Issuu

The NSW

STRATA MAGAZINE AUGUST 2026

Do we get insurance commission rebated if it’s banned?

Page 8 | Strata Insurance Solutions

Should a committee member with a conflict abstain from voting? Page 22 | Tender Advisory

Balconies, windows and water ingress: Who pays for repairs? Page 26 | MJ Engineering

About Us Welcome to the latest issue of The LookUpStrata Magazine! For over a decade, LookUpStrata has been Australia’s premier resource for everything related to strata living. Our mission is to keep strata communities informed and connected, providing thousands of lot owners, strata managers, and professionals with reliable, unbiased, easy-to-understand information to help you solve your strata problems and make informed decisions. The NSW Strata Magazines, published monthly, are just one of the many ways we’re dedicated to supporting you. They’re packed with articles from industry experts and include our comprehensive printable strata directory.

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Advertising and Admin Enquiries: administration@lookupstrata.com.au Disclaimer: The information contained in this magazine, including the response to submitted questions, is not legal advice and should not be relied upon as legal advice. You should seek independent advice before acting on the information contained in this magazine. Strata legislation is updated regularly. The information in this magazine is based on the legislation at the time of publishing.

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Contents 4

an the underfloor space in my duplex C be sold to the other owner?

Sean Bermingham, The Strata Collective

Leanne Habib, Premium Strata

eet the Lannock NSW team: Helping M owners corporations fund capital works

o we get insurance commission D rebated if it’s banned?

ow do we set up a proper email H system for our strata committee records? Leya Wall, Town Square

hen is the deadline for holding the W AGM? Megan Parkins, Tender Advisory

ho pays for a leak from a past W unauthorised renovation? Matthew Lo, Kerin Strata Lawyers

an a pecuniary interest stop an owner C from voting? Sean McNamara, Select Strata Reports

an a co-owner block a councilC approved garage renovation

an a pre-2003 caretaker deal escape C the 10 year cap? Paul Wiseman, Bannermans Lawyers

Tyrone Shandiman, Strata Insurance Solutions

hould a committee member with a S conflict abstain from voting? Megan Parkins, Tender Advisory

Lannock Strata Finance

an an owner remove a long-serving C strata committee member?

alconies, windows and water ingress: B Who pays for repairs? Danny Joseph, MJ Engineering

hould strata committees plan S maintenance instead of reacting? Hugh McCormack, McCormacks Strata Management

an committee members be liable for C misleading owners? Matthew Jenkins, Bannermans Lawyers

oes a split committee vote pass a D motion? Jana Antelmann, Strata Life

The NSW LookUpStrata Directory

Tim Sara, Sara Strata

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Can the underfloor space in my duplex be sold to the other owner? Is the underfloor space in our 2 lot scheme common property? What can we do if it has been sold to another owner? I live in a self-managed 2 lot scheme in NSW. One lot sits above the other, and I live on the bottom. The lot above me was recently sold, and it appears that the underfloor space below me has been marketed and sold to the new owners as a cellar. I do not have access to the underfloor space, but the other owners do. Is the underfloor space considered common property? What can I do about this situation?

Underfloor space is likely common property if it falls outside the lot boundaries on the strata plan. Access alone doesn’t determine ownership. In NSW strata schemes, common property is effectively the default position. Anything outside the cubic airspace boundaries of a private lot, as shown on the registered strata plan, is generally considered common property unless clearly stated otherwise, regardless of who has physical access to it. Here, the strata plan appears silent on the underfloor area, which strongly suggests it is common property, particularly if it falls outside the boundaries of the upper lot’s defined airspace. The first and most important step is to review the registered strata plan to confirm this. In many older twolot schemes, boundaries can be difficult to interpret without professional assistance, particularly for undercroft storage, roof voids, basements, or subfloor spaces.

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If the area is common property, it cannot be privately sold, marketed, or exclusively used by one owner without the proper legal process, and problems commonly arise when such a space is advertised during a sale as though it forms part of the lot despite not being on the strata plan or title. Common property belongs to all lot owners collectively, in proportion to their unit entitlements, and cannot simply be appropriated or sold by one owner for private benefit without formal approval and legal documentation.

