VIC: Q&A How to fix strata building defects

This VIC question is about the next steps to take after a builder refuses to repair a major strata building defect.

Table of Contents:

• QUESTION: After cladding rectification work was done on our balcony, our AC no longer works and we’ve noted other damage. The OC will not take any action. What do we do now?
• QUESTION: Does Sedgwick provide strata managers with a templated scope of works or support or documents to ensure the insurers are put at ease?
• QUESTION: One wall in my unit has developed substantial cracks over the past 10 years. The owners corporation has investigated the cause but the insurance company has denied the claim. Is the OC responsible to repair any damage?
• QUESTION: An owner has water on the window sill. It’s difficult to assess where the water is coming from. How do we find the source of the leak?
• QUESTION: I need to prove the disrepair of the gutters over the past five years has caused water damage and mould to the building. Should I get a Building Surveyors Report?
• QUESTION: My balcony’s waterproofing was tested and I received advice that I would have to replace the membrane on the entire balcony (cost of $80 000+). What options do I have?
• QUESTION: We have a number of strata building defect issues with the building and the builder now refuses to carry out any more work. We are communicating through his solicitor, but still, nothing gets done. Where do we go from here?

Question: After cladding rectification work was done on our balcony, our AC no longer works and we’ve noted other damage. The OC will not take any action. What do we do now?

I own a Docklands apartment on the 11th floor of the building. Two months ago, the Owners Corporation organised balcony cladding rectification works. While the work was being done, the balcony was inaccessible and our air-conditioning unit installed on our balcony was turned off. Even though the AC is over 15 years old, it has been regularly serviced and its compressor motor was changed 2 years ago. Before the balcony cladding works commenced, the contractors carried out pre-inspection testing and found the AC working. 

When the balcony cladding works were finished and we were handed back the balcony access, we found various issues. The AC is no longer working, the AC insulation pipe is missing, there are now multiple cracks on the balcony floor and a nut is missing from the partition glass.

We reported these issues to the Owners Corporation, but nothing has been done. We have had no communication about the dispute resolution process. What do we do now?

Answer: Approaching the builder directly might be a quicker option provided that there is enough evidence stating that the cause is from their works.

Since the builder was engaged by the Owners Corporation to carry out the cladding work, the onus is on the Owners Corporation manager to inform the builder of your concerns and request the builder to liaise with the lot owner to assess the situation and advise.

If the owner is not receiving a timely response from the manager, which seems to be the case here, then approaching the builder directly might be a quicker option provided that there is enough evidence stating that the cause is from their works. This might mean the lot owner engaging an Air-Con technician to provide an assessment/report on the condition of the Unit and what may have caused the unit to fail. The same process should apply to other damages incurred to the balcony and most importantly, the glass partition referred to in the concern, which might need to have the missing screws refitted from an OH&S requirement.

The other option would be to lodge a formal complaint with the Strata Manager by following the Consumer Affairs guidelines. Failing that, lodging the dispute at VCAT might be your last resort to resolve the issue.

Jodie Moloney
MBCM Strata Specialists
E: [email protected]
P: 1300 777 276

This post appears in the July 2022 edition of The VIC Strata Magazine.

Question: Does Sedgwick provide strata managers with a templated scope of works or support or documents to ensure the insurers are put at ease?

Answer: We use a fairly standardised layout. Most of the insurers have all seen it before.

Bruce McKenzie, Sedgwick:

As a business, how Sedgwick prepares our scope of work are relatively typical. Most of them are similar in layout and what we’re doing is providing explicit advice to a contractor on what we want them to do, right through for every stage of the work.

If we talk about cladding and most defects, when we look at the problem of cladding or a particular defect, I can assure you, when you write a scope of work, it’s not a matter of just removing that thing and replacing it. There’s always subsequent work that happens and part of what we try to do is to unpack all of that work.

If it is in a unit where we may end up having to strip plasterboard off, this might mean carpet replacement, it might mean fixing the gardens outside, because the scaffolds going to damage it. It’s all of those knock on things that we try to make sure the builder includes. The benefit of that is to try and alleviate surprise costs and variations later on, where owners certainly don’t appreciate a builder or anybody else, for that matter, turning around saying, it looks like we’ve got another $50,000 worth of cost because we didn’t realise that we had to cut up a section of driveway to do what we did.

