Can owners be forced to fund improvements that disadvantage them?
Page 4 | Kerin Benson Lawyers
Considering tax and setup fees, is a term deposit a worthwhile investment?
Page 14 | TINWORTH & CO
How can a four-lot strata scheme find a strata manager willing to take on small schemes?
Page 26 | Tender Advisory
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How accurate are costs for insurance and DBPA document lodgement in an engineer’s scope of work? Bruce
If an insurer accepts a claim for repair of a leaking shower, can they refuse future claims if the shower leaks again?
Who is responsible for removing a large tree on lot property that is damaging a common property fence?
Considering tax and setup fees, is a term deposit a worthwhile investment?
Can special levy funds be moved between the admin and capital works funds?
What are committee members’ personal liability if they take no action to disclose or remediate major defects? Bruce McKenzie, Sedgwick
Can the owners corporation force an owner to remove the front screen door attached to their fire door?
Chris Chatham, LINKfire
If owners do not comply with a fob audit by the due date, can the owners corporation deactivate their fobs?
Leanne
“We can’t afford that” How to respond when committees push back on maintenance
How can a four-lot strata scheme find a strata manager willing to take on small schemes?
Megan Parkins, Tender Advisory
Outdated by-laws? It’s time for change
Allison Benson, Kerin Benson Lawyers
Should short-term rental guests have access to the window restrictor key?
Anthony Shakar, ASQB and Tyrone Shandiman, Strata Insurance Solutions 32 If the neighbour above wants to access my lot to renovate their bathroom, am I required to provide access?
Matthew Jenkins, Bannermans Lawyers
The NSW LookUpStrata Directory
Can owners be forced to fund improvements that disadvantage them?
If new balconies mostly benefit seven of nine units but negatively impact sunlight and views for the remaining two ground floor lots, must all owners still contribute equally to the cost?
There are nine units in our block. The owners corporation wants to extend the building’s balconies, positively impacting seven units. However, the balconies will block sunlight and views for the two ground-floor lots. The owners corporation plan on proceeding, with all owners sharing the cost equally.
Some units will get 20m2 or 15m2 of usable balcony space, and the ground floor lots will only gain 13m2. The plans include removing the front walls to make way for glass sliding doors, an advantage for the top seven units, but this will reduce privacy for the two ground-level units that face the road. Are the two ground floor units required to contribute equally to the works even though the improvement doesn’t benefit them?
Assuming the by-law is not invalidated and that it is in respect of common property works, a lot owner would need to contribute to the works.
This question is specific, and it appears to require legal advice.
In general, the scenario described would likely have required a development application (which would have involved a detailed consultation process). The extension of the balconies is
likely to require subdivision as the lot balconies are increasing in size and incorporating airspace, that was previously (or presently, is still) common property. This might also require adjusting the unit entitlements as a result. We are also unsure of the age of this strata scheme, and it may be under the pre-74 centreline rule or the post-74 current rules.
In respect of unequal benefit, no rule expressly prohibits by-laws that create an unequal benefit (assuming these works create an unequal benefit). A by-law may be invalidated by the Tribunal, pursuant to Section 150 of the Strata Schemes Management Act 2015 (NSW) (“SSMA“) where a by-law is unjust, or harsh, unconscionable, or oppressive: Section 139 of the SSMA. A by-law, by merely creating an unequal benefit, might not reach the criteria of unjust, harsh, unconscionable, or oppressive, and whether the threshold is met would turn on the specifics of the by-law and the unequal benefit.
Assuming the by-law is not invalidated and that it is in respect of common property works, the answer would be in the affirmative: a lot owner would need to contribute (according to unit entitlement) to the works.
These are the general observations we have from the question, but given the very specific scenario presented, and a lot can turn on the specifics, we strongly suggest the enquirer seek legal advice.
Matthew Lo and Ashley Howard | Kerin Benson Lawyers enquiries@kerinbensonlawyers.com.au
How accurate are costs for insurance and DBPA document lodgement in an engineer’s scope of work?