Practical next steps

1. O btain a copy of the registered strata plan and review the lot boundaries. If unclear, get advice from a strata lawyer or registered surveyor. 2. A sk the other owner how the area was represented during the sale, did the contract, marketing material, or agent describe the cellar as part of the lot? 3. C heck whether an existing by-law grants exclusive use of the space. In many cases, none exists. 4. G oing forward, the OC can formalise use either by an exclusive use by-law (which may require compensation reflecting market value), or by a full strata subdivision with updated plans, amended titles, and a general meeting resolution if ownership is to transfer permanently. 5. C heck the development consent and any planning conditions before any use or conversion as a cellar, since council consent or other approvals may still be required even if the OC agrees to grant exclusive use or sell the area. Leanne Habib | Premium Strata info@premiumstrata.com.au READ MORE HERE

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Meet the Lannock NSW Team Helping Owners Corporations fund capital works

Charlotte, Michelle and Keith answer the questions Owners Corporations ask most. Insurance pressure, emergency works, repair orders and the real cost of waiting. Lannock’s NSW team speak with Owners Corporations every day. Charlotte, Michelle and Keith bring years of experience to conversations about funding for projects that protect and enhance asset values. When you send in a funding enquiry in NSW, one of them will pick it up. And they stay on the case for the life of the loan. Here’s what they’re seeing across the state. A commercial property and business broker before joining Lannock, Charlotte brings commercial acumen and extensive client-management experience to helping Owners Corporations navigate funding decisions with clarity and confidence. Michelle started her career in tertiary education before moving into strata a decade ago. No two Owners Corporations or projects are the same, and this background in education shows: she meets each scheme at its level of knowledge and gives clients what they need to make a sound, informed decision. Keith has a decade’s experience in NSW strata, building on his earlier grounding in UK property management. This, plus a business degree, gives Keith an insider’s perspective on the challenges faced by Owners Corporations.

Topic

Key Takeaways

What are the most common challenges NSW Owners Corporations face today?

Charlotte: Across the board, we’re seeing more urgent works. Insurers are cracking down on any delays in dealing with known issues and defects. Owners Corporations must be actively working towards getting these fixed to keep their cover - and completed works can bring premiums down. Michelle: We see anything from what you’d call general repairs – balcony and roof, most often - to fire safety compliance orders. Owners Corporations are facing an increase in emergency repairs that wouldn’t be an emergency if it had been dealt with earlier. Keith: A lot of buildings out there have been sitting on known issues and defects. Owners Corporations have held off raising levies over the past few years to avoid adding financial pressure on owners. That hesitation is understandable with rising construction costs and the cost of living generally since the pandemic. But the underlying issues that need to be fixed haven’t gone away.

How do you help committees and strata managers work through a funding decision with confidence?

Michelle: It’s all about personal contact and being hands on from start to finish -attending meetings, answering technical questions and offering resources like LevyPlanner. That’s a tool to calculate and compare funding options, so Owners Corporations can assess which solution best suits their scheme and objectives. Charlotte: It’s important to have emotional awareness and know the temperature of the room before you arrive. Some owners want to proceed with works, others have objections and some are indifferent. We aim to help everyone focus on the best commercial outcome for the scheme. Keith: For me, having worked as a strata manager is a big help. I understand the situation from both sides, and having managed many schemes through similar challenges does give owners a lot of confidence in the guidance they’re getting.

What is the misconception about strata loans you hear most and how do you set it straight?

Keith: That it’s too expensive, or that the whole idea of a strata loan is scary. We need to explain that with most remediation works, the maths runs the other way. Putting things off will end up costing more down the track than the cost of borrowing now. Contractor quotes have short expiry dates, so hesitation now usually means a higher quote later. Strata finance lets committees lock in today’s price instead of waiting while raising funds from owners. Charlotte: People think the strata loan is to the individual lot owner. The borrower is actually the Owners Corporation, which is a standalone legal entity. Most owners are familiar with mortgages and personal loans, so this can take a moment to click. The loan sits with the scheme, and the Owners Corporation services the loan through levies. If an owner sells, the obligation to pay off the loan through future levies passes to the buyer at settlement. We’re here to walk our clients through the nuances. Michelle: The finer details and long-term benefits of strata finance aren’t common knowledge. That uncertainty can lead to delays that only make the problem worse. Once owners understand the flexibility of the loan and how interest is only paid on the funds actually drawn down (not the full approved amount) most of these concerns fall away.

What makes Lannock Strata Finance different when it comes to supporting clients?

Keith: Longevity. We’ve got the most experience and the largest and most diverse team with different backgrounds and skillsets. After more than 20 years in strata finance, our team has seen almost every scenario a building can face. Michelle: Across our broader team and network, there’s always someone with experience in and knowledge of whatever a client is facing. That’s what builds trust and confidence over the long term. Charlotte: More than 20 years after creating the first strata loan, we are still innovating. Our new tool, LevyPlanner, is a key example of how we find new ways to help clients. LevyPlanner gives Owners Corporations visual, customised data on long-term budgeting and one-off project funding. They can compare options and find the optimal mix for their specific needs and objectives.

