NSW: Q&A Remediation of Serious Building Defect

These Q&As are about major rectification work and lack of waterproofing in NSW strata buildings and what you may be able to do to manage and rectify strata building defects.

Table of Contents:

• QUESTION: My unit door has been replaced twice over the last few months with non compliant doors. How do I ensure the correct door is installed at the cost of the owners corporation?
• QUESTION: In NSW, are courtyards the responsibility of lot owners, including the way the courtyard drains and manages stormwater?
• QUESTION: Structural engineers have advised waterproofing and replacing all doors and windows due to water egress issues. Can the existing, well-maintained doors and windows from 2005 be reused, saving a substantial sum and reducing environmental impact?
• QUESTION: Who would be responsible for installing waterproofing if the building didn’t have original waterproofing in the shower recess and water leaked into the lower unit?
• QUESTION: If the owners corporation is aware the waterproofing membrane is comprised, is it their obligation to have the membrane fixed even if a special levy is required?
• QUESTION: In our lot, the grouting between some original tiles is loosening, causing drummy tiles and some tiles have cracked. Is the owners corporation responsible for the rectification of this defect?
• QUESTION: Is the owners corporation responsible every time the waterproofing fails for the life of the premises, or just for the original waterproofing membrane?
• QUESTION: It was agreed to obtain quotes to remove mould from a wall and repaint. Quotes have come back for repainting a large area of the building in a new colour. Do we need a special resolution to proceed?
• QUESTION: Concrete pieces have been falling off my balcony. The committee confirm the balcony is common property, but repairs still have not been arranged. What happens now?
• QUESTION: What role do Executive Committee members play when dealing with major building defects?
• QUESTION: What options do owners corporations have to hold builders or certifiers responsible for what transpires, over time, to be non compliant waterproofing? We’re in the $100s of $1000s repairing waterproofing to courtyards, terraces and driveways. It’s incredibly unfair to owners.
• QUESTION: My apartment has been unoccupied for 6 months due to water leaks and damage caused by remedial work to fix water issues in the building. No work has yet started to fix leaks or damage. What can we do now?
• QUESTION: A poorly constructed box gutter channels rainwater into our apartment. We’ve been requesting help from the owners corporation for years, but they keep pushing us aside. What do we do?
• QUESTION: During the application of a new waterproofing system on the roof of our multi-storey block, heavy rain caused major damage to the building. The contractor seems to have given no regard to weather forecast. Are they responsible for the extensive damage to the building?
• QUESTION: Repair of a major leak uncovered a major magnesite defect and leak. The committee is slow to respond to repairs. How can I get a response?
• QUESTION: Lot owners have reported calcification or efflorescence of balcony floor tiles and have asked who is responsible for the cost to rectify the problem.
• QUESTION: If magnesite has been found in an apartment, should the owners corporation check all the other units within the building?
• QUESTION: The local council issued an unsatisfactory notice to the strata management on our building in 2017. What implications does the outstanding notice have on a lot owner’s intention to sell?
• QUESTION: Who is responsible for rectifying the building defect in our shower. Unit Owner or Owners Corporation?
• QUESTION: We have court action against the developer for building defects. The developer and his family members are lot owners in the building. How do we limit his influence on the vote about the defect report and proposed special levy?
• QUESTION: The Owners Corporation has failed to carry out necessary maintenance on the building for several years. Our unit is no longer fit for habitation and our tenants had to move out. What can we do?
• QUESTION: We have found after 7 years a balcony overhead structure was built poorly and is failing. Should I be able to ask the insurer if the defect is covered by building insurance?
• QUESTION: What happens if builder is insolvent?
• QUESTION: Who is responsible for paying for the remediation of a Serious building defect in an older building that was developed and remodelled by a single owner/developer and then converted to 4 separate strata lots?
• QUESTION: Our building needs major rectification work costing $2,000,000 due to 20 years of defects which have never been addressed. Can we sue the strata manager of 20 years tenure for failing to not insist the strata committee address the maintenance of the building?

Question: My unit door has been replaced twice over the last few months with non compliant doors. How do I ensure the correct door is installed at the cost of the owners corporation?

My owners corporation has replaced my unit entrance door twice over the last few months.

The original 45 mm door required replacement. A 35mm door was installed. That was replaced with the correct 45mm door, but 15mm was cut off the bottom of the door which has voided the manufacturer’s warranty because it exposed the core of the door.

My owners corporation is aware of the error, but is not interested in rectifying the mistake. How do I ensure the correct door is installed at the cost of the owners corporation?

Answer: The state of your door renders the owners corporation in breach of their statutory duties.

The front entry door is common property (subject to any by-laws to the contrary) and therefore the responsibility of the owners corporation. The owners corporation must keep the common property in a state of good and serviceable repair and, it would appear, the state of your door renders the owners corporation in breach of their statutory duties.

The door might pose fire safety issues. You should write to your strata manager (if you have one) or place a motion on an agenda of the owners corporation to immediately rectify the front door situation.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #669.

Question: In NSW, are courtyards the responsibility of lot owners, including the way the courtyard drains and manages stormwater?

Our strata plan stratum statement says ‘Courtyards are limited to five below’.

2022 was the wettest year on record for many areas. Some of our courtyards experienced water ponding.

In NSW, are courtyards the responsibility of lot owners, including the way the courtyard drains and manages stormwater?