An engineer’s scope of work to replace waterproofing membranes includes amounts for insurance and DBPA document lodgement. At this stage of the process, how accurate are the amounts mentioned?
Our strata scheme has 33 units in two buildings. The waterproofing membrane on both roofs needs to be replaced. The roofs are a flat concrete structure, and the building was constructed in 1984.
The engineer’s scope of works quoted a $35,000 premium for the HBCF insurance certificate and $20,000 for the lodgement of documents with the DBPA.
How can I check these quotes are reasonable? How do we know the insurance quote is accurate, given we have not yet gone to tender and thus do not have quotes for the repair costs?
These amounts would likely be subject to change depending on the final project or contract cost.
Costs associated with HBCF and lodgement of documents to comply with the DBPA are generally costs dependent on the extent of works and final value.
If an engineer has prepared a scope, it is unlikely these amounts are fixed quotes and are a guide or provisional allowances that would be subject to change depending on the final project or contract cost.
Check the scope of work qualifications or conditions. If they are unclear, ask the engineer how the costs were established.
Often, provisional allowances are included at the higher end to ensure sufficient funds are allowed. However, the final cost will always be determined once tendering occurs.
Therefore, realistically, checking these costs for accuracy can only occur once the project costs are established. Provisional sums for these items are industry standard, based on the uncertainty of final values.
Bruce McKenzie | Sedgwick bruce.mckenzie@au.sedgwick.com
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If an insurer accepts a claim for repair of a leaking shower, can they refuse future claims if the shower leaks again?
Our insurer accepted our claim for repair of our leaking shower in our lot. After repair, they notified us that the insurer would not accept any future claims if the shower leaked again. Is this usual?
Our insurer accepted our claim for repair of our leaking shower in our lot. A licensed company did the waterproof seal, and the insurer approved the method of shower repair. When the claim was completed, a different consultant notified us that the insurer would not accept any future claims if the shower leaked again. Is this legal and usual?
Get written advice from the insurer that confirms their
and references the
For the insurer to be able to deny any future claims related to the repaired shower recess in your lot, this must be specifically stated in their policy. If this condition does not show on your policy, the insurer must then assess future claims as they arise based on the policy exclusions that already exist in your policy.
It is not clear whether the “consultant” is a representative of the insurer. However, in this instance, I recommend obtaining written advice from the insurer, which confirms their position and references the policy terms, conditions, and exclusions.
If the insurer feels a future claim would not be covered due to a specific exclusion in the policy wording, they should advise this.
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Who is responsible for removing a large tree on lot property that is damaging a common property fence?
A townhouse owner in our complex has a mature gum tree inside their lot that is distorting a common property boundary fence. Who is legally and fiscally responsible for removing this large tree?
A lot owner in our NSW townhouse complex has a mature gum tree growing just inside their lot. The tree is over 20 metres tall and has started to distort a common property boundary fence. This tree’s growth will shortly damage and push the fence further into a common property pathway and impede access to many of our other lots.
Who is legally and fiscally responsible for removing this large tree? Will the local council’s tree preservation scheme influence the tree’s removal?
As the cause of potential damage will presumably be the roots or the sheer height of the tree (both seemingly within the common property), the removal (if Council consent is obtained) should be the owners corporation’s cost.
You have identified the key issues here. While the tree is technically within the lot, its height and depth will likely be outside the stratum/ cubic air space of the lot and penetrate common property air space at both ends (the strata plan will indicate what the lower and upper limits of private air-space are).
You should seek Council consent for the tree removal (and the owner’s) as the specific requirements vary from council to council. In terms of the financial responsibility for the tree removal, the cause of potential damage will presumably be the roots or the sheer height of the tree (both seemingly within the common property). Therefore, the removal (if Council consent is obtained) should be the cost of the owners corporation.
Considering tax and setup fees, is a term deposit a worthwhile investment?
Should a block of 18 units consider investing a lump sum of their excess cash in a term deposit? What would this cost in tax accountant and setup fees?
We are a block of 18 units in NSW. Our capital works and admin fund totals $100,000. Rates offered for term deposits look favourable. Should we invest $60,000 in a term deposit? How much would this investment cost in terms of tax accountant and setup fees?
