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ISTM's "Who is Responsible?" document
Anajr
FlatChatter
24/08/2012 - 3:18 pm
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Just wanting to update in case this is useful to others and also to thank Jimmy for your advice.

 

This week the adjudicator served the OC with an order to rectify all the damage at their expense! Saying that as the damage was caused by common property I am not responsible and should not be expected to pay for it or claim it on my insurance.

 

Unfortunately they can't order the OC or strata to pay costs so in all it has cost me about $150 in filing fees (including the mediation that strata ignored) as well as numerous hours of work and stress (I still haven't managed to find out what actually caused the leak and what was done to fix it but apparently it is still actually leaking a bit).

 

Now I just hope that Strata actually do the work. It seems unfair that the owners have to pay for the work (and also a penalty if it doesn't get done) when really it is the direct fault of the complete and total incompetence of the strata managers.

Jimmyt53
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19/07/2012 - 8:52 am
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Most of what's in the document applies to most buildings but every strata scheme is different in some way and there may be instances, such as you have identified, that require some tweaking. The way to do that is to either remove or change the items in the document to suit your circumstances and then approve the document 'as amended' or you could have a separate by-law, for instance, making windows and balconies part of common property, which brings your building into line with the memorandum.
The memorandum is not a one-size-fits-all solution and it's not a law (until you make it a by-law). There's nothing to stop you changing it to suit your strata scheme and it will solve a lot more problems than it creates.

she11e
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19/07/2012 - 7:51 am
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Our scheme is voting in the next AGM to adopt this Memorandom. I am living in a block where the Strata Scheme was registered prior to 1974 changes, so the doors and windows on the balcony are private property. Does this mean the whole section about the balcony doesn't apply? I was hoping this would overule the existing arrangement, but based on what people have posted it appears not. Generally, is the tool useful and worth adopting given problems such as this?

Cosmo
NSW Regional
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16/05/2012 - 3:09 pm
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Thanks Jimmy, Your reply did clarify the issue at least for me. as I was getting a little bit confused from all the previous debate. Very well put and reduced to its essential elements. It would add some weight to any issues arising to have it formally adopted.

 

I am hoping that our strata will take this opportunity to register other by-laws at the same time so as to avoid costs. 

Jimmyt53
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16/05/2012 - 12:51 pm
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If you want the memorandum to apply directly to your Strata plan, you need to adopt it under a special resolution.
However even if you don't do that and someone challenges an EC decision that has been made based on the Memorandum, they are going to find it hard going with any SCA (formerly ISTM) strata manager, as well as at Fair Trading and the CTTT, because these bodies were all party to the formulation of the Memorandum and at the very least will use it for their own guidance.
That said, the document is not absolutely definitive even if you do adopt it because a) it's not part of strata law and b) by-laws are inferior to other laws. So if, for instance, the Memorandum says the OC isn't liable for damage cause by the failure of OC property but common law says it is, you might have a Memorandum-based decision overturned in a court of law. The question remains, wouldn't it be easier and cheaper to just accept the principles in the Memo and insure your property appropriately?
There is a lot of common sense and clear thinking in the Memorandum and I would urge OCs to adopt it pretty much wholesale. But it's not strata law so there will inevitably be disputes.

Cosmo
NSW Regional
Flat(chat)Mate
16/05/2012 - 11:16 am
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I have a view I want to express and put out there for feedback. Anjar made the initial comment "I have asked strata to clarify where this comes from, what legislation, etc. They told me to contact ISTM but ISTM are an industry group for Strata Managers and so won't deal with me as I'm not one & so not a member.". We have a similary issue at our strata, with a lot owner claiming that without formal 'adoption' the Memorandum has no authority.


Basically it appears Memorandum AG520000 titled "Defining_who_is_responsible_for_items_in_a_Strata_Scheme" was published by the Land and Property section of the NSW government in late 2011. It states that it can be used by both new and existing Strata Schemes. The Memorandum Memorandum was developed as an initiative of the Strata Industry Working Group (SIWG) which is hosted by LPI and includes representatives from industry and government who share an interest in the development and management of strata schemes. .
 
