Rest In Peace Thoo’s Case?

Rest In Peace Thoo’s Case?   

Under the existing laws:

• a lot owner has no right to sue an owners corporation in damages for the owners corporation’s breach of statutory duty of repair and maintenance under section 62 of the Strata Schemes Management Act 1996: The Owners Strata Plan 50276 v Thoo [2013] NSWCA 270; and

• the door appears to have been slightly left open for a lot owner to sue an owners corporation in negligence for breach of an owners corporation’s common law duty of care.

However, the new strata law reforms which are expected to commence in September/October 2016 will introduce many significant and complex changes to a lot owner’s rights and options in relation to claiming damages from an owners corporation for breach of statutory duty namely:

• the introduction of a limitation period so that a lot owner may not bring an action for breach of statutory duty of maintenance and repair more than 2 years after the owner first becomes aware of the loss; and

• an owners corporation’s ability to defer compliance with its statutory duty if it has taken action against a lot owner or other person in respect of damage to the common property.

However, the above changes will not affect other remedies e.g. negligence, nuisance, injunctions and declaratory relief.

Some of the consequences of failing to maintain and repair common property include:

• Loss of rent claims;

• Diminution in value of property claims;

• Injunctions (if damages are an inadequate remedy);

• Appointment of a compulsory strata managing agent for breach of statutory duty of maintenance and repair;

• Orders to re-instate and repair common property; and

• Public liability insurance coverage issues.

Strata managers need to give proper consideration to the above proposed significant changes and should seek legal advice if met with a claim.

This article has been prepared by specialist strata lawyer Michael Pobi of Pobi Lawyers.

The information contained in this article is general information only and not legal advice. The accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.