Keith Hallet

Business Development Manager NSW

P 0432 043 679 E keith@lannock.com.au Michelle Malpass

Business Development Manager NSW

P 0432 091 786 E michelle@lannock.com.au Charlotte Steen

Business Development Manager NSW

P 0460 329 701 E charlotte@lannock.com.au

Visit LevyPlanner.co.au to try it for free today.

Do we get insurance commission rebated if it’s banned?

Our renewal contract still mentions insurance commission. If the NSW government does ban commissions, would we get a refund? What is happening with insurance commissions in NSW? Our strata management company’s renewal is due. We notice their new contract still includes insurance commission. If we sign the contract and insurance commissions are banned, do we get the commission rebated?

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No, insurance commissions haven’t been banned in NSW, but disclosure rules have tightened. Insurance commissions have not been banned in NSW. The legislative changes that commenced in February 2025 introduced greater transparency around insurance remuneration, rather than prohibiting commissions. There is, however, an important change. Under the Property and Stock Agents Regulation 2022, a strata management agreement cannot entitle a strata manager to receive an insurance commission where the owners corporation obtains the insurance quotes and arranges the insurance without the strata manager’s assistance.

If your strata manager assists with arranging the insurance, commissions may still be payable, subject to the terms of the management agreement and the required disclosures. If you sign the agreement now and the law changes in the future to prohibit insurance commissions, you would not generally expect commissions already paid under a valid agreement to be refunded unless the legislation specifically provided for retrospective refunds, which would be unusual. If your strata manager is an SCA (NSW) member, you may also wish to ask why the new agreement still refers to insurance commissions, as SCA (NSW) has adopted a commission-free model for its members. This is an industry initiative rather than a legislative requirement.

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances and the specific coverage afforded under their policy wording. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687. Tyrone Shandiman | Strata Insurance Solutions tshandiman@iaa.net.au READ MORE HERE

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When is the deadline for holding the AGM?

Is there a legislative requirement for when an AGM must be held in relation to the financial year end? The end of the financial year for my building is 30 June. The AGM date for this year is 14 October, which is three and a half months after the end of the building’s financial year. I thought an AGM should be held within two months of the scheme’s financial year end. Is there a legislative requirement under the Strata Schemes Management Act 2015 (the Act) for the timing of the AGM in relation to the building’s financial year end?

No, there is no specific legislative requirement for when an AGM must be held relative to the financial year end in NSW. While it is considered practical accounting best practice to hold the Annual General Meeting before the closure of the first quarter of a new financial year (i.e. within the first three months), there is not actually a specific legislative requirement for this in the Act.

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Part 2, Division 3, section 18 of the Act only stipulates that an owners corporation must hold an annual general meeting once in each financial year of the corporation. The two month requirement contained within the legislation applies to the First Annual General Meeting (FAGM) and, as there is an overlapping obligation for an owners corporation to submit an annual return online via the NSW Strata Hub within three months of holding their Annual General Meeting, both of which contribute to the confusion around this item. Megan Parkins | Tender Advisory megan@tenderadvisory.com.au READ MORE HERE

How do we set up a proper email system for our strata committee records?

How do we set up a shared email system that reliably captures out of meeting decisions and gives owners a clear way to contact the committee? Our strata committee meets only once per year. All communication between members and decisions made are conducted via private email. Unless the owners corporation manager is included, these emails do not form part of the strata record. How do we set up a shared email system to ensure decisions are part of the strata record and to assist owners and occupiers to contact the committee?

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A purpose-built strata communications platform creates an audit trail, keeps correspondence accessible to all committee members, and gives owners a consistent point of contact. Really common pain point, and a great example of where the right technology solves two problems at once. Refer to your owners corporation manager (OCM) on the compliance and record-keeping requirements in your state.

Regarding the technology, the first problem is internal. Decisions via private email mean no shared record, no visibility, and no audit trail. When a committee member leaves, that history goes with them. The second problem is external. Owners have no clear, consistent way to reach the committee. That creates frustration and a feeling of being shut out. What you’re really looking for is a shared, structured communication layer, something that sits between private inboxes and the formal strata record. For me, the answer here is a purpose-built strata communications platform. Three things to look for: does it create a clear audit trail, can multiple people access it without it living in one person’s inbox, and does it give owners a professional and consistent way to make contact. Loop in your OCM on the compliance piece, but the conversation about the communication infrastructure is worth having now.

Leya Wall | Town Square Leya.Wall@townsquare.au READ MORE HERE

Who pays for a leak from a past unauthorised renovation? Who is liable for a failed waterproofing membrane from an unauthorised renovation after the lot has been sold?

the boundaries described on the floor plan relating to the lot, in the way prescribed by the regulations, by reference to a wall, floor or ceiling in a building to which the plan relates or to common infrastructure within the building.