According to here at the LPI web site: http://www.lpi.nsw.gov.au/abou.....ata_scheme a special resolution is needed to adopt the Memorandum.
 
However, if the Memorandum is not adopted, is it still authoritive? I would say that, in the absence of specific legislation or by-laws to the contrary, it is.
Anajr
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16/05/2012 - 10:43 am
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scotlandx said

So now you can go ahead and apply for adjudication, you just need to attach evidence that you did the mediation step which I believe is the advice that the other party declined and the file has been closed.

Thanks for that - still waiting for that letter to arrive as the mould spreads throughout the bathroom.

Do you happen to know if I have to pay another fee to apply for adjudication or whether the mediation fee carries forward? Not only is it another expense but I also have to take time off work to pay it as they don't have any digital payment methods.

scotlandx
StrataGuru
15/05/2012 - 4:14 pm
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That's a different issue - what that means is where there is a mediation, the parties attending must have the authority to agree to any settlement/terms that are agreed. 

If someone applies for a mediation the other party can decline to attend.  Refer here:

http://www.fairtrading.nsw.gov.....ation.html

The mediation step is because you can't apply to the CTTT for an adjudication unless you have done that.  The way it works is you apply for mediation, the mediation occurs or does not occur (if the other party declines to attend), if no resolution is reached then you can apply for adjudication.  The advice given to you by the OFT was correct to that extent.

So now you can go ahead and apply for adjudication, you just need to attach evidence that you did the mediation step which I believe is the advice that the other party declined and the file has been closed.

Anajr
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15/05/2012 - 1:30 pm
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Another interesting but apparently useless find:

 

STRATA SCHEMES MANAGEMENT REGULATION 2010 - REG 24

24 Attendance and representation

(1) A mediation session must be attended by each party or by a legal representative, or other representative, having authority to settle the matter.

 

There is no mention of any penalty for not attending and clearly it isn't enforced by OFT.

Jimmyt53
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14/05/2012 - 11:32 pm
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That case backs up what we say elsewhere - Fair Trading might not support a claim for damage caused by failed common property but common law and this legal precedent clearly does. Thanks!

Anajr
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14/05/2012 - 11:56 am
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This saga continues.

 

I applied for mediation (& paid $74 to do it). Strata then requested an extension to respond as Fair Trading had missed a few pages of the copy they received. Then when the deadline had passed I received a call from mediation saying that the EC had 'declined to attend mediation' and so they were closing the file! I had no idea this was even an option and was told by OFT that I had to apply for mediation before I could apply for an order.

The person I spoke to suggested he was under the impression that it meant they were going to do the work. I wrote to strata asking if that was the case before I spend another $74 applying for an order. Needless to say I haven't had a response yet.

 

I also supplied Strata with this case which I thought might be of interest to the forum as well.

 

http://www.austlii.edu.au/au/c.....98/11.html

Jimmyt53
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03/04/2012 - 7:58 am
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easty said:

I also think we should also refer to: 

"STRATA SCHEMES MANAGEMENT ACT 1996 – SECT 92

Insurance claim where owner at fault

92 Insurance claim where owner at fault

If an insurer of an owners corporation accepts a claim by the
owners corporation based on an act or omission by an owner of a lot, the insurer has no right of subrogation in relation to the owner based on that act or omission unless it is proved that the act or omission was wilful".

What is subrogation? This definition is from the FindLaw website: 

Simply stated, the right of subrogation is the right to pursue someone else's claim. If you are subrogated to someone's claim, it sounds as though you are somehow subordinated to it — but that's not what it means. It means that you may pursue it as though it were your own. It can arise by the express agreement of the parties, or automatically by operation of law.

Let's look at a few examples.

