614). If we all try to be proactive in managing our obligations this should help result in living in a safe and harmonious community.

Peter Berney
Solutions in Engineering
E: [email protected]
P: 1300 136 036

This post appears in the August 2021 edition of The VIC Strata Magazine.

Question: What is the legal situation if a committee member objects to paying a levy for the commencement of work required to meet a building’s OH&S requirements?

What is the legal situation if a committee member objects to paying a levy for the commencement of work required to meet a building’s OH&S requirements (CO extraction unit inspections & working at heights on a 2 story building with basement garage) unless we spend time and money to try and determine if we can claim against someone else (roof access was not included in the build). This committee member has threatened to sue other members if we proceed. The decision to go ahead was passed at both the AGM and a subsequent follow up meeting to decide on acceptance of a quote with only 1 vote against the motion at each meeting (the objector).

Do works to rectify an OH&S problem need to be voted on anyway or do they have to be done regardless of the objections by some of the owners (in this case 1 objection)?

The special levy amounts to approx $1000 per lot owner.

Answer: The works required to be carried out is to meet the building’s OH&S requirements and therefore it is the OC’s legal responsibility to ensure the safety requirements are attended to in a timely manner.

In the question below we have assumed the following:

• A quorum was achieved at the AGM.
• The Special levy is not twice the annual budget (as such does not require a special resolution).
• The motion to raise the special levy and to proceed with the required OH&S works was worded and convened legally in accordance with the OC Act.
• The CO Extraction unit is located on common property and services all lots.

The works required to be carried out is to meet the building’s OH&S requirements and therefore it is the OC’s legal responsibility to ensure the safety requirements are attended to in a timely manner.

All members of the OC are liable for any liability events that occur on common property. Should an incident occur where the OC was aware or should have been aware of a hazard that caused an injury, the OC (all lot owners) may be collectively liable. It is important the Common property areas and its contents are maintained free of any risks where possible to mitigate the responsibility of the Owners Corporation.

Considering the works are related to rectify an OH&S requirement and the majority of the owners have voted in favour, the works should proceed despite of 1 vote against.

It is important that all documentation such as the meeting minutes, OH&S report and communication are issued and kept appropriately to address any disputes that may arise later.

The OC may seek to recoup the costs incurred by making a claim against the builders due to their negligence, once the safety matter has been rectified.

Key point to keep in mind while these decisions are made is that the Committee ensure they are acting with due care and diligence as they move forward with their decisions, as this will avoid most disputes.

Michael Darby
Quantum United Management Pty Ltd
E: [email protected]
P: +61 3 8360-8800

This post appears in Strata News #473.

Question: Is the OC required to carry out aesthetic maintenance of common property?

Is the OC required to carry out aesthetic maintenance of common property?

There has been a lack of periodic painting of the common property. The driveway has paint peeling off the concrete and the entrance gate is in need of rust treatment and repainting.

Answer: The common areas should not fall into such poor condition so as to adversely affect the use and enjoyment of those living in the building.

Yes, as per section 130 of the OC Act 2006 below, every lot owner (the OC) has the responsibility to keep the common areas of the property in “a state of good and serviceable repair” for the enjoyment of all concerned.

The common areas should not fall into such poor condition so as to adversely affect the use and enjoyment of those living in the building. With necessary on-going maintenance, it may be prudent to establish a sinking fund as a means of setting aside money for the more costly repairs and care that the common areas may require.

130. Care of common property

A lot owner must not use or neglect the common property or permit it to be used or neglected in a manner that is likely to cause damage or deterioration to the common property.

Guy Garreffa
StrataPoint
E: [email protected]
P: (03) 8726 9962

This post appears in the April 2021 edition of The VIC Strata Magazine.

Question: Can an owners corporation divest themselves of the financial responsibility for maintenance part of the common property?

Our owners corporation is made up of 7 owners. We live in one of two homes at the front of the property. Both of these lots have extensive front common property yards. The remaining 5 lots have much smaller common property lawns around their lots.

In a mail vote organised by the owners corporation manager, the majority of the lot owners have suggested each lot only look after the common property in front of their own lots. This decision will result in an increased financial burden on me and my front lot neighbour against our wishes. There was no open forum to discuss this decision, only a mail vote and that was it.

Can an owners corporation divest themselves of the financial responsibility for maintenance part of the common property? Can they enforce a rule stating that lot owners maintain the common property adjacent to their lots.

Answer: The Owners Corporation cannot legally enforce rules they have created if the rule contradicts any section of the Owners Corporation Act.

The Owners Corporation cannot legally enforce rules they have created if the rule contradicts any section of the Owners Corporation Act.

In this case, Section 46 requires the Owners Corporation to maintain the common property.

Therefore, you cannot create/enforce a rule that requires otherwise.

The owner is within their rights to refuse to maintain the common area in question.

Tristan Veurink
VIC Branch Manager
Civium Communities
E: [email protected]

This post appears in the April 2021 edition of The VIC Strata Magazine.

Question: Our Owners Corporation will not repair the two failing hot water systems at our scheme. Are the Owners Corporation being irresponsible in failing to maintain these items?

We are an Apartment of 28 lots with two Hot Water Systems.

Only one hot water system has been Functioning for the past eight months. The second hot water system has now failed too.