If a lot owner renovates a bathroom without the owners corporation’s approval or knowledge, and later sells the lot, who is responsible for the repair costs if the waterproof membrane fails? There was no by-law put in place at the time, as the owners corporation was unaware the renovation was occurring. Time has passed, the lot has since sold, and the shower now leaks.

In summary, pursuant to the SSDA, walls, floors, and ceilings which enclose a lot are common property. section 106 of the Strata Schemes Management Act 2015 (NSW) (“SSMA“) prescribes that an owners corporation has the obligation to “properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation” and “must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation.”

Is the owners corporation responsible for the repair, or does the unauthorised nature of the original renovation mean the current owner can be held responsible? What about any damage to the unit below caused by water coming through the ceiling? Does a dispute like this sit with NCAT?

The unapproved renovation is the previous owner’s liability, not the current owner’s or the owners corporation’s. Pursuant to section 4 of the Strata Schemes Development Act 2015 (NSW) (“SSDA“) common property “in relation to a strata scheme or a proposed strata scheme, means any part of a parcel that is not comprised in a lot (including any common infrastructure that is not part of a lot).” section 6(1) states that: For the purposes of this Act, the boundaries of a lot shown on a floor plan are— 1. except as provided by paragraph (b)— a. f or a vertical boundary in which the base of a wall corresponds substantially with a base line—the inner surface of the wall, and b. f or a horizontal boundary in which a floor or ceiling joins a vertical boundary of the lot— the upper surface of the floor and the under surface of the ceiling, or 14 www.lookupstrata.com.au

In the scenario given by the enquirer, the lot owner had alleged changes to the common property of the owners corporation without approval. The SSMA states that unless the works are cosmetic works (c.f. section 109), works to common property require approval from the owners corporation (c.f. sections 108 and 110.) Additionally, the lot owner allegedly damaged common property in the performance of the unapproved works. There is a general law principle that if one party (e.g. a lot owner) damages the property of a second party (e.g. the owners corporation), the second party can seek recovery of the damages from the first party. Nothing in the SSMA changes that general law principle: c.f. The Owners – Strata Plan No. 37762 v Pham [2006] NSWSC 1287 at [76]. That it was a previous lot owner that caused the damage is not a matter for the owners corporation. Their claim would be against the owner of the relevant lot. The present lot owner may have a claim against the previous lot owner, but I am unable to consider that with only the information given in the enquiry, and I’d encourage the enquirer to seek legal advice. Matthew Lo | Kerin Strata Lawyers matthew@kerinstratalawyers.com.au READ MORE HERE

Can a pecuniary interest stop an owner from voting?

Can an owner be excluded from voting at a general meeting on the grounds of a pecuniary interest? The Act is very clear about disclosing a pecuniary interest for committee members, but it’s silent when it comes to owners corporation meetings. Can an owner be excluded from voting at an owners corporation meeting on the grounds of a pecuniary interest?

The Act is largely silent on pecuniary interest at general meetings, but owners should always consider the collective good, not just their own. This is an interesting aspect of the Strata Schemes Management Act 2015 (the Act) regarding the relationship between an owners corporation generally and the strata committee. Some things discussed in relation to the owners corporation are not discussed in relation to the strata committee, and vice versa. Other than the original owner (and potentially parties connected to the original owner) and strata and building managers, the Act is relatively silent on pecuniary interests of owners at general meetings, perhaps that is because there is an understanding that all owners have some sort of pecuniary interest in the decisions of the owners corporation which would be hard to legislate out of.

That said, I personally think it would be worthwhile reminding owners (at least generally) that when they are considering items at a general meeting, they might well be doing so as members of a collective, and not only in their own self-interest. This omission does allow owners to vote on their own proposals (in which they have an inherent, and likely obvious self-interest, for example, by-laws conveying rights to their lot), and I’m not sure I’d advocate for a removal of such a right. However, I feel this is a very good introduction to my general observation that all owners should interest themselves in the management of their scheme, and that they not simply accept at face value the information (or sometimes just opinions) being put forward by any one owner or bloc of owners (whether committee members or not) or the strata manager. They should form their own view on what actions they consider are not only in their own best interests within that collective, but also what is best for the wider collective. To be explicit, it is my very strongly held belief (backed by my experiences as a strata owner and strata manager) that when as many owners as possible Act in the interests of the collective, all owners benefit. The lived experience of many in strata is very far from that ideal, but I’m not sure what legislative steps could be taken to ensure it is followed. Sean McNamara | Select Strata Reports sean@selectstratareports.au READ MORE HERE

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Can a co-owner block a council-approved garage renovation My other duplex owner agreed to a council-approved garage renovation but is now refusing to proceed. What are the options? We live in an equal dual occupancy apartment. The other owner agreed and signed the submission to council to renovate the common property garage. They now say that they don’t want to go ahead with the renovation even though it has been approved by council. We desperately want it done as parking is extremely difficult. Are they obliged to complete the renovation of the garage? They won’t discuss the situation at all and say no. What are our options?

