Repairing and Maintaining Common Property the Inconvenient Truth

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Information about Repairing and Maintaining Common Property the Inconvenient Truth

Published on March 5, 2014

Author: teyslawyers



strata act, strata mediation, body corporate fees, owners corporation fees, levy recovery, levy collection, strata title, building and construction law, strata negotiation, mediation strata, company title law, strata law, strata lawyers, building defects, by-laws, bylaws, litigation, strata, nsw strata law, victorian strata law, ACT strata law, company title

Repairing & Maintaining Common Property: The Inconvenient Truth A presentation for the Body Corporate Industry Expos 2012 © Copyright 2013 Teys Lawyers

A Body Corporate’s Duty for Common Property is Three Dimensional Duty of Care The common law of occupiers liability Duty to Ensure Health & Safety WHS Act 2011 © Copyright 2013 Teys Lawyers Duty to Maintain & Repair SM 159 / AM 157

Defining Common Property • • • • • • • • • © Copyright 2013 Teys Lawyers Tiles on walls and floor? Claw foot bath? Shower screen? External wall? Internal wall? Cornices? Light fitting? Paintings? Pipes?

The Statutory Duty to Maintain and Repair The 5 principles from Seiwa v SP 35042 [2006] NSWSC followed in Qld in Magog (Prada) 1. Must means ‘must’ 2. Proactivity required 3. Fix defects first, sue later 4. Applies to all the common property 5. Lot owners can sue for breach © Copyright 2013 Teys Lawyers

Common Law Duties Go Beyond Lot Owners Purchasers Tenants Trespassers Visitors © Copyright 2013 Teys Lawyers

Reasonable Care Includes Compliance With Australian Standards When Built • Railings 50 mm below Australian Standard when built • Drunk “buck” fell when squeezing past wrestling mates and became a paraplegic • $3.21m damages against owners corporation reduced by 30% contributory negligence; Toomey v Scolaro Concrete Constructions and Ors (2) [2001] BSC 279 © Copyright 2013 Teys Lawyers

Reasonable Care at Common Law Does Not Include Retro Fitting for Changing Australian Standards • To take reasonable care to protect people from risks that can be foreseen and avoided; Ridis v SP 10308 (2005) NSWCA 246 • A majority decided some form of proactive management was required of owners corporations because of s.62 SSMA 1996 but Australian Standards about glass are not retrospective © Copyright 2013 Teys Lawyers

Reasonable Care Includes Adopting New Non-structural Australian Standards • A carpet off-cut tripped a man who fell down the stairs • A $25 non-slip mat recommended by a postconstruction Australian Standard would have avoided the accident • Home unit blocks with higher density require greater precautions than an ordinary home; Morgan v SP 13937 (2006) NSWSC 1019 © Copyright 2013 Teys Lawyers

Strata Manager v Owners Corporation • Wong v Body Corporate 1 Plan No 433814P (2009) VCC 0100 • Slip and trip at the dentist. Strata manager responsible for routine and minor repairs and maintenance and general advice • No delegation of responsibilities • Manager arranged safety report that did not recommend non-slip treatment for tiles • Body corporate 100% responsible vis-à-vis strata manager © Copyright 2013 Teys Lawyers

This Year the Stakes are Higher Due to a New WHS Regime • Recklessness / risk – OC / BC $3 million – Committee $600,000 / 5 years jail – SM $300,000 / 5 years jail • Breach / risk – OC / BC $1.5 million – Committee $300,000 – SM $150,000 • Breach – OC / BC $500,000 – Committee $100,000 – SM $50,000 © Copyright 2013 Teys Lawyers

But the Defence for Personal Liability is Clearer 1. 2. 3. 4. 5. Keep up to date Understand operations Eliminate or minimise risks Process information Supply resources and processes 6. Verify provision and use of resources and processes (Due diligence defence S.27(5) WHS 2011) © Copyright 2013 Teys Lawyers

New WHS Laws at a Glance Effective 1 January 2012 in QLD, NSW, ACT No ‘grace period’ for compliance (OHS plans good for 12 months) OC / BC = Person carrying on a business or undertaking Residential strata exemption confusing & virtually useless Reverse onus removed - prosecution must prove breach © Copyright 2013 Teys Lawyers

