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Posted 08 March 2018
Category: Strata, NCAT and Court Proceedings
The NCAT Appeal Panel has recently found that NCAT has unlimited jurisdiction when it comes to making an owners corporation pay compensation to a lot owner for reasonably foreseeable loss arising from a failure to maintain common property.
In the case of The Owners Strata Plan No 30521 v Shum  NSWCATAP 15 the owners corporation challenged NCAT’s jurisdiction to order compensation on two basis:
In respect of the first basis, the Appeal Panel found that:
On the second basis, the Appeal Panel found that the Act is not retrospective in its operation and NCAT does not have the power to order compensation in relation to a breach of the former legislation and for loss and damage suffered by a lot owner prior to the commencement of the Act on 30 November 2016.
The Appeal Panel also held that the owners corporation’s failure to maintain the building was an ongoing breach of the statutory warranties and that the lot owner was entitled to compensation for each occurrence of the breach.
It is important for owners corporations and their managing agents to be conscious of any circumstances which may give rise to a lot owner incurring any loss or damage as a result of the owners corporation’s failure to maintain the common property.
This case concerned loss of rent however it is conceivable that if a failure to maintain causes damage to property the compensation sought may be substantial.
We recommend that an owners corporation should obtain legal advice as soon as it becomes aware of a lot owner potentially incurring a loss as there are limitation periods within which the lot owner must make the claim and there are legal tests which need to be satisfied to prove the claim.
***The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.