Council sign-off is not strata approval, but a truly unreasonable refusal can be tested at NCAT. Council approval and strata approval are two different things You’re dealing with two separate approvals, and only one has happened. A development application signed by both owners and consented to by council is planning approval. Because the owners corporation (OC) owns the common property, council will usually require it to sign off before a DA affecting common property can be lodged. That signature is an administrative planning step. It is not the approval strata law requires, and it does not commit your co-owner to proceed with, fund, or complete the works.

What strata law requires

Renovating a common property garage is a change to common property. Under section 108 of the Strata Schemes Management Act 2015, an owner or the OC may alter or add to common property to improve or enhance it, but only if a special resolution has first been passed specifically authorising the particular action proposed. If the renovated garage is for one lot’s exclusive use, you also need a common 18 www.lookupstrata.com.au

property rights by-law (sections 142–143), passed by special resolution and registered with NSW Land Registry Services. So first, check your scheme’s records: has a special resolution been passed, and, if exclusive use is involved, has a by-law been made and registered? If yes, the works are authorised, and this becomes a question of carrying them out. If no, read on.

Don’t assume the vote is locked

Voting on a special resolution is counted by unit entitlement, not by the number of owners. The resolution fails only if owners holding more than 25% of the aggregate unit entitlements vote against it. Before assuming you’re stuck, check the schedule of unit entitlements on your registered strata plan. If your lot carries more than 75% of entitlements, you may be able to pass the resolution without her supportive vote. If entitlements are equal, you can’t, and that’s where the Tribunal comes in.

A refusal is not necessarily the end of the road

Where consent is refused, that refusal can be tested at NCAT. Two pathways apply, depending on how the works are characterised: • If the works grant you exclusive use of, or special privileges over, the common property garage, and the OC unreasonably refuses to make the by-law, you can apply under section 149. NCAT may make an order that takes effect as though it were the by-law. • If the works are better described as a minor renovation, alteration or repair to common property directly affecting your lot, and consent is unreasonably refused, you can apply under section 126 for an order requiring the OC to consent. Both turn on a single question: was the refusal unreasonable? The Tribunal must weigh the interests of all owners, and “unreasonable” carries its ordinary meaning, shaped by established case law. A refusal backed by no genuine, articulated reason, simply “no, I won’t discuss it”, is the kind a

tribunal may well find unreasonable. But it is not automatic: the Tribunal will also weigh any legitimate concerns your co-owner holds, such as cost, disruption, or future maintenance liability, and refusals have been upheld as reasonable on their particular facts.

3. P ut the motion properly at a general meeting (special resolution, and a by-law if exclusive use is involved), so her position is formally recorded. You need that refusal on the record before you can run a section 126 or 149 application.

What are the other owner’s obligations?

4. Attempt mediation through NSW Fair Trading, which is a prerequisite for most NCAT applications.

They are under no positive obligation to build or complete anything, and signing the council DA created none. But their power to block is not absolute. If their refusal of consent is unreasonable, you can ask NCAT to authorise the works over her objection under section 126 or 149, and the Tribunal can also specify who carries the ongoing maintenance of the renovated garage.

Practical next steps

1. Check your registered by-laws and meeting records, confirm whether the works are already authorised.

5. I f it remains unresolved, take advice on an NCAT application under section 126 or 149, focused on whether her refusal is likely to be found unreasonable. As always, work from your scheme’s own registered by-laws rather than the model bylaws, and given the two-lot dynamic, get advice specific to your scheme before lodging anything. Tim Sara | Sara Strata tim@sarastrata.com.au

2. Check the schedule of unit entitlements, establish whether you can pass the resolution yourself.

READ MORE HERE

Should a committee member with a conflict abstain from voting?

Should a committee member with a vested interest abstain from voting, and should the strata manager enforce this? Regarding a strata committee member proposing a motion they have a vested interest in, which may constitute a conflict of interest: the legislation mentions a maximum penalty of 10 penalty units, which I understand to be $1,100.00. However, the legislation doesn’t clearly explain how a lot owner can instigate action when a committee member has breached Part 15 of Schedule 2 of the Strata Schemes Management Act 2015. Could someone provide the steps required to implement this course of action? Should the strata manager have advised the committee member to abstain from voting on their own motion? What happens if the strata manager fails to do so? Are they in breach of their statutory obligations, and if so, what are those breaches and under which legislation?