Answer: There is no hard and fast rule regarding whether courtyards are a lot or common property.

This is a complex issue. While the strata plan notation appears to override the ordinary notions of a lot and common property, the notation itself will need to be examined more closely (e.g., usually, there would be a reference point from where the five metres begins). There is no hard and fast rule as to whether courtyards are lot or common property, but generally (subject to the by-laws applicable to your scheme and your strata notations), owners often only own from the upper surface of the pavers to a specified height (cubic space) in which case the pavers and drainage beneath would be owners corporation’s responsibility (which may not be the intention here).

Further, it is unclear whether your scheme has adopted the Common Property Memorandum, which further impacts the determination of who is responsible for the courtyard/pooling/drainage.

We recommend obtaining expert strata advice from a lawyer who will review all the necessary documentation in totality (e.g. notation, strata plan, applicable by-laws, and all relevant legislation/regulations).

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #669.

Question: Structural engineers have advised waterproofing and replacing all doors and windows due to water egress issues. Can the existing, well-maintained doors and windows from 2005 be reused, saving a substantial sum and reducing environmental impact?

We have water egress in parts of our 29 unit complex. Structural engineers have recommended replacing all tiles on our balconies. Also, all doors and windows need waterproofing and will require replacement as the current doors and windows do not meet Australian Standards.
The units were built in 2005 and met all standards at that time. All current windows and doors are in excellent condition. Can they be reused if a certifier gives the go-ahead? This will save us hundreds of thousands of dollars apart from the enormous water and environmental impact.

Answer: If building elements are failing or existing construction details don’t meet the required performance standards, upgrades need to be completed in accordance with current codes and standards.

Your Engineers advice is in line with best practice and is consistent with our experience working with specialist remedial engineering firms in the Class 2 Remedial Building sector.

Regardless of when your building was built, if there are building elements that are failing or existing construction details that don’t meet the required performance standards to be effective, then any upgrades need to be completed in accordance with current codes and standards.

Regarding the existing windows and doors, ultimately, certification of these existing building elements will lie with the contractor undertaking the works, not a certifier. Furthermore, most, if not all, contractors would be unwilling to certify an existing system as it would be too risky to accept that they meet the current performance standards. As contractors and design consultants are indemnifying the work they are undertaking and their licenses and accreditations are at stake, they understandably will be conservative in their approach and unwilling to take risks by approving the reinstallation of an existing window or door system that may not be able to meet the current performance standards.

We highly recommend you take the advice of your engineers as they are likely providing the owners corporation with a remedial scope that is fit-for-purpose and will mitigate the potential risk for future leaks in your building.

Michael Hopwood
Valen Projects
E: [email protected]
P: 0488 666 682

This post appears in the October 2023 edition of The NSW Strata Magazine.

Question: Who would be responsible for installing waterproofing if the building didn’t have original waterproofing in the shower recess and water leaked into the lower unit?

Our shower recess is leaking water into the unit below. According to the strata committee and agent, the building did not have waterproofing when it was constructed. If the show recess was constructed without waterproofing, who would be responsible for repairing the defect when water leaked into the lower unit?

Answer: The responsibility for the repair will depend on the source of the dripping water.

This will largely depend on the source of the dripping water. You would need to determine the leak’s source, location and cause. This will affect who is responsible. At that point, a determination would be made if it is the owners corporation’s responsibility pursuant to section 106 of the Strata Schemes Management Act 2015 (“the Act”). I recommend an experienced waterproofing consultant attend and prepare a short report.

Section 106 of the Act primarily the following sections are of applicability here:

1. An owners corporation for a strata scheme 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.
2. An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation.

Pierrette Khoury
Khoury Lawyers
E: [email protected]
P: 0415 459 486

This post appears in the August 2023 edition of The NSW Strata Magazine.

Question: If the owners corporation is aware the waterproofing membrane is comprised, is it their obligation to have the membrane fixed even if a special levy is required?

Our balcony is leaking into the garage. A building report confirms the waterproofing membrane on the balcony is comprised.

We have been quoted approx $8k to fix everything, including the waterproofing membrane. To save on costs, the owners corporation is considering putting in larger drainage pipes and sealing the perimeter of the balcony.

If the owners corporation is aware the waterproofing membrane is comprised, is it their obligation to have the membrane fixed even if a special levy is required?

Answer: The owners corporation has a responsibility to repair and maintain common property. Where the owners corporation are aware of a defective or failed building element, they are expected to undertake repairs/upgrade in a timely manner.

Under the Strata Schemes Management Act 2015 Division 2, 9 (3) (c), the owners corporation has a responsibility to repair and maintain common property. The expectation is that where the owners corporation are aware of a defective or failed building element, they will undertake repairs/upgrade in a timely manner. Action will also be determined by the severity of the defect and the impact on other building elements and/or residents.

In this example, without knowing the specifics of the site and assuming the identified failed membrane and water ingress is not causing other building elements to deteriorate and fail, in the immediate future we recommend the owners corporation take the following steps in line with the requirements under the Residential Apartment Buildings Act 2020 and Design & Building Practitioners Act 2020 (DBP Act) and best practice:

1. Engage the services of a suitably qualified, experienced and Class 2 Registered Design Practitioner to inspect the defects and provide a detailed report and remedial scope of works.
2. Engage the services of a suitably qualified, experienced, and independent Client-side Project Manager to coordinate competitive tender pricing from Class 2 Registered Building Practitioners for the remedial building works.
3. Review the detailed Tender Assessment and Contractor Recommendation, and with the assistance of the Project Manager, undertake cost planning to determine how the project will be funded (existing funds, special levies, strata loan).
4. Determine a suitable target date to undertake the works and execute cost planning.