The OC needs to look at the after-tax return before they can make an informed decision.
The owners corporation (OC) needs to look at the after-tax return before they can make an informed decision. $60,000 accrued interest at 5% for twelve months would be $3,000. Without actual numbers, it is not possible to determine the pro-rata expenses that would be deductible, but let’s assume $100. The tax payable on $2,900 at a rate of 30% would be $870. The cost of preparing a tax return would be around $150.
The after-tax return, including the tax agent fee, is $1,980 or an after-tax return of 3.3%.
Is the OC materially better off financially after the investment? That is the question for the OC to answer.
Rod Laws | TINWORTH & CO RodLaws@tinworth.com
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Can
special levy funds be moved between the admin and capital works funds?
Can funds from a special levy held in the administrative fund be transferred to the capital works fund to cover related expenses, and would this be treated as a loan?
A special levy of $110,000 was raised four years ago and deposited into the administrative fund. In the first two years, $80,000 of that levy was spent from the administrative fund. In the third year, $15,000 was spent from the capital works fund for expenses related to the special levy.
Should $15,000 of the remaining $20,000 in the administrative fund be transferred to the capital works fund to reimburse that spend?
I believe this may be treated as an inter-fund loan under Section 76 of the Strata Schemes Management Act 2015.
Your situation is not uncommon.
When a special levy is raised, there is typically a specific purpose and amount assigned to that levy, which is noted in the minutes and on the levy notice. In an ideal world, there would be an income item for the special levy and a matching expense line item for the associated expenditure, all within the same fund. However, this is rarely achieved, and your situation is not uncommon.
The Strata Schemes Management Act 2015 does not require special levy income to be isolated for that specific expenditure over multiple years. In this instance, the remaining $20,000 from the special levy may have been consolidated into general revenue and expenses in the administrative fund.
Therefore, it comes back to what expense the special levy covered – if it was capital in nature, the owners corporation is not wrong to pay this from the capital works fund. Likewise, if the expense was administrative, it should be moved to the administrative fund (no Section 76 resolution is required).
If the balance of the special levy funds were depleted by consolidation into general revenue, then a transfer of the expense from the capital works fund to the administrative fund may cause the administrative fund to go into deficit. The remedies available for this are to make a transfer under Section 76 to replenish the administrative fund or raise a special levy.
Summary
• If there are special levy funds remaining in the administrative fund then the expense should be put in the administrative fund on the accounting principle of income and expense matching.
• If the expense is administrative in nature, then it should be paid from the administrative fund. If special levy income has been depleted then a Section 76 transfer resolution or further special levy may be appropriate.
• If the expenses is capital in nature and there are no special levy funds remaining then the expense should remain in the capital works fund.
What are committee members’ personal liability if they take no action to disclose or remediate major defects?
As committee members, what are our potential personal liabilities if we know about major defects and don’t disclose this information to our insurer or take any action to repair it?
We highly recommend not ignoring these matters because you will be responsible for decisions made by the insurer with regard to their decision/s in how they respond to a claim (in part, full, or denial), potential cancellation of a policy coverage and/or risk of placement of future cover by either the current or future insurers for past nondisclosures.
This may be getting into an insurance question, but we are all aware of the duty of disclosure. If you are aware of major defects, such as concrete cancer, even if the owners corporation is unable to meet the full repair costs immediately, you could put some temporary measures in place to prevent further damage or risk, such as spalling, from occurring.
We recommend consulting a professional for advice on mitigating safety risks, even if it’s a short-term solution. Stage two of the repair might involve a broader scope of fixing the problem, but we highly recommend not ignoring this matter because you will be liable.
Bruce McKenzie | Sedgwick bruce.mckenzie@au.sedgwick.com
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Can the owners corporation force an owner to remove the front screen door attached to their fire door?
Our fire company passed a screen door on a fire door as compliant but advised the door be removed. Can the owners corporation force the owner to comply?
