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A court decision might mean that apartment owners are liable for the repair costs of units other than their own – a situation that only serves to underscore the importance of purchasing property insurance on a new apartment.
Prominent law firm MinterEllisonRuddWatts recently wrote about Body Corporate S73368 v Otway – a court case of an apartment building where first floor units have large decks that serve as roofs for ground floor retail units and the pedestrian walkway below. When the waterproof membrane on the decks failed, water leaked to the apartments below, leaving building administrators to argue that deck owners should foot the bill for those repairs.
Courts ultimately decided that that the repair costs should be borne by all apartment owners.
“The Otway decision creates real uncertainty around who pays for repair costs perceived to be a weathertightness issue,” said Stephen Price, a partner at MinterEllisonRuddWatts.
“An upshot of this decision is that costs of repairing the defect may be shared by all apartment owners – which might be good news if you own an apartment with defects seen to be a systemic weathertightness issue. On the flip side, if you own an apartment in a complex where another apartment has a ‘weathertightness issue,’ you may have to pay for something you never get to enjoy – like a deck attached to a unit you don’t own.”
The firm advises that apartment buyers include a weathertightness assessment of the entire complex.
“As Otway has seemingly created a common responsibility for building elements contained within individual property, this is fraught with practical difficulties given that defects might be within private property to which you have no access,” said the firm. It is also recommended that buyers look at adequate insurance to cover any unexpected additional costs.