Given it is noted the owners corporation are already aware the waterproofing membrane has failed, the proposed solutions in the example, such as “installation of larger drainage pipes and sealing the perimeter” will not be an effective solution to rectify the defects permanently. When considered in isolation, these actions are not in line with the requirements for rectification of waterproofing systems in accordance with compliant regulated design under the DBP Act.

The owners corporation are required to engage the relevant expert consultant designer to develop a scope for remediation. These designs must be in accordance with the requirements of the DBP Act. The cost of remediation works are not considered relevant under the Strata Schemes Management Act 2015 Division 2, 9 (3) (c), and the requirements to complete works in accordance with the DBP Act are mandatory, unless the work falls within the very strict definition of exempt works, which external and common property waterproofing is not.

Michael Hopwood
Valen Projects
E: [email protected]
P: 0488 666 682

This post appears in the June 2023 edition of The NSW Strata Magazine.

Question: In our lot, the grouting between some original tiles is loosening, causing drummy tiles and some tiles have cracked. Is the owners corporation responsible for the rectification of this defect?

I own the middle lot of 3 townhouses built in 1999. All townhouses sit on one ground level slab.

Two of the three lots have noticed grouting in the original tiles loosening and coming out. The loosening grout is causing drummy tiles and some tiles have cracked.

A tiler inspected the issue and reported, ‘the issue was caused by the original tiler laying the tiles before the waterproofing was dry’.

In our lot, the problem is limited to the kitchen. The rest of our townhouse is carpet, however, the other lot has tiles throughout. The owners of the fully tiled lot expect the owners corporation to re-tile the whole townhouse. To what extent is the owners corporation responsible for the rectification of this defect?

Answer: If very similar tiles cannot be sourced, the owners corporation may need to re-tile the whole tiled area.

There is a strata titles case which states that the duty of the owners corporation to repair tiles, in a context similar to this, was either to match new tiles as closely as possible in appearance and value to the existing tiles so as not to detract from the appearance or value of the lot OR if very similar tiles cannot be sourced, the owners corporation would have to re-tile the whole tiled area.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in the April 2023 edition of The NSW Strata Magazine.

Question: Is the owners corporation responsible every time the waterproofing fails for the life of the premises, or just for the original waterproofing membrane?

We are a group of 3 townhouses. In 2015, a lot’s waterproofing membrane in the upstairs bathroom failed and created a leak into the ceiling of their downstairs lounge and garage. The owners corporation repaired the ceiling, and replaced the shower recess, waterproofing and tiles.

The same problem occurred late last year, resulting in even more extensive damage to the unit.

Is the owners corporation responsible every time the waterproofing fails for the life of the premises, or just for the original waterproofing membrane?

Answer: Obtain a report to determine the source of the leak.

The answer will depend on the location of the source of the leak. I recommend obtaining a report.

The owners corporation has a strict obligation to properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation in accordance with section 106 of the Strata Schemes Management Act 2015.

Section 106 also includes a provision that the above does not apply to a particular item of property if the owners corporation determines by special resolution that–

1. it is inappropriate to maintain, renew, replace or repair the property, and
2. its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.

However, to rely on the above, you need to assess whether it is inappropriate to maintain, renew, replace or repair the property and to determine the decision will not affect the safety of the building, structure or common property in the strata scheme.

I recommend a report is obtained at first instance to determine the source of the leak. Also, has that lot owner carried out any renovations or works since the initial repair? Determining whether this has occurred will also assist in making a determination as to whether that has now contributed to the present problem.

Pierrette Khoury
Khoury Lawyers
E: [email protected]
P: 0415 459 486

This post appears in the March 2023 edition of The NSW Strata Magazine.

Question: It was agreed to obtain quotes to remove mould from a wall and repaint. Quotes have come back for repainting a large area of the building in a new colour. Do we need a special resolution to proceed?

Two lots in our small strata scheme had mould on the external walls at the back of the building. It was agreed to obtain quotes to treat the mould and repaint the surfaces of the external back wall. Quotes have been submitted for the painting of the entire downstairs external walls, all eaves, and all doors including garage doors.

There does not appear to be any damage to the downstairs apart from the mouldy back wall. Owners want to change the colour as well. As the scope has changed quite a bit from the work originally agreed upon, would this now require a special resolution?

Answer: The scope of work appears to be far broader than a strict repair and would likely be categorised as improvements. For that, a special resolution is required.

No special resolution is required if the Owners Corporation is exercising its repair and maintenance function, even if superior materials are used or colours are changed. However, the scope of work you refer to appears to be far broader than a strict repair and would likely be categorised as improvements/enhancements. For that, a special resolution is required.

Further, the cause of mould should also be determined so that the Owners Corporation can establish if it is a repair they are required to address.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in the February 2023 edition of The NSW Strata Magazine.

Question: Concrete pieces have been falling off my balcony. The committee confirm the balcony is common property, but repairs still have not been arranged. What happens now?