Can the owners corporation force an owner to remove a screen door that is attached to their fire door? The fire company passed the door as compliant but strongly advised removing the door for fire safety reasons. The owner has stated that they would refuse to do this.
I think the security door is ok, unless…
The screen door wouldn’t be attached to the door. It would be attached to the frame, and it would most likely be external. It would be pedantic to defect it from the fire door perspective of it being attached to the fire door frame (although you could argue the door set has never been tested with a security door attached to the frame). Perhaps more significantly, the SOU door would swing inwards, and the security door would swing outwards, which means it may swing into a path of travel and pose a safety issue for people. Having a self-closer on it may reduce the risk to some degree, but you could still potentially hit someone with the door as they are trying to exit. However, this is a general safety concern and does not constitute a BCA non-compliance. This is because the relevant section (D2.20) applies to a “required exit” and not a “path of travel to a required exit.”
In short, I think the security door is ok, unless:
1. You want to be pedantic about it being attached to a rated frame without test approval or
2. The corridor it opens into is somehow considered part of a “required exit” (for example, a ground level corridor where the fire isolated stair discharges internally into that corridor).
Chris Chatham | LINKfire Chris.Chatham@linkfire.com.au
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If owners do not comply with a fob audit by the due date, can the owners corporation deactivate their fobs?
If owners do not comply with a fob audit by the due date, can the owners corporation deactivate their fobs?
My owners corporation would like to undertake an audit of access fobs to all apartments. They have requested all owners and residents cooperate.
They stated that if owners do not comply by the due date, the owners corporation will deactivate their fobs, obstructing access to the building, lots and elevators. Residents cannot enter or exit the garage without a fob.
When I purchased my apartment, I also purchased additional fobs. Does the owners corporation, via the facility manager, have the right to deny access to the building and my apartment?
The owners corporation has no legislative power to deny a lot owner access to their lot.
The owners corporation has no legislative power to deny a lot owner access to their lot. Access is a fundamental property right.
Arguably, the owners corporation could pass a by-law detailing how they will conduct and the consequences of failure to comply (e.g. fob deactivation). However, based on recent case law, such a by-law would likely be invalidated on the basis that it is harsh and/or oppressive
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“We Can’t Afford That”
How to Respond When Committees Push Back on Maintenance
It’s one of the most common responses strata managers and consultants hear when discussing building maintenance or remediation: “We can’t afford that.”
And it’s understandable as, construction prices are at an all-time high. Committees are under pressure from rising insurance premiums, levies, and cost-of-living increases. However, delaying essential works or preventative maintenance can often lead to far greater costs down the line.
So how do you respond effectively when a committee pushes back?
Defining a Clear Scope of Works
1. Reframe the Conversation
Start by shifting the language from cost to value and risk management. Rather than saying, “This work will cost $X,” position it as, “This is what it takes to protect your $10M asset.” Maintenance is not a luxury, it’s asset preservation.
2. Break It Down
Large numbers are overwhelming. Instead of delivering one high quote for a broad scope of work, break it into stages. Prioritise high-risk areas, urgent safety items, and time-sensitive insurance concerns. Phasing work can make it more palatable and allow for better planning.
3.
5.
Use Independent Advice
Independent reports and recommendations - especially from a third party like PASG can provide clarity and reduce decision fatigue. We’re here to simplify the process and work alongside committees to make informed, responsible decisions.
Cost overruns frequently stem from vague incomplete project scopes. When details are unclear, contractors may underquote and later issue expensive variation claims. PMs collaborate with engineers consultants to ensure that the scope is detailed complete before tendering. This precision minimises ambiguities and the risk of disputes.
Contracts That Protect You
Explain the Risk of Doing Nothing
Help committees understand the consequences of inaction:
• Greater non-compliance under DBPA or other regulations
At PASG, we understand the financial pressure committees face. But we also know that proactive maintenance isn’t just a cost, it’s a critical investment in the safety, value, and longevity of your building. Let’s make sure your building is protected, not postponed.
