Unit Titles Damage to Unit caused by Common Property

[Giddy]

Hi All, I am a Commercial Manager helping a friend with a problem with her unit which is part of a body corporate, and I just want to check that my thoughts are consistent with other managers/lawyers before I approach her BC Manager. I do deal with BC's though work however the person managing this unit has a very different way of dealing with the situation, though I am pretty sure based on where their business is based and where the unit is that they have not inspected/visited the property in some time.

Essentially, there has been moisture damage (mould to ceiling, walls and carpet etc) in her unit, from what I can see by the photos she has provided me with there is water coming from a partially collapsed retained bank at the back of the property which forms part of the common property, the water is running down the side of the building (concrete block walls). If the photo provided by the BC manager is correct then there is also an area of external wall which is unpainted/sealed, and the pic shows a bunch of rubbish piled up down the side of the unit, however I am unable to marry that picture up with the photos provided by my friend, which I find a bit suspicious. I am going for a road trip next weekend to view the property myself.

The advice provided by the BC manager is that my friend is responsible for clearing away any rubbish and/or soil from a slip and ensuring that the paint on the outside of the unit is maintained, as the area forms part of a private courtyard and that they would be happy to undertake the repairs and recover the costs from her under section 126 of the UTA 2010. The unit title plan clearly shows the courtyard to be on the other side of the house, and the boundary of private property to be the wall of the unit.

So, my thoughts are that regardless of the cause of the damage; be it from rubbish piled outside of the building or a slip/water coming from the rear of the section, it would have been the responsibility of the BC to maintain/repair those areas in order to avoid damage occurring to any of the units. My thoughts are that the damage was consequential from a lack of maintenance and that the BC should be responsible for putting it right. (Looking at the photos it appears that there is very little maintenance completed on the rear of the site, the photos show a number of areas where the bank has given way and the soil is just lying on the ground at the back of the car park).

Anyway, I would be interested to know if anyone has had any experience with a similar situation or a better legal understanding than the BC manager, would really appreciate any of your thoughts.

Thanks in advance,
Giddy

[gavinc]

<So, my thoughts are that regardless of the cause of the damage; be it from rubbish piled outside of the building or a slip/water coming from the rear of the section, it would have been the responsibility of the BC to maintain/repair those areas in order to avoid damage occurring to any of the units.>
If the cause of the damage was the rubbish, and your friend was responsible for letting the rubbish accumulate then I would say the fault and liability lies with your friend.
If the cause was the slip then I would say the body corp is responsible for fixing it

[artemis]

Hard to determine the cause from what you wrote, but does sound unlikely that rubbish would have caused the issue. In which case it is a BC responsibility. My understanding is that the outside wall of the unit is also BC responsibility (building envelope) and therefore that internal damage which can be shown to be caused by the building envelope is also the BC responsibility.

I am chair of a BC of a previously leaky building and the above is based on our experience.

Sounds like the BC is trying it on. Fortunately there are good remedies for resolution of a dispute with a BC via the Tenancy Tribunal (if within their limit which I think is $50,000).

[klauster]

As the BC is the owner of the common property, the BC is also responsible to maintain it accordantly. If somebody causes damage, still the BC is responsible but may pass on the costs.

[Ivan McIntosh]

A Body Corporate does have the ability to pass on the cost for work that is substantially for the benefit of one unit.....but I would be a little surprised if failure of a retaining wall that is not attached as such to the unit could be viewed that way. You can take a dispute over that to the Tenancy Tribunal, subject to the $50k limit.

I note there was a reference to a private courtyard....is that perhaps an accessory unit that forms part of the title?

126 Recovery of money expended for repairs and other work

(1) This section applies where the body corporate does any repair, work, or act that it is required or authorised to do, by or under this Act, or by or under any other Act, but the repair, work, or act—

• (a) is substantially for the benefit of 1 unit only; or

• (b) is substantially for the benefit of some of the units only; or

• (c) benefits 1 or more of the units substantially more than it benefits the others or other of them.

(2) Any expense incurred by the body corporate in doing the repair, work, or act is recoverable by it as a debt in any court of competent jurisdiction (less any amount already paid) in accordance with the following:

• (a) so far as the repair, work, or act benefits any unit by a distinct and ascertainable amount, the owner at the time when the expense was incurred and the owner at the time when the action is instituted are jointly and severally liable for the debt; or

• (b) so far as the amount of the debt is not met in accordance with the provisions of paragraph (a), it must be apportioned among the units that derive a substantial benefit from the repair, work, or act rateably according to the utility interest of those units, and in the case of each of those units, the owner at the time when the expense was incurred and the owner at the time when the action is instituted are jointly and severally liable for the amount apportioned to that unit.

(3) Despite subsection (2)(b), if the court considers that it would be inequitable to apportion the amount of the debt in proportion to the utility interest of the unit owners referred to in that paragraph, it may apportion that amount in relation to those units in the shares as it thinks fit, having regard to the relative benefits to those units.

[sidinz]

Like the others, I would check what you're being told about the courtyard wall being your friend's problem. I own a unit in a building that sounds similar: each unit has a courtyard that is an accessory unit - private property. However that doesn't alter the fact that ALL exterior walls are BC responsibility, whether they back on to private areas or not. So in my building, an unpainted piece of wall is up tp the BC to remedy, no matter where it is located.