Our building was built before 1974. Concrete pieces have been falling off my balcony slab over the past six months. After I reported this damage to the strata manager, the strata committee confirmed that the balcony was common property but accused me of not maintaining the balcony, resulting in the degradation of the concrete.

I’ve since found 2 other balconies in our building with the same problem. I reported this to the strata manager and an engineering inspection was arranged. Over the past few months I’ve contacted the strata manager each fortnight, but just get told the strata committee is collecting quotes and to be patient. What should I do now?

Answer: If there are continuing delays you can look at applying to NSW Fair Trading to proceed to mediation and seek a resolution.

If the balcony is taken to be part of the common property (and there are no other factors such as an exclusive use by-law applying to your lot) then it is the responsibility of the Owners Corporation. I recommend following up however, if there are continuing delays you can look at applying to NSW Fair Trading to proceed to mediation and seek a resolution and a way forward to having the repairs attended to in a timely manner.

In the event no resolution is achieved through this process, your next avenue of recourse would be to apply to the NSW Civil and Administrative Tribunal to obtain an order.

Pierrette Khoury
Khoury Lawyers
E: [email protected]
P: 0415 459 486

This post appears in Strata News #615.

Question: What role do Executive Committee members play when dealing with major building defects?

What stress are the Executive Committee under to get through the initial stages of the major defects process and do different EC members have different risk profiles?

Answer: Usually, an organised Executive Committee would establish a subcommittee that reports to the executive committee.

Unfortunately, this process involves a lot of work by at least one member of the EC and usually, an organised Executive Committee would establish a subcommittee that reports to the executive committee. That subcommittee then kind of does the everyday work in terms of liaising with the building consultant who’s acting for the owners corporation, looking to see what’s going on, who’s on-site and when things are scheduled to happen. This absorbs a lot of time and that’s why someone like a recent retiree is the ideal person to deal with these things.

Christopher Kerin
Kerin Benson Lawyers
E: [email protected]
P: 02 8706 7060

This post appears in Strata News #608.

Question: What options do owners corporations have to hold builders or certifiers responsible for what transpires, over time, to be non compliant waterproofing? We’re in the $100s of $1000s repairing waterproofing to courtyards, terraces and driveways. It’s incredibly unfair to owners.

Answer: An excuse from a builder or developers simply not returning because they don’t want to does not wash anymore.

There are a couple of new acts that have been introduced. The Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 is one in particular where there is accountability for builders and developers to return to remedy historical problems on buildings.

That act has been introduced specifically for this and there certainly is an opportunity for owners to pursue down that pathway. It’s something that, I would say, is relatively new in the industry. It hasn’t been tested to its full extent yet but it’s getting pushed quite hard at the moment to start getting some traction and utilising the mechanisms that are within that act to get some sort of response out of builders.

An excuse from a builder or developers simply not returning because they don’t want to does not wash anymore. It’s not good enough and there are some significant ramifications if they don’t, including deregistration. The Act is a law so there is a requirement now. I would be looking towards leveraging off that.

These are things we could assist with because that’s something we do, we are starting to utilise a bit more now. I would certainly encourage any owner to explore that and exhaust every single opportunity to try and get some sort of recourse back.

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

This post appears in the September 2022 edition of The NSW Strata Magazine.

Question: My apartment has been unoccupied for 6 months due to water leaks and damage caused by remedial work to fix water issues in the building. No work has yet started to fix leaks or damage. What can we do now?

My apartment has been unoccupied for 6 months due to water leaks and damage caused by remedial work to fix water issues in the building. No work has yet started to fix leaks or damage so it can be sold.

Our Strata just keeps feeding us excuses and they have no clear start date for repair work to begin. We changed strata management companies around 4 years ago specifically to fix the issues but not much has been done since. What can I do? We’ve been out of pocket for six months now with no end in sight.

Answer: If there has been action taken, the Owners Corporation may defer its compliance with its maintenance and repair obligations until this has been completed.

I would bring this to the attention of your strata manager. The owners corporation is obliged to comply with its statutory obligation regarding repair.

1. An owners corporation for a strata scheme 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.
2. An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation.

However, subsection 4 provides:

4. If an owners corporation has taken action against an owner or other person in respect of damage to the common property, it may defer compliance with subsection (1) or (2) in relation to the damage to the property until the completion of the action if the failure to comply will not affect the safety of any building, structure or common property in the strata scheme.

If there has been action taken, the Owners Corporation may defer its compliance with its maintenance and repair obligations until this has been completed.

If the above is not applicable you may have an action, however, I would need to see further documentation to determine the appropriate cause of action.

Pierrette Khoury
Khoury Lawyers
E: [email protected]
P: 0415 459 486

This post appears in Strata News #581.

Question: A poorly constructed box gutter channels rainwater into our apartment. We’ve been requesting help from the owners corporation for years, but they keep pushing us aside. What do we do?

We have a rooftop on our apartment that runs parallel with a poorly constructed box gutter. This box gutter has water runoff from other apartments

When it rains, water waste runs onto our deck and down the spiral staircase onto our front foyer. We have to broom the water out through our entrance door.

I have been asking Strata Management and the committee for help for years however they keep pushing the water issue aside. Where is the next step to resolve this matter?

