Community and Strata Issues in Property Law

Our client seeks to resolve the below-mentioned conflicts pertaining to Strata and Community Title Issues. This memo will address them and indicate Shelly's possible courses of action.

1.1 Issue #1: Can Shelly repair common property (i.e. the faulty waterproof membrane under the common balcony tiles) without the Owners' Corporation's (OC) approval?

1.2 Facts:

1.2.1 A faulty membrane under the common balcony tiles causes persistent rainwater leakage into Shelly's apartment. The executive committee ("Exco") claims that the OC's approval is required to perform maintenance.

1.3 Brief Answer Summary

1.3.1 Shelly cannot repair the faulty membrane because it forms part of the common property, which is the OC's responsibility. A special resolution in a General Meeting must be first passed, allowing Shelly to repair the membrane, before she can do so.

1.4 Case Law/Statute:

1.4.1 A strata lot owner is responsible for maintenance and repairs within the lot (Jacklin ). However, the OC has a key duty to repair and maintain common property in the strata scheme: ss.61(2)(a), 62(1) Strata Schemes Management Act 1996 (NSW) ("SSM Act").

1.4.2 According to Furney , the definition of "repair" includes: "to make good or sound, irrespective of its prior state" and the power to "add articles that are necessary to keep the common property in a state of good and serviceable repair".

1.5 Discussion Analysis:

1.5.1 The OC's duty to maintain common property includes replacing any common property fittings and other OC's personal property (s.62(2) SSM Act). Thus, the OC is most probably obliged to fix the defective membrane located on common property.

1.5.2 However, if the OC passed a special resolution, resolving that it is inappropriate to maintain, repair, renew or replace the defective waterproof membrane, Shelly might have to seek the OC's approval to repair the defect herself. (s.62(3)(a) SSM Act)

1.6 Issue: Can Shelly fix the membrane without the OC's approval?

1.6.1 Under s.65A(1) SSM Act, Shelly can 'improve or enhance' the defective membrane on common property if a special resolution is passed at the OC's GM, authorising her to alter the common property. The OC is assumed to do bear the costs of common property maintenance if the special resolution does not specify it. (See s.65A(3))

1.7 Recommendations:

Shelly can choose to have this common property defect corrected by:

1.7.1 Informing the Exco of the defect, reminding them that according to ss.61 and 62, they are obliged to maintain common property and do not require the OC's consent because this duty is not a 'Restricted matter' under s.21(2)(a), or a motion requiring a Unanimous Resolution, or a motion requiring a Special resolution to be passed in a GM.

1.7.2 Writing a letter of concern to the OC's secretary (by filling up Form 3.1 ), requesting a resolution be passed to repair the faulty membrane promptly and competently according to procedure in s.235(2) SSM Act.

1.7.3 If the motion is not considered 2 months after submission or underwent unsatisfactory repairs, she could apply for an Adjudicator's order under s.138 SSM Act, requiring the OC to carry out repair.

1.7.4 Also, Shelly should also lodge a mediation application before the 2-month period expires (s.125 SSM Act) so that the Adjudicator can order maintenance if the complaint is justified. Shelly must prove on the balance of probabilities that the OC was not acting appropriately to maintain and repair common property by showing that :

1.7.4.1 She is the lot's owner;

1.7.4.2 the roof membrane had failed;

1.7.4.3 it was common property;

1.7.4.4 She had repeatedly requested the OC to rectify the problem; and

1.7.4.5 The closing date for submissions was more than 2 months after the request for rectification was made at mediation, which had been unsuccessful (s.138(2) SSM Act).

1.7.5 A failure to seek the OC's permission to alter common property and disobedience to a Notice to Comply could lead to a pecuniary penalty imposed by the Tribunal .

2.1 Issue #2: Is Shelly obligated to pay to repair the crack in the The Villa's swimming pool?

2.1.1 Legal Issue: is she a member of the Community Association ("CA")?

2.2 Facts:

2.2.1 The CA has levied Shelly for $2000, citing Clause 13(6), Schedule 1, Community Land Management Act 1989 (NSW) ("CLM Act").

2.3 Brief Answer Summary:

2.3.1 Yes. As a member of the The Espirit's strata corporation, Shelly is also indirectly a member of the CA. Hence; she has to pay the $2000 special levy.

2.4 Statute:

2.4.1 The CA may impose a special levy on each CA member if it faces expenses it cannot meet from either (Administrative/Sinking) fund: Cl 13(6), Sch 1, CLM Act

2.5 Discussion Analysis:

2.5.1 The Community Land Development Act 1989 (NSW) ("CLD Act") allows for certain land in a Community Scheme to be jointly