A well-drafted contract is another layer of financial protection. Project managers ensure contracts tailored to the specific remediation needs include clear terms for quality, timelines, payment schedules, and managing changes. This reduces risks and ensures accountability across all parties.
Using real examples or visual evidence from their own building can be very effective.
Ongoing Management and Oversight
4. Offer Solutions, Not Just Problems
Bring a plan, not just a problem. Whether it’s engaging a Project Manager (like PASG), arranging a site inspection, or mapping out a 3-year strategy, committees need structure. They’re more likely to engage when they feel supported and guided. Talk to the Team via info@pasg.com.au 1300 167 796
A PM’s job doesn’t end at contractor selection. oversee day-to-day operations, monitor progress, resolve issues, and approve work before payments are made. Their constant presence helps prevent disputes, delays, and substandard workmanship, protecting your investment from start to finish.
An Investment That Pays Off
Hiring a project manager isn’t an added cost—it’s strategic investment. The right PM can save far than they cost by avoiding expensive pitfalls ensuring the job is done right the first time.
How
can a four-lot strata scheme find a strata manager willing to take on small schemes?
How can a four-lot strata scheme in Sydney find a strata manager interested in small building strata management? Can small schemes improve their bargaining power when negotiating the management agreement?
How can a small four-lot strata scheme in Sydney find a strata management company interested in managing small lot schemes? Can a small scheme increase its bargaining power when negotiating a strata management agreement, given that strata management agencies may consider the business of managing small strata schemes to be relatively unimportant and the agency isn’t interested in considering changing any of the clauses in their agreement?
The key to resolving this issue is identifying the right fit in the first instance. If you’re with a company that specialises in smaller buildings, you will receive the right level of care from that strata management company.
We frequently encounter this question. The simple answer is that you’re probably with the wrong agency. At the end of the day, strata management companies are a business and the purpose of a business is to make profit. In doing so, they are required to define their “wheelhouse”. For some companies, up to 25 lots is their specialty. Some choose to manage mid-sized buildings, or they may specialise in large, complicated buildings.
If your owners corporation is currently with a strata management company that primarily operates in the large and complex market, they’re likely receiving more remuneration from the larger buildings on an annual basis, so they will likely be inclined to give these clients more attention.
If you’re with a company that specialises in smaller buildings, you will receive the right level of care from that strata management company. It’s all about identifying the right fit within the market. Sometimes, this is a difficult thing to do.
Consider using a tendering company or relying on recommendations from a lot owner in a similar-sized building or something to that effect. Do your research and make sure you’re in a relationship with the right organisation..
How do we convince all owners to obtain independent advice regarding updating our old, outdated by-laws?
How can we persuade all owners to seek independent advice on updating our outdated bylaws? Does NCAT have the authority to make an order to update by-laws? We have the original ‘no pets’ by-law in place from the 1960s, and the committee will not consider updating it, although there are plenty of pets in the building.
Put a motion on the general meeting agenda that the owners corporation has its by-laws independently reviewed.
You need to update them. Within 12 months of the Strata Schemes Management Act commencing on 30 November 2016, there was a requirement that all by-laws be reviewed because things change over time. A by-law that I pass today might not be valid in 20 years because of case law or other circumstances.
It is an excellent idea to review your by-laws. If you don’t get legal advice, go through by-law by by-law. Ask, “This one relates to parking. Do we have any parking issues? What are they? What could be a good rule to address that? What’s reasonable in this circumstance?”
Ideally, get independent legal advice, and that person giving the legal advice would then provide recommendations and, perhaps, motions to amend the by-laws.
The easiest way to get committee buy-in is to point out that if you look at your clothes from 20 years ago, you wouldn’t wear them today.
Can NCAT make an order that the by-laws have to be reviewed? Well, NCAT has broad power under Section 232 of the Strata Schemes Management Act 2015. The broad part of that power relates to settling disputes where the owners corporation has failed
to exercise a function or hasn’t exercised it properly, such as a failure to review its bylaws or a failure to perform its functions. If the owners corporation has not done this within 12 months of 30 November 2015, then yes. However, NCAT would ask why you’ve waited so long to make a claim.