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The strata manager cannot restrict voting unless instructed to do so by the committee. The statutory requirement under schedule 2, clause 18 is for the impacted strata committee member to declare any pecuniary interests to the broader strata committee. It is then up to the strata committee to determine how the interest is handled, by way of majority vote, i.e. whether the particular committee member should abstain or otherwise. However, this is not a set requirement under the legislation. Further, while the strata manager is required to maintain an accurate record of any disclosures which may occur, they are not empowered to restrict voting on any matters unless this is the instruction of the strata committee. Megan Parkins | Tender Advisory megan@tenderadvisory.com.au READ MORE HERE

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Can a pre-2003 caretaker deal escape the 10 year cap?

Is a caretaker agreement that’s been extended by deeds since 2003 still bound by the 10 year contract cap? We have a caretaker agreement which has been extended by 10 year deeds since 2003 without going to tender. The strata committee feels legally pressured to keep it in place by the caretaker. The last deed was signed in 2022 and before that, in 2016.

2. U nless it expires or otherwise ceases to have effect earlier, a caretaker agreement (including any additional term under any option to renew it) expires: a. at the conclusion of the first annual general meeting of the owners corporation, if the agreement was executed by the original owner, or b. when 10 years have expired after it commenced to authorise the caretaker to act under it, in any other case.

I understand that the 10 year rule was introduced in 2015, so can a lot owner like me complain to NCAT and have the agreement/deed terminated retrospectively to the 2016 deed?

However, clause 12 of Schedule 4 contained transitional provisions which preserved certain pre-existing agreements:

A pre-2003 caretaker agreement stays protected from the 10-year cap unless materially varied since.

1. A ny agreement that was in force immediately before the commencement of Part 4A of Chapter 2 that, if entered into after that commencement, would be a caretaker agreement is taken to be a caretaker agreement appointing a caretaker. a. section 40B(2) does not apply to such an agreement, and

Any caretaking agreement entered into after 10 February 2003 (including any option periods) will automatically expire 10 years after commencement unless it terminates earlier in accordance with its terms. The only circumstances in which legacy issues generally arise are where agreements were entered into before 10 February 2003 and contain multiple extension or renewal options. The 10-year cap was introduced on 10 February 2003 through the insertion of section 40B(2) of the Strata Schemes Management Act 1996: 40B 1. A caretaker is required to be appointed by an instrument in writing (a caretaker agreement) executed before or after the strata scheme commenced by the caretaker and:

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Accordingly, agreements that were already in force before 10 February 2003 were protected from the operation of the 10-year cap. The transitional provisions in the Strata Schemes Management Act 2015 did not displace these earlier savings provisions.

The Specific Query

The query does not clearly identify the relevant factual circumstances. In particular, it is unclear whether: • the agreement was originally entered into before 10 February 2003 and the subsequent extensions have merely involved the exercise of existing options; or • a new agreement has been entered into at some point since then.

If the agreement remains a pre-2003 agreement and the subsequent terms arise solely through the exercise of options contained in that original agreement, the agreement will generally continue to benefit from the transitional protection and remain effective. However, if there has been a material variation to the agreement after 10 February 2003, such as the addition of further renewal options or other changes that materially increase its duration, the agreement will no longer be treated as a protected pre-2003 agreement. In that circumstance, the agreement would expire 10 years after the relevant variation, regardless of any purported exercise of options thereafter. This principle was considered by Darke J in Australia City Properties Management Pty Ltd v The Owners – Strata Plan No 65111 [2020] NSWSC 1505. His Honour’s reasoning begins at paragraph 41 and includes the following observations at paragraph 50:

“…it is difficult to discern a legislative intention that where such an agreement is later varied so as to increase its duration (even substantially so), the agreement so varied should nonetheless continue to be protected from the strictures of s 40B(2), and exposure to challenge under s 183A on the basis of its duration. Indeed, that seems to me to be contrary to the evident aim of the amendments.” Accordingly, the critical issue is whether the agreement has remained unchanged since before 10 February 2003, with only the exercise of existing options, or whether it has been materially varied since that date. The answer to that question will determine whether the transitional protection continues to apply. Paul Wiseman | Bannermans Lawyers enquiries@bannermans.com.au READ MORE HERE

ABN Lift Consultants Elevation by Design

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MJ Engineering Projects

Specialist remedial engineering for strata buildings, from defect diagnosis and design through to delivery and completion

Find out more

For full article — click here

Balconies, Windows and Water Ingress: Who Pays for Repairs? It starts small. A stain spreads across a ceiling. Paint bubbles near a window. Then comes the question that derails every strata meeting: who pays? Most of the conflict comes from a single misunderstanding, and it is an easy one to make. People assume responsibility follows the damage: if water appears in your lot, it must be your problem. Buildings don’t work that way. Water travels through slabs, wall cavities and structural junctions before becoming visible. By the time a stain appears, the source may be metres away: • A ceiling stain caused by failed balcony waterproofing above. • Moisture around a window traced to defective external sealing. • Bubbling paint caused by a failure at an external wall junction.

