Legal costs | Another day in paradise | Flat Chat Forum: Your Questions Answered
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My elderly mother’s neighbours and the Exec Committee in her block are in a protracted dispute over a leaky roof. The neighbours want the OC to pay for repairs to their roof, which is oddly shaped, and the EC has declined to pay claiming the roof was damaged when an air-conditioning unit was installed. The neighbours have a structural engineering report to say this is not the case and the previous owner of the property complained to my mother about water coming in, well before the air-con was installed. After the heavy rain this week another apartment two doors away has also had water damage as a result of the leaky roof.
The matter has been through adjudication and an order was made in favour of the neighbours, which the EC is now appealing. My mother is becoming anxious because the legal costs etc. are mounting up, and it is not inconceivable that there will need to be a special levy to pay them. Is there anything that can be done to stop the EC pursuing what has become a personal vendetta funded by the OC? My understanding is that most of the other residents are sick of the matter and just want it to go away. At any point can individual EC members be held personally liable for costs?
My perspective is that the EC has a strict statutory duty to maintain the common property and should undertake these repairs as quickly as possible to avoid further damage and a possible greater expense.
Undertaking the repair is the most important thing. Any dispute between the EC and a Lot owner about culpability or contributory negligence should happen after the repair and not before the repair. Both the repair issue and the culpability issue are two separate issues. Based on your comments, in your elderly mother’s neighbour’s situation the EC would be unlikely to succeed in any such claim.
If I was in the position of your mother’s neighbour then I would be writing to the EC and reminding them of their duty to repair and maintain the common property in accordance with both the Act and the Tribunal Ruling, and reminding them that any attempt to claw back the costs from any Lot owner should occur after the repairs have been made.
The EC, on its own, cannot appeal the Tribunal decision. Any appeal must come from a decision of the OC at a general meeting. If the other owners are “sick of the matter” then they should not support the Appeal and should vote against any Motion that the EC proposes regarding continuing with an Appeal on this issue.
In response to your question about damages, a recent Supreme Court case (The Owners – Strata Plan No. 50276 v Thoo) appears to have removed the lot owner’s private right to damages for breaches of an owners corporation’s statutory duty.
The OC are responsible for the roof repair, assuming it isn’t covered under new building construction warranty. If the OC member unit had been effected would this change their attitude, either way the roof repair should be carried out before any further damage to any property on the strata scheme.
It is a sad fact that legal fees from such disputes do come at a price to admin expenses. Which as u are aware they may have to raise a special levy to continue the fight.
Are the majority of major stake holders for or against the repair ? Surely most would wanted it repaired and stop this stupid fight. it should have never esclated to this level if the engineering report states air/con install had not caused the water leak.
Suggest move motion at special meeting of the stake holders as it is part of there strata scheme in joint.
A few years ago, while our EC was trying to act responsibly and make repairs that were an OC responsibility, the AGM rolled by. A couple of owners instigated a campaign to say the OC should not fund the repairs and should therefore reject or amend the budget to exclude the cost.
At relatively little expense we (the EC) obtained a legal opinion from a strata specialist lawyer answering a series of questions that reflect the objections of those couple of owners. I was then able to read out the answer given by the lawyer to each of those owners’ talking points and objections. We had questions such as:
“What risks might the OC have been exposed to if the current EC had not acted as promptly as possible when this matter was brought to the attention of the current EC?”
“Is it relevant that the managing agent in 19xx advised the 19xx EC that this was a matter between proprietors…?”
“Please explain whether and how Seiwa Proprietary Limited v The Owners Strata Plan 35042 (2006) NSWSC 1157 might be relevant here.”
“What impact does it have on responsibility for repairs if the engineer reports that a cause of the damage is …?”
“What impact does it have on responsibility for repairs if a cause of the damage is found to be a defect from the time of construction…?”
And so on. Clear, blunt answers from the lawyer focussed the meeting’s attention and the budget was approved.
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