Part of what we do is take a fairly deep dive into the whole methodology of ‘How is this going to actually occur?’ We look into things when we start to consider contractors such as, ‘How are they going to gain access to that side of the building? Are they expecting to completely block the driveway and access so no one can park for three months?’, Or ‘What considerations have they made?’, Because we work with live buildings all the time, we know the questions to ask and we already know what’s acceptable and not acceptable to most owners corporation so we will dive into that deeply and make sure a builder is realistic in the way they’re going to approach it to mitigate or reduce the impact to the occupants, particularly when they’re going to be occupying the building. That’s part of the service we provide.

Tho answer the question more directly. Yes, we use a fairly standardised layout. Most of the insurers have all seen it before. It often goes to insurance builders as well if it’s another kind of loss that we’re involved with. Floods is probably a really big one at the moment.

George Endacott:

The scope of work is a very important document. It effectively provides that conduit of written communication between the principle contract or who’s going to undertake that work, and who’s providing or where that instruction has come from. That line of communication needs to be very clear. If there’s any dispute, you’ve got that source of truth to go back to. By the time you have a signed off scope of works, everyone is on the same wavelength. Everyone knows what the expectation is, and you can use that as your conduit for proceeding.

I can’t emphasise enough that the scope of work is an integral document in the whole process. Obviously, as project managers, we would use that then as a cornerstone for how we will then support on behalf of clients the programme delivery of that project.

Bruce McKenzie
Sedgwick
E: [email protected]
P: 1300 735 720

George Endacott
Sedgwick
E: [email protected]
P: 1300 735 720

This post appears in the May 2022 edition of The VIC Strata Magazine.

Question: One wall in my unit has developed substantial cracks over the past 10 years. The owners corporation has investigated the cause but the insurance company has denied the claim. Is the OC responsible to repair any damage?

I own a unit in Victoria that has, over the past 10 years, developed cracks in the northern wall.

The owners corporation investigated the stormwater drains and found them to be blocked and overflowing. This has been repaired. They submitted a claim to the insurance company who sent out a structural engineer to investigate the problem. He did a review of the levels of the building and came back with an opinion that the wall had sunk due to the nature of the soil. He did not carry out a soil test as he said he was not authorised to do this and described the damage as “slight”.

The insurance company subsequently rejected the claim (which was for damage caused by water escaping from the stormwater drains over a period of 16 years, causing subsidence).

Is the owners corporation responsible for remedial action to repair the cracks in the outside walls even though the insurance claim has been rejected? Can I ask the owners corporation to pay for a second independent engineer’s investigative report regarding the cause of the damage?

Answer: If the cracks deteriorate further since the insurer’s engineers report, I would strongly recommend the Owners Corporations to get their own independent engineer’s investigation.

It’s difficult to know how to answer this one without looking at the insurer’s engineering report, which I assume wasn’t provided to the Owners Corporation. However, these are the guidelines taken from Guide to Standards and Tolerances 2015.

Concrete slabs: If the damage is ‘slight’ (refer to the table below) they need to be monitored for 12 months, so no sudden repairs are required.

Walls: If the damage is category 2 – Slight <5mm (refer to the table below) they need to be monitored for 12 months, so again, no sudden repairs are required.

Without looking at any drawings or the Plan of Subdivision (POS), the Owners Corporation should be responsible for periodic inspection and maintenance if the stormwater assets (drains) belong to the owners corporation.

The initial engineer should have recorded the cracks so OC can monitor them for the next 12 months. If they get bigger, then the OC can undertake a further structural inspection with a soil test.

It is the Owners Corporation’s responsibility to attend to all maintenance as per the Owners Corporation Act. All remedial action to repair the cracks in the outside walls falls with Owners Corporations.

If the cracks have deteriorated further since the insurer’s engineers report, I would strongly recommend the Owners Corporations to get their own independent engineer’s investigation done as soon as possible for peace of mind.

Paul Cummaudo
Roscon Group
E: [email protected]
P: 1800 767 266

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

Question: An owner has water on the window sill. It’s difficult to assess where the water is coming from. How do we find the source of the leak?