Place a motion on the general meeting agenda for the owners corporation to have its by-laws independently reviewed. If the motion is voted down, pick a dispute about, say, the pet’s by-law because there is very good case law around that now.
Should short-term rental guests have access to the window restrictor key?
Should short-term rental guests in strata buildings have access to the restrictor key to open windows fully?
Should short-term rental guests (e.g., an Airbnb guest for two nights) staying in a NSW multistorey strata unit have access to the restrictor key so they can open the window fully?
Some bookings may only be for adult occupants, or they may accept the responsibility for supervising children near the windows.
The responsibility still falls on the owners corporation (and in turn, the lot owner) to ensure safety standards are met and maintained.
Anthony Shakar, ASQB:
While the law does not specifically address short-term guest access to restrictor keys, the responsibility still falls on the owners corporation (and in turn, the lot owner) to ensure safety standards are met and maintained.
Providing a restrictor key to short-term guests is not recommended for the following reason:
• Risk of non-compliance: If a guest unlocks the window restrictor and forgets to lock it again, the window may no longer meet safety rules. This can lead to legal or insurance problems for the strata.
• Supervision doesn’t remove the risk: The safety laws still apply no matter who is staying in the unit — even if there are no children or the guest agrees to be careful. The rules must be followed at all times.
• Guests may not follow the rules: Unlike permanent residents, short-term guests might not know or care about the safety requirements. They’re also unlikely to make sure the restrictor is locked again before they leave.
However, this answer is only the opinion of ASQB. It should not be taken as legal advice.
Tyrone Shandiman, Strata Insurance Solutions:
We are not aware of any insurers currently imposing specific exclusions relating to the presence or use of child-safe window restrictors.
If a claim were to be made against the owners corporation, the insurer would generally respond subject to the terms, conditions and exclusions of the policy. In such a case, the insurer would typically manage the claim on behalf of the owners corporation, which may include mounting a robust defence — for example, where they believe the owners corporation is not liable and that responsibility rests with the lot owner.
The owners corporation must take all reasonable steps to comply with relevant legislative safety requirements. While we cannot provide legal advice, insurance is ultimately a fallback in the event of a worst-case scenario. Ensuring appropriate safety measures are in place — and maintained — helps reduce the likelihood of an incident occurring and the risk of liability arising in the first place.
If the neighbour above wants to access my lot to renovate their bathroom, am I required to provide access?
The neighbour above wants to cut holes in my ceiling to upgrade their bathroom. Am I required to provide access? How do I ensure the neighbour leaves my lot in the same condition?
The neighbour in the unit above wants to access my lot and cut holes in my ceiling to relocate plumbing pipes and upgrade their bathroom. Am I required to provide access, given that these works are improvements rather than repairs? What are my rights, and if required to provide access, how can I protect my interest to ensure the neighbour leaves my lot in the same condition? Should I be concerned about future damage?
An access deed or licence can deal with the rights and responsibilities of both parties.
If the works were repair and maintenance to common property and the owners corporation was seeking access, you would have to consider providing access. If you did not provide access, the owners corporation could seek orders in the NSW Civil and Administrative Tribunal (NCAT). The owners corporation would likely be successful in obtaining orders, especially if there were no other ways in which the works could be undertaken.
As this is a request for access from a lot owner for upgrade works, there is no requirement for you to provide access. There is no mechanism under the Strata Schemes Management Act 2015 in which a lot owner can seek orders for access against another lot owner to undertake renovation works. Whilst there may be avenues under the Access to Neighbouring Lands Act 2000, it is always better to avoid litigation and come to an agreement. You should consider doing the neighbourly thing. This may mean providing access under an access deed or licence. The deed or licence can deal with the rights and responsibilities of both parties, including make good requirements, duration, etc.
Remember, the lot owner undertaking works will also need authorisation from the owners corporation to undertake works to common property. This would normally be in the form of a registered by-law
If works are required to lot property, or the owner wishes to install something in your lot, an easement would be required.
Matthew Jenkins | Bannermans Lawyers enquiries@bannermans.com.au