The New WHS Approach ‘Work’ is the key concept not ‘Workplace’ © Copyright 2013 Teys Lawyers PCBU concurrent duties of care, consultation & co-operation Positive duty for officers to exercise due diligence Significantly increased personal liability

Person Carrying on a Business or Undertaking Business Profit Residential purposes only exemption – applies only to occupants doing domestic work © Copyright 2013 Teys Lawyers PCBU Volunteer association exemption – strata fails community purpose test Non-profit Undertaking

PCBU’s in the Strata World Owners Corp / Body Corp Strata Manager Building Manager Lot Occupier © Copyright 2013 Teys Lawyers

Persons Who Are Not A PCBU A strata body that is responsible for any common areas used only for residential purposes is not a PCBU so long as no worker is engaged as an employee (s.7 WHS Act 2011) © Copyright 2013 Teys Lawyers

Only for Residential Purposes Means No • OC / BC employees • Common property with commercial lots • On-site letting agent • Lots used as home businesses • Nannies employed in lots • Lots for short term accommodation • Communication towers / satellite dish / advertising signs • Paid workers temporarily on site © Copyright 2013 Teys Lawyers

The Basic WHS Duty of Care “To ensure, so far as is reasonably practicable, the health and safety of workers and other persons” Hargreaves v Telstra Corp Ltd [2011] AATA 417 (17 June 2011) is the high water mark © Copyright 2013 Teys Lawyers

Reasonably Practicable Depends on …… Likelihood of risk Degree of harm Actual or imputed knowledge Options to eliminate & minimise risk Cost v risk © Copyright 2013 Teys Lawyers

Primary Duties of a PCBU Safe Work Environment Conditions & Health Monitoring PCBU Primary Duty of Care Adequate Welfare Facilities Info, Training, Instruction, Supervision © Copyright 2013 Teys Lawyers Safe Plant & Structures Safe Work Systems Safe Use Handling & Storage

Additional Duties of PCBU in Control of a Workplace “The person with management or control of a workplace must ensure, so far is reasonably practicable, that the workplace, the means of entering and exiting the workplace and anything arising from the workplace, are without risks to the health and safety of any person” S.20 WHS Act 2011 © Copyright 2013 Teys Lawyers

Special Rules for Asbestos For buildings built prior to 1 January 2004 © Copyright 2013 Teys Lawyers • Must identify all asbestos • Must have a register in any event • Register must be kept on site • Asbestos management plan required if asbestos is identified • For major repair or demolition special rules and procedures must be devised

Duties of an Officer of a PCBU “An officer of a PCBU must exercise due diligence to ensure that the PCBU complies with its duties and obligations” S.27 WHS Act 2011 © Copyright 2013 Teys Lawyers

Officers in the Context of Strata • Committee members • Original owner • Compulsory administrators • Strata managers • Building managers © Copyright 2013 Teys Lawyers

Think 3-D ‘Demonstrating Due Diligence’ © Copyright 2013 Teys Lawyers

We Can Help You Develop a Systematic Approach to WHS Due Diligence  27 page checklist style report  Specifically addresses the 6 due diligence requirements  Contains 8 easy to use forms and precedents  Customised for each body corporate at $395 + GST © Copyright 2013 Teys Lawyers

About the presenter Michael Teys is the Founder and Principal Lawyer of TEYS Lawyers. He has a Bachelor of Laws and practices exclusively in the area of strata title law. He is a Fellow of the Australian College of Community Association Lawyers. He was formerly an Adjunct Lecturer with Charles Sturt University. He appears weekly on SKY News Business Channel's Property Success with Margaret Lomas and is a regular panellist for the property edition of Your Money, Your Call for the same channel. You can find out more about Michael at or follow him on Twitter Teys Lawyers practice nationally in strata title law representing owners corporations, bodies corporate and apartment owners. The firm’s practice groups include building defects, strata community disputes, strata titles property law, by-laws and levy collection. Subscribe for their free e-newsletter StrataSpace and find out more about them at © Copyright 2013 Teys Lawyers

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