The owner of an apartment in a complex of 12 apartments in a classic 3 storey cream brick block of apartments in Hawthorn Victoria has water on the window sill of her apartment. The external aluminium window frames have been sealed by a plumber and it is difficult to assess where the water is coming from.

1. Is the Owners Corporation responsible to find the source of the leak or should it be the owner?
2. Who is the appropriate trade to inspect the building and find the source of the leak?

Answer: Contact a building inspection or remedial works company that uses thermography or Infrared Cameras to detect the presence of moisture and try and track the source.

If the water penetration is on the interior sill it is reasonable to assume it has entered through the window framing structure.

If there is no sign of dampness in the wall or bulkhead above the windows this will tend to confirm the source.

An initial approach could be contacting a building inspection or remedial works company that uses thermography or Infrared Cameras to detect the presence of moisture and try and track the source.

If it is only one apartment affected this is probably the best approach.

If there are multiple apartments affected it will either be a problem with the glazing framing or water ingress through flashings or joint seals on the exterior of the building.

In this case, if it is a widespread problem then a façade condition inspection or assessment by the Owners Corporation is the next option.

Again the Owners Corporation could approach a company that deals in inspections or remedial works.

If it is particularly concerning they may consider involving a structural engineering firm or consultant to diagnose and recommend a rectification process

Stephen Thornton
VOLTIN
E: [email protected]
P: 1800 865 846

This post appears in Strata News #523.

Question: I need to prove the disrepair of the gutters over the past five years has caused water damage and mould to the building. Should I get a Building Surveyors Report?

At our upcoming owners corporation meeting I need to prove the disrepair of the gutters over the past five years has caused water damage and mould to our 100 year old building.

The two upstairs unit owners claim the damage is not water damaged but has been caused by the building shifting due to its age. Should I get a Building Surveyors Report and what would the cost of the report be?

Answer: In cases like these, the best outcome will only be achieved by an independent assessment of the situation.

In cases like these, the best outcome will only be achieved by an independent assessment of the situation. There can be multiple factors contributing to building degradation and deterioration, particularly where water leaks exist. An expert, with fresh eyes to the building can consider all factors and provide a solution to the owners which is in their best interest.

34% of all property insurance claims are related to water damage according to Chubb. Owners of the property should invest money to their maintenance fund so issues like these can be addressed right away. We have seen many older buildings, where a maintenance plan is not implemented, have compounding problems that become very costly and eventually daunting for owners.

Maintaining the drainage assets around the property are one of the most important considerations. Neglect for site drainage and stormwater pipes around the buildings footings causes the soil to shrink and swell, causing heave and movement to the building, and subsequent cracks. Regular maintenance of gutters and downpipes also reduces premature corrosion, as well as the chance of blockages. Adding gutter cleaning to routine maintenance is something owners should consider.

If the committee is having troubles deciding on the best course of action, we would strongly recommend engaging an expert. A water leak investigation including water testing, or structural engineering report to look into the building movement and cracking, can cost between $3,500 and $5,500. But this is money well spent when a misdiagnosis can be frustrating, and neglect will result in costly repair bills.

Sahil Bhasin
Roscon Group
E: [email protected]
P: 1800 767 266

This post appears in the November 2020 edition of The VIC Strata Magazine.

Question: My balcony’s waterproofing was tested and I received advice that I would have to replace the membrane on the entire balcony (cost of $80 000+). What options do I have?

On my apartment’s building level is a large common area balcony. My apartment borders onto this balcony and the identical apartments above have views over the common balcony and into the distance. Obviously as my apartment is on the same level as the common balcony there is a fence for privacy, that also blocks my views. As I still have windows on that side, the fence is set back from them, resulting in a section of the common balcony fenced off “privately” for my apartment. (Overlooked from the apartments above).

The OC had the common balcony’s waterproofing tested and received advice that the membrane should be replaced on the entire balcony, even though no incidents had occurred.

The OC is splitting the cost of this over the OC and me. I would be required to pay $80,000+, an amount that would require me to get a bank loan or sell my apartment and move out.

The advice the OC received was that the membrane was not properly set up during the building’s construction, over a decade before.

If this work is done, it will not make my apartment more waterproof, only the apartments below the balcony, but they’re not being asked to pay anything. None of the other balconies in the building, large or small, are being replaced.