Each looks like an internal problem, but the defect actually lies elsewhere.

Start with the Documents, Not Assumptions Responsibility is defined by documentation, not intuition. Before any conversation about cost or blame, review: • The Strata Plan • Registered by-laws • Any common property rights by-laws • The adopted common property memorandum Under the Strata Schemes Management Act 2015 (NSW), the general rule is that the owners corporation maintains common property, but exceptions are common, particularly for balconies and windows.

How balconies and windows are usually treated Element

Usually Responsible

Original balcony tiles & waterproofing system Owner-installed decking over original tiles

Owners Corporation Lot Owner

Original windows & seals

Owners Corporation

Owner-replaced windows

Lot Owner

Structural components

Owners Corporation

Structures added within the lot boundary

Lot Owner

Building envelope (façade, flashings, junctions)

Owners Corporation

This is a guide, not a rule. Every scheme must still be assessed against its own strata plan and by-laws.

Ready to take action? Whether you are dealing with a building issue, planning remedial works or seeking independent advice, our team can help you assess the problem and determine the right next steps.

1800 953 935

info@mjengineeringprojects.com.au mjengineeringprojects.com.au

Find out more

The damage you can see is rarely where the problem actually lives. Ready to take action? Whether you are dealing with a building issue, planning remedial works or seeking independent advice, our team can help you assess the problem and determine the right next steps.

When Responsibility Shifts to the Lot Owner

Frequently Asked Questions

Owner modifications change the picture. Decking installed over original tiles, owner-replaced windows or structures added within the lot boundary may shift both the repair cost and ongoing maintenance responsibility to the lot owner. The scheme’s documented history matters as much as the building itself.

If water damage appears inside my lot, do I have to pay? Not necessarily. The source of the defect may sit within common property, even when the visible damage is inside your lot.

Diagnose First, Allocate Second

Can an owners corporation refuse to investigate a water leak? Generally no. Where common property is reasonably suspected as the source, the owners corporation has a duty to investigate. Refusing to investigate is often what turns a manageable repair into a formal dispute.

Skip the diagnosis and you end up paying for repairs that don’t fix anything. A reliable process looks like this: • Investigate to locate the actual source of ingress • Map how water is travelling through the structure • Confirm responsibility against the strata plan and by-laws An engineering-led inspection separates symptoms from the true source, clarifies responsibility and provides a targeted repair scope. Legal advice still matters when responsibility is contested, but the strongest legal position is one supported by clear technical findings, not assumptions.

Who pays for the investigation? In most cases, the owners corporation funds the initial investigation when common property is suspected. If the defect is later confirmed inside a lot or relates to an owner modification, cost recovery may follow.

The Bottom Line Most strata water ingress disputes come back to one distinction: where the damage appears versus where the defect actually exists. Get that right, review the scheme documents, and most disputes resolve quickly or never start at all.

By Danny Joseph Senior Remedial Engineer

If you’re facing an unclear case, MJ Engineering Projects can provide an independent inspection, identify the defect pathway and prepare a practical scope of rectification, so the next step is the right one.

Registered Design Practitioner specialising in façade, waterproofing and structural remediation

Contact Us Specialist remedial engineering for strata buildings, from defect diagnosis and design through to project delivery.

Full article

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info@mjengineeringprojects.com.au mjengineeringprojects.com.au

Should strata committees plan maintenance instead of reacting?

Is there a requirement for strata managers or committees to have a planned maintenance schedule?

There’s no legal requirement for a preventative maintenance schedule, but adopting one is widely considered best practice.

I recently moved into a pre-1980s strata complex that needs regular building maintenance. The committee and strata manager appear to be working reactively, organising expensive engineers when items become major, rather than using local trades to maintain the property.

There’s no requirement to have a preventative maintenance schedule, but as best practice, I think it’s a really fantastic idea. I think a walkaround with the owners, the strata committee, and the strata manager is a really great idea so you can begin to put a list of items together.

Is there a requirement for strata managers or committees to have a planned maintenance schedule for buildings? Should we organise a yearly on-site walkaround and discuss what’s needed, then develop a budget to hire local trades to do the work?

Building a relationship with local trades is a really positive thing. You can begin scheduling out maintenance and small improvements over the course of 12 months or have a one-year and a three-year plan.

I’m not on the committee yet, but hope to be for the next AGM.