Answer: issue a formal letter of demand that the Owners Corporation take action to rectify the water issue.

This raises a number of issues including:

• The Owners Corporation’s duties to repair & maintain the common property and their ongoing refusal to do so
• Risk of personal injury and potential impact on the Owners Corporation’s insurance
• Nuisance and hazard

The Owners Corporation has a strict duty to repair & maintain the common property and is liable to compensate an affected owner for any reasonably foreseeable loss suffered due to breach of that statutory duty.

We recommend you issue a formal letter of demand that the Owners Corporation take action (it may be that they need to investigate the cause) to rectify the water pooling and failing which, you will commence action through NCAT (which requires attempted mediation first).

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #577.

Question: During the application of a new waterproofing system on the roof of our multi-storey block, heavy rain caused major damage to the building. The contractor seems to have given no regard to weather forecast. Are they responsible for the extensive damage to the building?

Our OC engaged a contractor to redo the waterproofing system on the roof of our multi-storey block.

Unfortunately, within hours of the old torched-on membrane being removed the rain began.

Water quickly penetrated through the old screed and roof slab into the units below causing significant water damage to ceilings, cornices, walls, carpets, bedding, paintings and some appliances.

No regard seemed to have been given to the weather forecast. There was no effective drainage. No temporary waterproofing was applied after the old membrane was removed. No warning was given to residents below of the possibility of water ingress.

So who is responsible for the damage to the lot property? Is the contractor responsible? Would the contractor’s HBCF insurance policy cover the repairs?

Would the OC be able to claim on its strata insurance?

Answer: You will need to refer to the signed contract between the owner’s corporation and the contractor.

To determine who is responsible for the damage, you will need to refer to the signed contract between the owner’s corporation and the contractor. In this contract it should outline:

• Who is responsible for any damage whilst the works are being done?
• What limit if any the contractor will have regarding any damage whilst the work is being done.
• Is the contractor required to hold insurance coverage? If yes, what level of coverage is afforded.
• Are they required to insure the existing building under their policy or just the works being done?
• Did the owner’s corporation obtain copies of the contractor’s insurance?
• What steps are taken to protect the property whilst the works are being done?

Ideally when a contractor completes any work, they should be responsible for any damage caused by them. It would be prudent to ask them to provide evidence of what steps they took to protect the property from the weather events.

If the builder is not willing to assist with the damage which resulted from the works they were doing, the owners corporation can lodge a claim with their insurer for their consideration. The above information would need to be determined and provided to the insurer.

However, a strata insurance policy has a limit that applies when any works are being done at the property. This limit will determine if the owner’s corporation are required to notify the insurer prior to the works being done for the insurer to continue insuring the building during the works period.

With relation to the HBCF insurance, this will only respond if the company is no longer in business, untraceable or has died.

Chantell Kennebury
Sedgwick
P: 08 9210 9103
E: [email protected]

This post appears in Strata News #571.

Question: Repair of a major leak uncovered a major magnesite defect and leak. The committee is slow to respond to repairs. How can I get a response?

Our Strata Committee recently fixed a major kitchen pipe leak in our 1960’s building by replacing the whole pipe.

The leak caused an area of magnesite screed on the concrete slab to become saturated. It dripped in the Lot below.

I have asked the Strata Committee to assess potential water damage to the magnesite and claim this on the strata insurance, if applicable. I am concerned we may be exposed to long-term concrete spalling.

My emails are ignored by the strata manager and the Secretary of the Strata Committee. What can I do? The leak was fixed 3 months ago. How do I get a response and make sure an assessment is organised?

How are other strata committees in NSW dealing with similar plumbing leaks? Is awareness of magnesite induced spalling increasing? Is it becoming standard practice to assess magnesite whenever there is a major leak?

Answer: Encouraging the OC to be proactive rather than reactive with maintenance is an issue to be tackled at an AGM.

The pipe has been replaced, this is good. Leaking and therefore moisture has also stopped. Assuming that we are not discussing a leak that was present for years, this is what the OC were required to do.

Providing that the floor and magnesite was dried quickly and thoroughly, and assuming we are not discussing an extreme long term leak, then there will be no resultant spalling. The OC is also responsible for damage to the ceiling in the lot below (but not necessarily the painting).

Noting that most strata policies available today will respond to the event (in various degrees), most will cover damage to the magnesite (if any) and damage to the ceiling below (if any). The degrees around further response is governed by what is damaged.

For example:

1. most insurers will cover the drying of the floor to ensure there is no long term resulting magnesite damage
2. Some will cover searching for the pipe and
3. Some will cover some level of the pipe repair

These items all vary between insurers. You will also note that in a 1960’s building, the OC may have opted for or accepted a higher Water/pipe excess which could effectively mean self-insurance on all of the above.

It is also possible that if there is / was no damage to the ‘building’ then the mitigation would fall to the lot owner and their contents insurer.

While I am unsure if the writer is the lot with the magnesite floor or the potentially damaged ceiling, or just a concerned owner, part of this question is the same response.

The Strata manager works for and is engaged by the OC. Each member has the right to view all records. Simply advise them that you wish to view the records and book a date to do so.

Having said that, if the lot owner themselves were responsible for the work / repairs and or mitigation (that is, there was no building damage), then other than the pipe repair there will be no further information.

