At our Owners Corporation Workshop in June 2013, we presented on water damage to common property and the Water Act 1989. Below are the notes provided during the presentation:
A regular issue confronted by OC managers is water damage caused to common property.
- What steps can the OC take to minimise such incidents?
- Who pays for those repairs?
The OC can also be liable for water damage caused to lot owners or third parties (e.g. neighbours of the property).
- What are the circumstances in which such a liability can arise?
- How broad is the risk?
Water damage to common property
Relevant sections from the Owners Corporation Act:
4. An owners corporation has the following functions:
(a) to manage and administer the common property;
(b) to repair and maintain:
i. the common property; and
ii. the chattels, fittings, fixtures and services related to the common property or its enjoyment.
5. An owners corporation in carrying out its functions and powers:
(a) must act honestly and in good faith; and
(b) must exercise due care and diligence.
46. An owners corporation must repair and maintain:
(a)the common property; and
(b) the chattels, fixtures, fittings and services related to the common property or its enjoyment.
The consequence of these sections is that when the common property is damaged, the OC has a responsibility to repair and maintain the common property. However, the responsibility is in respect of the common property, not the lot owner’s chattels, property etc. which may be contained in the common property.
What is the required standard of care?
Discussion on the relevant standard of care – Boyes v Owners Corporation No 1 PS 514665E
KEY MESSAGE: Regularly maintain/repair the common property. In older buildings it may be a good idea to undertake an annual inspection (perhaps by a building consultant) to identify any issues with the building. This will have two benefits – any maintenance/repair issues will be identified and can be attended to (also will help with the budgeting for such repairs and the formulation of levies etc.) AND assist as part of defence against a claim later brought by a lot owner that failed to act with due care and diligence.
Lot Owner’s obligation to maintain his/her lot
Section 129(a) of the OC Act provides that:
A lot owner must properly maintain in a state of good and serviceable repair any part of the lot that affects the outward appearance of the lot or the use or enjoyment of other lots or the common property.
Notice to Repair (section 48)
An OC can serve a notice under section 48(1) of the Act.
(1) If a lot owner has refused or failed to carry out repairs, maintenance or other works to the lot owner’s lot that are required because:
(a) the outward appearance or outward state of repair of the lot is adversely affected; or
(b) the use and enjoyment of the lots or common property by other lot owners is adversely affected- the owners corporation may serve a notice on the lot owner requiring the lot owner to carry out the necessary repairs, maintenance or other works.
(2) If a lot owner has been served with a notice under subsection (1), the lot owner must carry out the repairs, maintenance or other works required by the notice within 28 days of the service of the notice.
(3) If a lot owner has been served with a notice under subsection (1) and has not complied with the notice within the required time, the owners corporation may carry out the necessary repairs, maintenance or other works to the lot.
KEY MESSAGE: This is relevant in the context of Water Flow issues, because if the activities or omissions of the lot owner are causing damage to other lot owners or the common property and the OC does nothing to address the issue, the OC can be liable for breaches of its obligations under the OC Act (section 5 – act with due care and diligence) as well as general duty of care.
Application of the Water Act 1989
Relevant Sections
An alternative avenue open to OC’s in dealing with water coming onto common property is section 16 of the Water Act 1989. However, this section equally exposes the OC to claims when the source of the water is (whether being the original or secondary source) the common property.
Section 16 essentially provides that:
- If there is a flow of water from the land of one person onto the land of another person; and
- That flow is not reasonable; and
- The water causes damage to the property of that other person (including both physical damage and/or economic loss); then
- That other person can claim damages in respect of that loss from the first person.
Another relevant section is section 20, which sets out the matters to be taken into account in determining whether the flow is reasonable.
KEY MESSAGE: If the flow of water originates from the common property, the OC could be liable to a neighbour in respect of the damage and/or loss caused by that flow.
More information
For more information, or advice and guidance on strategies to manage asbestos risks in your property, please contact Anton Block, Principal Lawyer and Head of Owners Corporation, on (03) 8600 8833 or ablock@kcllaw.com.au.
Note: This update is a guide only and is not intended to constitute legal advice.