It also sounds as though the rubbish pile is on common land, which would make it a BC issue. Are you contending that the presence of the rubbish pile traps water against the wall which leads to it penetrating and causing mould?

[Giddy]

I will update this once I have visited the site myself this weekend.. but to clarify the courtyards the BC manager refer to are at the front of the property and the damage is at the rear of the property. So they are more than confused with the layout of the site.

The moisture is coming from one of two foreseeable issues.. a collapsed retaining wall/land slip on common property OR rubbish piled on common property against a non sealed exterior wall of the unit.

The test is whether the BC can recover costs from the unit owner for damage that could/would have been avoided had they maintained the site to a suitable standard in the first place.

[Giddy]

Soo.. I went to inspect the property over the weekend and the magnitude of the problems is only now becoming clear.

Yes, there is rubbish on the side of the building on common property which is damp, and leaning up against the outside wall a section of which for some reason had been missed during the repaint some time in the last couple of years (I will need to check on the timing), so the concrete wall is bare and moisture could well be getting in.

There are also slips on the back slope which have left piles of soil in the rear car park, it doesn't however appear to have affected the building (there was talk of planting the slope in the AGM minutes a couple of years ago, so pretty disappointing that they haven't done anything about it to date).

We have since also uncovered a few other scary truths.. my friend looked at the back of the unit and thought something looked a bit strange.. that strange thing is that the neighbouring unit owner upstairs has built a large deck onto the back of the building, which not only is dyna-bolted into the concrete block wall of her unit. It has completely blocked out the sun to the back of her unit (the moisture damaged corner). With talking to some of the surrounding tenants we know that this was done about 12 months ago. Add to that, that upon talking with the council today we discovered that the unit owner applied for consent, but that expired in 2011, therefore the deck was constructed without consent, it has no certificate of compliance.

Coming back to the way the deck is attached to the building there is a water bubble in the paint of the bedroom wall about 30 - 40 cm below where the bolt it attached to the wall, and it is obvious from the outside that water has been tracking along the support and onto the wall.. it was still wet when we were there, even though it hadn't rained.

Furthermore, my friend was never consulted before or during construction, and we are not sure that the BC Manager even realises that it has happened. There is nothing about it in the last 3 years AGM minutes, the changes have not been recorded on the unit plan, even though those two units now have an increased floor area and the construction will have damaged the saleability of the unit.

I am still waiting on some more information, but man.. they certainly don't stuff things by halves down that way!! I have some work ahead of me!!

[Neongreen]

Giddy, this may be something your friend should probably be looking into legal advice for. Handling it correctly could make a very significant difference in the outcome.

[gavinc]

<they certainly don't stuff things by halves down that way!>
where is down that way, tried googling but couldn't find it

[klauster]

Find out how that BC is structured (chair person and committee).
As unit title holder I would address my enquiry to the chairperson.
Duties previously and historically carried out by the BC secretary are now under the UTA 2010 duties of the chairperson. The chairperson then can delegate functions and procedures to the BC secretary or committee. But still the chairperson has to know - as he/she signs the papers on behalf of the BC.

Parallel I would request from the BC secretary (BC manager) a copy of the BC committee meeting minutes for the last two years. With a clear picture then you can apply for an EGM.

Have a look at the UTA 2010 that has redefined the jurisdiction for disputes resolution.
At this stage I would see it as internal matter of the BC.

[Wayne]

Furthermore, my friend was never consulted before or during construction, and we are not sure that the BC Manager even realises that it has happened. There is nothing about it in the last 3 years AGM minutes, the changes have not been recorded on the unit plan, even though those two units now have an increased floor area and the construction will have damaged the saleability of the unit.

How could the BC not know that a deck has been added?
This is either a very big complex or people are blind.
If the deck was constructed a year ago why is it only coming to light now?

[klauster]

“How could the BC not know that a deck has been added?
This is either a very big complex or people are blind.”

I’ve seen many BCs, they are just not functional. Chairperson & committee don’t do their job, BC members (unit title holders) don’t care either – not even attend the AGM and the BC secretary takes care of their own business – resulting in astronomic costs and damages to buildings and the levies increase accordingly and uncontrolled.

[Giddy]

The BC employ a manager based not only in a different city, but in the other island, most if not all of the units are tenanted, and from what I understand the only person who visits regularly is a guy that does maintenance quarterly (so he is unlikely to care about what unit owners have agreed on).

I manage Body Corporates myself in a different part of NZ, and like many of our clients the unit owners have contracted the chairpersons responsibilities out to the management company who acts as secretary, which they are entitled to do. When you read through the AGM minutes it is clear that only 4 - 5 of the 12 unit owners attend, and there was nothing mentioned about an addition, so unless the tenants ask the question or complain there is no one else there who knows what is going on.

I won't name the company, but it is very disappointing to see someone in my line of work doing such a shoddy job then telling my friend she needs to pay for the repairs thereafter..

[klauster]

unit owners have contracted the chairpersons responsibilities out to the management company who acts as secretary

Understood, the chairperson signs the contracts (work that needs to be done on behalf of the BC, basically what the AGM agrees in its budget) and he/she can delegate duties to the committee or the BC manager (but is still responsible). The unit owner owns by default a share of the common property and has obligations and responsibilities as well.
These two people should have a vast interest in sorting the issue with the BC manager, or would you see it differently?