Encouraging the OC to be proactive rather than reactive with maintenance is an issue to be tackled at an AGM. Simply add it to the agenda for the next AGM. This is the correct procedure. Please see previous information about magnesite and concrete spalling if more information is required.

Scott Driscoll
Sedgwick Building Consultancy division
E: [email protected]
P: 0409 632 003

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

Question: Lot owners have reported calcification or efflorescence of balcony floor tiles and have asked who is responsible for the cost to rectify the problem.

A number of owners have reported calcification or efflorescence occurring on the floor tiles of balconies and have raised the question as to which party is responsible for the cost to rectify the problem.

An expert advised that this calcification can potentially result in more serious damage to the waterproof membrane through water ingress if left unresolved. This could turn out to be more costly than treating the less major issue of the surface calcification.

Is it the responsibility of the Owners Corporation to rectify and remove the calcification or is it up to the individual apartment owners?

Answer: Generally speaking, maintenance is the responsibility of the Lot Owner (or Owners Corporation for common areas).

Efflorescence is an unfortunate byproduct as a result of the materials used in many building products and has spawned a whole product sector attempting to deal with it. Tile bedding or screed is particularly susceptible where moisture is able to interact with this material. Firstly, it is important to understand there are different types of efflorescence and the mechanism in which they occur slightly varies.

1. Primary Efflorescence – occurs after the product containing soluble salts is installed (concrete, tiles screeds, cementitious grouts). This is usually minor and easy to clean away and not normally considered a defect or indicative of an underlying problem.
2. Secondary Efflorescence – occurs when water penetrates the materials, interacts with the soluble salts and then is drawn or tracks to the surface to evaporate leaving the salt deposits. This is usually easy to clean away when done shortly after appearance. If left for prolonged periods, it can become almost impossible to effectively remove from the surface it has collected on.

Secondary Efflorescence can be an indication of an underlying issue, such as a lack of falls of the membrane (water accumulating in a tiling screed). However, resident actions can contribute to and make this issue worse. Overwatering plants or excessive use of water when cleaning or even excessive cleaning can introduce water that otherwise would not be present to cause the observable after effect.

Generally speaking, maintenance is the responsibility of the Lot Owner (or Owners Corporation for common areas). Excessive efflorescence is usually an indication of a design and/or construction issue. Unfortunately, it is not possible to confirm without destructive investigations. There are minimal long-term solutions to address excessive efflorescence without undertaking more significant works.

Ian Martyn
CORE Project Consulting Pty Ltd
E: [email protected]
P: 02 8961 3250

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

Question: If magnesite has been found in an apartment, should the owners corporation check all the other units within the building?

If concrete cancer damage from magnesite has been found in an apartment, is it the strata/owners corporation’s responsibility to get an expert to check all the other units within the building? If the answer is yes, is there a particular type of inspection required or outlined in a building standard or DFT act?

Answer: As magnesite contains the presence of asbestos Owners Corporations in NSW should consider the WHS 2011 legislation and relevant Asbestos Handling Standards.

As with each individual situation, independent expertise should be sort to fully understand the complexities of the Strata Plan and individual situations relating to the above question. There are many factors to consider. Below we address the various elements of the question/s raised.

The Owners Corporation is responsible for maintaining and repairing the common property. SSMA Section 9 (3) (c). having and keeping up to date the maintenance schedule Sections 15 & 16. There is also Section 80 which requires the establishment of and maintaining of 10 Year Capital Works Fund.

Regarding the concrete cancer damage, the magnesite floor and reinforcement failure would be unrelated.

For reinforcement to corrode it needs at least two factors – moisture and oxygen. For this to occur in a non-marine environment there must be a trigger, i.e., cracked concrete, open or unsealed control joint or inadequate concrete cover to the rebar.

Point being, it’s not a perfect science and each case will have its own set of circumstances and repair method.

The most suitable skill set to complete an initial inspection would be an experienced Forensic Building Consultant. This way, they can make decisions of next actions, i.e., waterproof integrity issue would go down a different path to a corroded reinforcing path and these would be different again to any magnesite flooring failure.

If you try and get too specialised up front e.g. An Engineer and it’s discovered to be a symptom or influence outside their area of expertise, you can get the investigation off on the wrong foot.

Regarding if the Strata/Owners corporation is required to have an expert check all the other units within the building? Again, this is not a straightforward matter, however there is no requirement to ‘simply check the other floors’ just because one unit has concrete cancer, however as magnesite contains the presence of asbestos Owners Corporations in NSW should consider the WHS 2011 legislation and relevant Asbestos Handling Standards.

Magnesite flooring is water-soluble and consists of white asbestos that can return to an unbonded state should it be exposed to enough water. For this reason, checking the magnesite would be a good idea. Additionally, Owners Corporations not required to have annual inspections under WHS 2011 should, at the very least, have it included in the 10-year Capital Works Fund.

Additionally, where asbestos remains bonded the current laws allow the material to stay in-situ and should not be disturbed.

Sedgwick highly recommends seeking independent advice as mentioned above regarding each individual situation. This information is not intended to be used as factual and legal advice for any given situation.

James McIntosh
Sedgwick Building Consultancy division
E: [email protected]
P: 0415 459 486

This post appears in the September 2021 edition of The NSW Strata Magazine.

Question: The local council issued an unsatisfactory notice to the strata management on our building in 2017. What implications does the outstanding notice have on a lot owner’s intention to sell?