  1. Insurance. Suppose you own a building which burns down due to the negligence of a third party. Normally you could sue the negligent third party for causing your building to burn down. If your fire insurance company pays off your claim, however, the insurance company is then subrogated to your claim against the negligent third party. This means your claim against the negligent third party is treated as having been assigned to the insurance company, which may sue him to recover the amount it paid you on account of the fire loss.
easty
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03/04/2012 - 1:39 am
Member Since: 14/11/2010
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I also think we should also refer to: 

"STRATA SCHEMES MANAGEMENT ACT 1996 - SECT 92

Insurance claim where owner at fault

92 Insurance claim where owner at fault

If an insurer of an owners corporation accepts a claim by the
owners corporation based on an act or omission by an owner of a lot, the insurer has no right of subrogation in relation to the owner based on that act or omission unless it is proved that the act or omission was wilful".

 

 

Colin Grace
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02/04/2012 - 6:44 pm
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Ther are a lot of things in this and Jimmy is correct in the use of the "who's responsible" document.  It is very useful as a guide.

Your issue is more complex and deals with the law of nuisance overlayed with responsiblities of the OC in maintaining its property and then finally insurance issues.

The basics are that the OC must maintain its property.  If it does not maintain its property and it casues damage then any resultant damage may also be the responsibility of the OC.  This is where insurers step in some times.

If the damage is an 'insurable event" (like a burst pipe) then insurers will step in and pay for the repairs (including the resultant damage).  Some insurers will indemnify 100% (including painting etc) others not.  That is a contractural issue between the OC and its insurer.

The obligation the OC has to you is different. 

Hope this helps.  What you need to do is discuss it with hte executive committee and go from there. Cool

Jimmyt53
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30/03/2012 - 4:48 pm
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Easty

This illustrates very neatly the difference between what we can do and what we should do.

I think your EC and insurers were generous (ok, make that community spirited) to pick up the tab for someone's misfortune.

But I'm sure the reality is they could have chased the poor sod for the full amount, regardless of whether he was insured or not (my thinking is that as soon as that pipe leaves the wall, it's the owners responsibility).

But like I said, in the cut and thrust of strata living, we should be able to do these things ... just as we should allow ourselves to fix minor problems that aren't strictly speaking our responsibility but are just easier and less hassle to get on with and get done.

The one thing that irks me, though, is when professionals who should know better start quoting non-existent laws to avoid their responsibilities. Who are they actually helping when it might be better to say "Mate, do us a favour and deal with it yourself and we'll put you down for a few brownie points to your credit." 

We can but dream.

easty
Flat(chat)Mate
30/03/2012 - 3:29 pm
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Last year in our plan a lot owner's internal flexible water supply pipe underneath the sink in his bathroom burst while he was away on holidays.  The damage caused was considerable, not only to the lot owner's property, but also the common property.

Anajr said :

"I don't know whose fault the leak is because the OC won't answer my questions about it but I know it wasn't mine so don't see why I should be out of pocket for it. "

If Anajr's argument can be sustained then I am sure Anajr would agree our OC should be able to recover the  many thousands of dollars damage to it's property from the lot owner because the leak in our case wasn't the OC's fault.

Of course we did not do that but claimed on our insurance and the OC paid the excess.  But if we had thought the damage caused was due to the lot owner's negligence or say a malicious act then we would have advised our insurer who in turn would have followed up.

May I suggest that would be the best course of action for Anajr - claim on your insurance, give your insurer the full facts and let then do the follow up which they would do if you could show them that OC failed to maintain the common property.

Notwithstanding I think lot owner's should be very careful about what they wish for.   It is very dangerous, in my opinion, to take the view that if my property is damaged and it wasn't my fault then why should I be out of pocket.  Some day Anajr's internal water supply pipe might burst or a fire could start accidentially in his kitchen or whatever.  I suggest Anajr would be very unhappy if his neighbour (or the OC) adopted the view it wasn't my fault and subsequently came running after him for money to effect repairs. 