Are the Owners Corporation being irresponsible in failing to maintain the second hot water system/backup unit? Where can I go as I have registered a complaint and nothing has been done.

Answer: It is always good practice for the Owners Corporation to communicate what is happening so residents stay informed and can plan ahead.

This matter should be relatively straight forward to resolve, but there may be another reason why the Owners Corporation has not yet repaired or replaced the system.

This can be any number of reasons, such as; a lack of funds, the Committee is currently reviewing quotations to seek the best option or organising a tradesperson may be difficult in these times. It may even be that the system(s) need to be upgraded to meet current compliance, or relocated from the roof (gravity fed) to ground level.

Whatever the reason, it is always good practice for the Owners Corporation to communicate what is happening so residents stay informed and can plan ahead. Communication is done so via the Manager on the Owners Corporations behalf.

If you have two Hot Water Systems in place and one ceased to function eight months prior, that should have been a clear indication to look at repairs to that system urgently. Doing so would have mitigated the current circumstances.

Regardless, it is now a matter of urgency that this critical service to each of the apartments is resolved.

With the limited information provided on why the Owners Corporation has not resolved your issue, it is hard to say whether they are irresponsible or not.

A primary function of an Owners Corporation is to repair and maintain common property. Part of common property can also be the services which service each lot, such as hot water. Refer to sections 4, 46 and 47 of the Owners Corporation Act 2006.

In this scenario, you could class the hot water service in your building as a service that the Owners Corporation is responsible to repair and maintain.

The question is, has your Owners Corporation failed in its duty to repair and maintain a service which is for the benefit of more than one lot and the common property?

Something that you will need to play out after you have resolved the issue at hand.

There is a mechanism to lodge a formal complaint to the Owners Corporation. However, this is to notify the Owners Corporation of a breach of the rules, Act or Regulations by another lot owner, occupier or Manager. It is not necessarily to lodge a complaint to the Owners Corporation about the Owners Corporation breaching rules, Act or Regulations.

Your first point of contact should be the Owners Corporation Manager to provide you with an update on the status of the repairs. If they are not responsive, a matter such as this should be referred to Consumer Affairs.

Consumer Affairs has an Owners Corporation division which assists owners with issues that are difficult to navigate. Often, they are a sounding board for owners who are not able to resolve issues themselves. Consumer affairs can facilitate discussions between parties and will generally contact the Owners Corporation or Manager to assist with the matter in general. I suggest contacting a representative at your earliest convenience.

Joel Chamberlain
Horizon Strata Management Group
E: [email protected]
P: 03 9687 7788

This post appears in Strata News #359.

Question: We have separate water meters in our small scheme. One of the lot’s water meters was damaged. Who should pay for the repair? Or can we claim insurance to cover the cost?

I am the owner of a lot in a 4 unit scheme under strata management in Victoria. We have separate water meters installed.

Damage was caused to Unit 1’s separate water meter assembly. Repair costs for the damage were invoiced by the strata manager to the owners corporation. Combined funds from our owners corporation account were used to pay for the repairs.

I believe, under the OWNERS CORPORATIONS ACT 2006 – SECT 129 that the liability for the repairs rests solely on the lot owners on Unit 1.

Care of lots

A lot owner must—

1. properly maintain in a state of good and serviceable repair any part of the lot that affects the outward appearance of the lot or the use or enjoyment of other lots or the common property; and
2. maintain any service that serves that lot exclusively.

The strata manager has also advised that a police report was required to claim the repairs under insurance. Is this correct? Surely we only need the invoice for the repair.

Answer: A lot owner is required to maintain their lot and any service the serves that lot exclusively.

If each lot has installed a separate water meter, this service would now be classed as an exclusive service to each lot. In short, yes. A lot owner is required to maintain their lot and any service the serves that lot exclusively.

The key with plumbing and distinguishing where responsibility lies is to identify the point at which it branches off to serve that lot exclusively.

Regarding your second question regarding an insurance claim, it is difficult to provide a specific answer without all of the details behind the incident, so I will try to provide you with examples to assist where possible.

With insurance, it will come down to the type of incident that has occurred. Incidents are referred to as insurable events.

You mentioned that the water meter was damaged and went on to state you have been requested to provide a police report. Typically, a police report can be required when the damage relates to theft, vandalism or malicious damage by a third party.

From this information, I can assume that you are unaware of how the damage was caused, but the insurer may believe it to be malicious such as vandalism. I would suggest clarifying how the incident occurred with your Manager and if necessary, seeking what the insurer requires in writing from them directly.

If you have an insurance broker, then it would be recommended to seek their assistance and advice first. They are often the best source of support when a claim becomes difficult and will work with you to convey the right information to the insurer.

At the very minimum, yes, you will need a plumber’s invoice and report to clarify the loss you have incurred to the insurer.

If the damage is exclusive to the water meter for Unit 1 and even if you cannot pinpoint how the damage has occurred, it is, unfortunately, Unit 1’s responsibility to repair. Thankfully, insurance exists for circumstances such as this, so they should seek guidance from the insurer as to whether this is covered under the policy.

Joel Chamberlain
Horizon Strata Management Group
E: [email protected]
P: 03 9687 7788

This post appears in Strata News #350.

Have a question about damage to separate water meters or something to add to the article? Leave a comment below.

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