The local council issued an unsatisfactory notice in September 2017 to the strata management. There were two matters that needed their urgent attention. One matter has been addressed the other not which would mean the unsatisfactory notice has not been resolved.

What implications does the outstanding notice have on a lot owner’s intention to sell?

Answer: Buyers will be nervous about buying into a building with unresolved issues.

It’s a bit difficult to provide specific feedback without knowing more about the unresolved issue but I can make a few general comments.

Buyers will be nervous about buying into a building with unresolved issues. If there are explainable reasons for the delays in getting the issue resolved then a buyer might accept the risk. However, if the issue has remained unresolved because of inaction by the strata manager or the owners, or because the issue is complex and there are unresolved defects at the property, then buyers might not be prepared to buy the property, or might seek a reduced price to offset the risk.

As these matters have been outstanding since 2017, it seems far too long if the issues are straightforward and most buyers would be nervous about this situation. Ultimately any buyer has to accept the risk associated with the unresolved issue and realise that they may have to pay their share of costs to resolve it, assuming that insurances or the original builder/developer do not cover these costs.

Michael Ferrier
Eyeon Property Inspections
E: [email protected]
P: 02 9260 5510

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

Question: Who is responsible for rectifying the building defect in our shower. Unit Owner or Owners Corporation?

We live in a strata complex. The complex is 20 years old. We have detected a defect in the shower floor structure as it wasn’t built to the standards. It doesn’t have the required length of drain to allow for water to drain properly which has caused other issues in the shower as well.

We have a tile by law in our complex which states that ‘ The proprietor of a lot is granted exclusive rights of usage of floor and wall tiles forming the boundary of the lot in the bathroom, laundry, kitchen, or any other area of the lot excluding the balcony area, in consideration for which the lot owner shall be solely responsible for the maintenance, renewal, replacement or repair the tiles.’

Who is responsible for rectifying the building defect. Unit Owner or Owners Corporation?

Answer: It will depend on the specific terms and whether there are any exclusions.

My response is generally limited as I do not have a copy of the special by-law or a copy of the by-laws for this scheme.

It will depend on the specific terms and whether there are any exclusions.

You would also need to check the by-laws for this scheme to ensure that the by-law is valid and there is no inconsistency.

It could possibly be covered by the by-law however, it may not be as it is more of a drainage issue rather than a tiling issue. Generally speaking, if the floor drain affects the lot owner’s property it is the owner’s responsibility. If the issue is a floor drain affecting the common property it is the owners corporation’s responsibility.

Pierrette Khoury
Khoury Lawyers
E: [email protected]
P: 0415 459 486

This post appears in Strata News #458.

Question: We have court action against the developer for building defects. The developer and his family members are lot owners in the building. How do we limit his influence on the vote about the defect report and proposed special levy?

I live in a block which has a large number of defects. The committee has undertaken court action as the defects have been picked up in the defect liability period. A court action has been commence with the developer as the builder has gone in liquidation as the defendant. Home Warranty Act allows this action if the builder goes broke.

At the strata meeting to approve moving forward with a defect report and special levy, the developer owns 6 units out of 32 and his representative was present in the meeting holding 6 proxy votes. The developer also has has family which own a further 5 units.

When the count came around, the by-laws did not allow the developer to vote as the by-law noted any vote against a party who the motions been direct to i.e. the developer, is the defendant in the court action and therefore they are unable to vote. Obvious the family voted against the motion.

My concern is that in the future, the family will obtain a proxy vote each from the developer and vote against any motion involving action against the developer. Can we stop the family from using these proxies as they are essentially the developer’s vote and this is not permitted in the bylaws.

Answer: It really depends on what stage the matter is at, when the building works were completed and whether litigation has commenced.

It really depends on what stage the matter is at, when the building works were completed and whether litigation has commenced. I would be keen to hear on what stage the matter is at to further assist.

However, in the meantime this is relevant:

Section 192 of the Strata Schemes Management Act 2015 provides for:

192 Owners corporation decisions

THE approval or consent of an owners corporation under this Part is to be given by a resolution of the owners corporation at a general meeting.

A resolution at a meeting is to be determined by a simple majority see clause 14 (1) of Schedule 1:

Decisions at meetings

A developer, or lessor of a leasehold strata scheme, is not entitled to vote, or exercise a proxy vote, on a matter concerning building defects.

Clause 15 of Schedule 1 of the Act provides that the developer is excluded from votes relating to building defects:

15 Developer or lessor excluded from votes relating to building defects

The developer or lessor of a leasehold strata scheme is not entitled to vote, or exercise a proxy vote, on a matter concerning building defects in, or the rectification of building defects in, building work to which Part 11 of this Act applies.

Part 11 of the Strata Schemes Management Act 2015 relates to Building Defects.

Pierrette Khoury
Khoury Lawyers
E: [email protected]
P: 0415 459 486

This post appears in Strata News #450.

Question: The Owners Corporation has failed to carry out necessary maintenance on the building for several years. Our unit is no longer fit for habitation and our tenants had to move out. What can we do?

The Owners Corporation has failed to carry out maintenance on the building for several years and several units have leaking/cracked windows and water damage to the interior of units.