Jimmyt53
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29/03/2012 - 1:15 pm
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I think  the strata managers are misreading the Memorandum because what they are saying is contradictory. 

It states very clearly that water pipes in the ceiling, floor or walls are the responsibility of the OC.

2.17 Plumbing (includes bathroom, kitchen and laundry). OC responsibility.
a. Blocked floor drain or sewer.
b. Burst pipe general.
c. Burst pipe outside the lot.
d. Damage to unit after water leak when OC effecting a repair.

By the way, "outside the lot" also means inside the original ceiling.

2.3 Ceilings or Roof. OC responsibility.
a. Ceiling cornices.
b. False ceilings installed on the registration of the strata plan and were there to hide communal piping, ducting or wiring etc.

And yet you seem to have this bizarre ruling that they aren't liable for paintwork caused by failure of Common Property IN Common property … but they are responsible for fixing the paintwork damaged in effecting the repair. Whether that't right or fair is irrelevant – it's contradictory.

But is that in fact the ruling? Read the actual wording again:

2.18 Plumbing (includes bathroom, kitchen and laundry). Owners responsibility.
a. Burst pipe within the lot.
b. Cabinet and/or mirror.
c. Cracked bath or hand basin.
d. Dripping ʺSʺ bend under sink.
e. Leaking pipes under sink.
f. Plug and waste in bath, sinks and tubs.
g. Shower Screen repairs.
h. Toilet bowl or cistern.
i. Water leaking from a bath or shower and not affecting another lot.
j. Water leaking from shower, bath or hand basin taps.
k. Water leaking through tiles and not affecting another lot.
l. Damage to a lot caused by any water leak mentioned above, as a result of the problem itself.

Surely the phrase "any leak mentioned above" refers to items a to k in this section … not the section above. So there is no contradiction – the strata managers are wrong and the OC is responsible of the damage to the paintwork caused by common property piping.

Whale
NSW
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29/03/2012 - 1:15 pm
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If people (including me) find any Legislative or Regulatory provisions to be onerous or administratively / operationally incorrect, then the solution is to advise the Regulators and wait for the next Review to have a say - not to make expedient interpretations, even if they do seem sensible.

In the meantime the operation of the NSW Strata Schemes Management Act (currently under review) requires the Owners Corporation (O/C) to make-good any private property that's been damaged to due a Common Property fault.

As onerous as that appears in Anajr's circumstances, where the O/C was not negligent in any way, an Application for Mediation will, as Jimmy T advised, "explain to them (the S/M) how and why" that liability exists.

Don't do the repairs yourself Anajr, but instead advise your S/M that you're applying for Mediation, then do that, and wait for the process to run its course.

Jimmyt53
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29/03/2012 - 12:50 pm
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Anajr said:

Has anyone had any experience with ISTM's (or Strata Community Australia as they are now called) "Who is responsible" document?

http://nsw.stratacommunity.org.....nsible.pdf

My strata managers are using it as a bible when refusing to repaint my damaged bathroom ceiling (see my earlier post for all the details) citing this section:

 

Just a general note here to all users - please don't start a new thread every time you come back to a topic.  There are dozens of postings coming in every day and it's a lot harder for other readers to find your original posting than it is for you to do so.  Most won't bother to go looking for it so you are wasting your time referring back to 'previous postings' on another thread.  I put the cross-referenced link in here but, really, I have better things to do with my time. -JT

 

Anajr
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29/03/2012 - 9:12 am
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Isn't that like saying if I chose to drive a porsche and another driver crashed into it but their brakes failed so it wasn't their fault that I should pay for it? In that situation they or their insurance would be responsible for the repairs, no matter the value, and I wouldn't lose my no claim bonus.

 

I don't know whose fault the leak is because the OC won't answer my questions about it but I know it wasn't mine so don't see why I should be out of pocket for it. I can claim on my insurance but I would need to pay the excess plus then my premiums go up. Plus if what you suggest is correct this could in theory happen again and again until I'm bankrupted or refused insurance coverage.

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