What options do I have? It’s not like I have something damaged on my property, the OC is wanting to replace a substandard part of the building that extends under my property.

Answer: We would recommend contacting a specialised Victorian Owners Corporation Lawyer and confirming the boundaries of your lot.

After reading your question, our understanding is that you have an apartment (without a balcony) that is attached to the common property balcony and the membrane has failed and needs to be replaced on that common property balcony.

Unfortunately without a plan of subdivision we are unable to provide any further information on the layout of your building or on the boundaries of your lot.

However we would recommend contacting a specialised Victorian Owners Corporation Lawyer and confirming the boundaries of your lot and then this will then determine whether the matter in question is related to just the common property.

If it is just the common property then you would not be required to pay for an extra amount as an individual lot owner, as the cost would need to be borne by all of the owners corporation. You may have to contribute to the special fee if there is one raised by the OC for the common property works though.

We hope this is helpful and wish you luck with the matter.

Jane Giacobbe
Strata Reports Victoria & NSW
E: [email protected]
P: 0402 341 848

This post appears in Strata News #389.

Question: We have a number of strata building defect issues with the building and the builder now refuses to carry out any more work. We are communicating through his solicitor, but still, nothing gets done. Where do we go from here?

We are lot owners in a 9 apartment, two story building completed in August 2015.

We have a number of strata building defect issues with the building and the builder now refuses to carry out any more work. We are communicating through his solicitor, but still, nothing gets done.

A number of issues centre around failure to adhere to Australian Building Codes which have resulted in water leaks and fire protection failures. Two years into occupancy a fire protection audit found that the basement garage did not comply with fire protection regulations in a number of serious areas.

This has since been rectified with months of disruption. There are serious concerns with regards to correct waterproofing of external first-floor balconies with the tiles ripped up and replaced 3 months into occupancy with no explanation.

Subsequently, one apartment was badly water damaged from a balcony leak and had to be tiled again. Another apartment still has rainwater coming out of a smoke detector hole and the builder has given up on fixing the problem.

We are now preparing a strata building defect case for VCAT and would appreciate your comment on the following:

The motor unit fitted as new to the double width garage door, according to the distributor, is a domestic model, out of production for 12 years (no spare parts available) and deemed not suitable for the purpose of apartment use. We had a problem with it in the first year and the installer carried out a dodgy quick fix repair which leaves the unit basically unfit for purpose. Again, the builder continually refused to deal with the issue.

Are we entitled to a replacement of the unit?

The air-conditioner units for some apartments are on the roof along with all the motor units for the emergency extractors for the garage. However, there is no access to the roof area from within the building and external access can only be made by access from within the apartment lots.

What problems could we face here when it comes to carrying out required maintenance on the units? Should a common area access have been featured in the building?

Answer: Due to the extent of the strata building defect problems you are experiencing I would recommend the engagement of a building consultant to conduct a detailed defect report.

Due to the extent of the problems you are experiencing I would recommend the engagement of a building consultant to conduct a detailed defect report. This should be done prior to the expiration of the building warranty period which is usually a 12 month for builders rectification period. However, under the Domestic Constructions Contracts Act there remains a warranty period that extends to 10 years for major building defects. Water ingress is considered to be fairly major.

This report should identify any breaches of the building code and also those items not fit for purpose, such as the garage door motor. This use of domestic actuators for multi-unit developments a very common issue in cost savings in construction with the owners inheriting the issue of replacing this in the very near future as the operation of these in a multi-unit development wears the drive units out very quickly.

On the completion of the report wherein the consultant has identified the defects including items not fit for purpose this should be initially lodged with the builder. Once this is registered then the matter may require the engagement of a suitably qualified/experienced legal representative but the builder must address the items listed.

In regards the matter of the air conditioning units on the roof there is a very good legal precedence from a Supreme Court ruling wherein it is mandatory that access be made available to service common facilities and it cannot be via another lot. It follows that a means to access the service area on the roof must be provided via an avenue other than through private property of another owner.

Stuart Mellington,
Select OwnersCorp Management
E: [email protected]

This post appears in Strata News #208.

Read Next:

• VIC: Q&A Damage caused by a water leak from balcony above
• VIC: Q&A What’s Common Property and Who’s Responsible for Repairs?

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