It’s also great that this person is looking to get on the strata committee to try and make a difference and put in place some processes like this. Hugh McCormack | McCormacks Strata Management Hugh.McCormack@mccormacks.com.au READ MORE HERE

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Can committee members be liable for misleading owners?

The strata committee preselected a manager and misled owners at the vote. Is this legal? We recently held a meeting for owners to vote between two companies to appoint a new strata manager. Before the meeting, the committee had already decided to go with one company. They called the second company and told them not to bother attending, as the pre-selection had been done. On the night of the vote, owners were misled and told the second company had failed to appear, implying they weren’t interested in managing our strata. The pre-selected company received 100% acceptance and was awarded the contract. Many of us believe this is a clear case of deception and manipulation of the voting process, and possibly not legal. We need clarification on the legality of what has happened before we take the matter further.

Committee members who misled owners may face personal liability, and can be removed by ordinary resolution at a general meeting. Under the Strata Schemes Management Act 2015 (SSMA), the committee is set up to assist the owners corporation (OC) with managing its functions. As such, the committee is entrusted with a wide range of powers and discretion over the day-to-day management of the strata scheme. section 260(1) of the SSMA negates liability for a committee member or an officer of the OC, where the committee member or officer of the OC has acted in good faith for the purpose of executing functions as such a person under the SSMA or any other Act:

30 www.lookupstrata.com.au

260 Personal liability of officers of owners corporations and others 1. A matter or thing done or omitted to be done by any of the following persons, or a person acting under the direction of any of those persons, does not, if the matter or thing was done or omitted to be done in good faith for the purpose of executing functions as such a person under this or any other Act, subject any of the following persons or person so acting personally to any action, liability, claim or demand: a. an officer of an owners corporation, b. a member of a strata committee. 2. A ny such liability of an officer of an owners corporation or a member of a strata committee attaches instead to the owners corporation. In some cases, office bearer’s liability cover may be available under the OC’s insurance policy. However, there will typically be exclusions such as: • Dishonest, fraudulent or criminal acts. • Acts in conflict of interest. • Acts outside the scope of the committee member’s authority, such as when a decision is made without a requisite general meeting resolution. A claim for damages may be available against the committee members, where they have not complied with their duties owed to the OC and have engaged in dishonest, fraudulent or criminal acts. In this instance, where the committee has misled the owners into thinking that the second strata managing company has failed to appear at the general meeting, the committee has not carried out their duties in good faith and they may be subject to personal liability.

Removal of committee member

A member of the committee may be removed by election of new office bearer by the committee. If the committee is not cooperative in removing the member, one of many ways the OC can deal with a committee member who has misled the owners is by removing them from their position. The owners may remove the member of the committee from their office at a general meeting by way of an ordinary resolution. If this occurs, the person is not eligible for election to the committee for a period of 12 months from the date of the resolution pursuant to section 32(5) of the SSMA.

Fraud in Crimes Act 1900

If the committee or one of its members has obtained a financial benefit by deception or dishonesty, the action of the committee or its members may be considered as fraud under the Crimes Act 1900:

192E Fraud

1. A person who, by any deception, dishonestly: a. obtains property belonging to another, or b. obtains any financial advantage or causes any financial disadvantage, is guilty of the offence of fraud. Maximum penalty: Imprisonment for 10 years. Under section 192E of the Crimes Act 1900, a person may be subject to a maximum penalty of imprisonment for 10 years if found guilty of fraud. The prosecution must satisfy the element of ‘deception’ and ‘dishonestly’. However, in the circumstances described, it does not appear as if the committee or one of its members has obtained a financial advantage. Matthew Jenkins | Bannermans Lawyers enquiries@bannermans.com.au

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Customer Service Software for Strata https://resvu.io/ enquiries@resvu.com.au 08 7477 8991

StrataMax

Streamlining strata https://www.stratamax.com/ info@stratamax.com 1800 656 368

MYBOS

Building Management for Residential & FM Schemes https://mybos.com/ sales@mybos.com 02 8378 1096

Onsite.fm

RECRUITMENT SERVICES

Building Management Software

Property Recruitment Partners

Serif.AI

Category Recruitment Category for the strata sector Category

People solutions for the Strata Sector

https://propertyrecruitmentpartners.com.au/ aaron@propertyrecruitmentpartners.com.au 02 8313 5591

sharonbennie - Property Recruitment Matching top talent with incredible businesses https://www.sharonbennie.com.au/ sb@sharonbennie.com.au 0413 381 381

https://onsite.fm/ hello@onsite.fm 02 7227 8550

AI managed with your judgement https://www.serif.ai/ kelly@heyserif.com

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The NSW Strata Magazine | August 2026