It has been 5 months since we reported the damage to our unit, provided builders quotes etc. The Owners Corporation classified the repairs as urgent, however no work has been undertaken to repair the damage and our unit is no longer fit for habitation which has caused our tenants to move out.

The chairman of the Owners Corporation responded to our pleas for repairs to be undertaken by saying “just drop your rent by 50% and you may find someone prepared to rent it”.

The Owners Corporation levied $440,000 in 2018 to address repairs and refurbishment but two years later nothing has been done. Our contribution was $75,000 – can we demand a refund to enable us to carry out repairs?

Answer: You are unable to demand a refund of levies however late last year the NSW Court of Appeal held that NCAT had power to award damages for loss of rental income incurred by a lot owner. Therefore, the best approach would be to commence NCAT proceedings to recover your lost rental income.

Christopher Kerin
Kerin Benson Lawyers
E: [email protected]
P: 02 8706 7060

This post appears in Strata News #446.

Question: We have found after 7 years a balcony overhead structure was built poorly and is failing. Should I be able to ask the insurer if the defect is covered by building insurance?

Answer: Strata insurance covers “sudden & accidental damage” and most policies will exclude cover for rectification of faulty or defective materials/workmanship.

Strata insurance covers “sudden & accidental damage” and most policies will exclude cover for rectification of faulty or defective materials/workmanship.

Builders warranty cover is available and provides cover for defective workmanship for up to 6 years from completion of work.

Unfortunately in this instance, it is our view the prospects of a successful claim against the strata insurer are very limited.

Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
P: 07 3899 5129

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in Strata News #429.

Question: What happens if builder is insolvent?

Answer: This may trigger indemnity under your home warranty insurance if you are a retrofit strata building or a new building of 3 or less storeys.

This may trigger indemnity under your home warranty insurance if you are a retrofit strata building or a new building of 3 or less storeys, see: Builder Gone Bust? Making the Most of Home Owner Warranty Insurance?

Additionally, there are others who need to be considered, such as, if there were 4 or more residences created, the developer of the land. Also, potentially, is a claim against the sub-contractors, designers, suppliers or manufactures of defective products or those in control of the works. If you contracted or were a contracting party with the certifier, you may also have a claim against it. See:

• Building Defects Overview
• Owners Given New Retrospective Rights to Claim Money for Defects

David Bannerman
Bannermans Lawyers
E: [email protected]
P: 02 9929 0226

This post appears in Strata News #375.

Question: Who is responsible for paying for the remediation of a Serious building defect in an older building that was developed and remodelled by a single owner/developer and then converted to 4 separate strata lots?

Who is responsible for paying for the remediation of a Serious building defect in an older building that was developed and remodelled by a single owner/developer and then converted to 4 separate strata lots?

It is obvious to the members of the newly formed strata that the defect was covered up.

This redevelopment was completed less than 6 years ago.

Answer: If the defect arises from the re-development and involved residential building work, then statutory warranties will apply.

If the defect arises from the re-development and involved residential building work, then statutory warranties will apply and the builder and developer will be responsible for any breaches of the statutory warranties.

The new Design and Building Practitioners Act 2020 may also apply. This creates a statutory duty of care on builders and certain designers, building product manufacturers and suppliers, and supervisors, which duty cannot be delegated or contracted out of. I would need a lot more detail to advise on this.

Christopher Kerin
Kerin Benson Lawyers
E: [email protected]
P: 02 8706 7060

This post appears in Strata News #375.

Question: Our building needs major rectification work costing $2,000,000 due to 20 years of defects which have never been addressed. Can we sue the strata manager of 20 years tenure for failing to not insist the strata committee address the maintenance of the building?

Our Strata building with 22 lots has not had waterproofing to the roof of the building since being built forty years ago. We now require major rectification work costing $2,000,000 to be done including the treatment of concrete cancer.

Can we sue the strata manager of 20 years tenure for failing to not insist the strata committee address the maintenance of the building? I believe the strata manager has failed in the management of our building.

We do not have a Capital Works Fund plan in place and, on inspection of the records, we’ve discovered records of our Strata Plan are missing.

Answer: A better course of action would be to sue the strata committee members.

The answer to the question is “it depends” but given the strata manager is required to follow directions from the strata committee such an action would be unlikely to succeed.

A better course of action would be to sue the strata committee members over the last 20 years for failing to ensure that the sinking fund was adequately provisioned. In this regard, it should be noted that such actions have been successfully prosecuted in the United States.

The maintenance of strata records might be something for which the strata manager could be liable however any solicitor or conveyancer acting for a purchaser could also be liable if he or she failed to suggest an inspection of the strata records (although again any liability here would depend upon the interchange between solicitor / conveyancer and client). However such an action against the strata manager for failing to maintain strata records is unlikely to result in being able to successfully sue for the total loss sought to be recovered (ie $2,000,000).

Finally, most strata managers have caps on liability under their strata management agreement which limit the amount for which they can sued for (assuming they can be sued) in relation to the work required to be completed under the management agreement.

Christopher Kerin
Kerin Benson Lawyers
E: [email protected]
P: 02 8706 7060

This post appears in Strata News #368.

Have a question about major rectification work and lack of waterproofing in NSW strata buildings or something to add to the article? Leave a comment below.

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This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.

Read next:

• ACT: Q&A General Meeting Notice Requirements Prior to the Meeting
• NSW: Apartment Owners Guide to Project Remediate

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