Spalling causes damage to wooden flooring with under heating – who pays?

Floyd – the NSW Strata Schemes Management Act (SCMA) is not that specific, but as a matter of principle the Owners Corporation (O/C) is responsible for the maintenance and repair of its common property, and owners are responsible for that activity within their lots.

However in the circumstances that you describe, there are a couple of complications (at least) including whether or not the lot owner concerned sought the prior consent of the Executive Committee (E/C) to replace the “as constructed” floor coverings with a wooden floor, and if so, whether the O/C then resolved to put a special by-law in place to among other things state who is responsible for the ongoing maintenance and repair of that type of flooring, and to what extent the current degree of water damage to the owner’s flooring arose from their reluctance to “work with” the O/C to address the spalling problem.

On the assumption that you’re in NSW, that there was no prior consent, and that there’s no applicable by-law or special by-law in place, then the usual interpretation of the SCMA is that the O/C must do whatever is necessary to repair the spalling (common property), and the convention is that it must also rectify any damage that’s consequentially and unavoidably caused to the lot owner’s property.

If as your post suggests the lot owner’s prevarication has worsened the damage to their flooring, then to both adopt a consistent approach (to that taken with other owners) and to limit expense to the O/C consequential to its necessary repairs, its E/C should in my opinion resolve to require the lot owner to at their cost provide clear access for the O/C’s contractors to attend to the spalling repairs on its common property by removing all necessary section/s of their wooden flooring.

The O/C could leave the subsequent replacement of those sections of wooden flooring to the lot owner’s discretion, although others may suggest that if the entirety of that flooring was originally installed without the prior written consent of the E/C, then the lot owner could be required to restore the floor covering to the type that existed at the time of the building’s completion, but in my opinion that would be excessive given that other owners have, presumably with the E/C’s knowledge, installed similar flooring.

• As an aside, problems arising from owners’ installation of wooden or laminated flooring post completion of buildings are such that this Forum has a topic dedicated to discussing those, and the upcoming NSW Legislation will specifically remove such works from Executive Committees’ delegations, and instead require approval only by the O/C at a General Meeting.

The discussion to date appears to have been around a floor that was installed, with or without permission, that is a fixed floor. It sounds like a fixed floor if it has underfloor heating. If it was installed with permission, then in the absence of a by law holding the owner responsible for its maintenance, it would be owners corp responsibility. If without permission, it is hard to see why the OC would have any liability at all.

Things change if it is a floating floor; floating floors are not part of common property. They are lot owner’s responsibility, but may be covered by the OC’s Building Policy under Owner Fittings. If the damage is not claimable under the OC’s Owner Fittings Policy, then it is hard to see why the OC should have any liability, in the absence of negligence as opposed to building failure.

Now of course if the floor has to be  torn up to fix the spalling, then whatever is torn up would have to be replaced at OC’s expense – but only if the floor  had been installed with OC permission, where permission is required.

If the floor belongs to the owner then the owners corporation is responsible for any damage caused to the floor by the spalling repair regardless of whether it is a fixed or a floating floor and regardless of whether it was installed with or without permission, by virtue of s.65(6) of the Act, which states:

(6) An owners corporation is liable for any damage to a lot or any of its contents caused by or arising out of the carrying out of any work, or the exercise of a power of entry, referred to in this section unless the damage arose because the owners corporation was obstructed or hindered.

There is no penalty under the Act for failing to obtain permission to install a wooden floor and NCAT does not have the power per se to order its removal. If the floor is resulting in a nuisance or a breach of a noise by-law then NCAT can issue an order that the noise be prevented (eg. by putting carpet over the top) but it has no power to order the removal of the floor if it is wholly within the lot.

NCAT also has no power to override s.65(6) of the Act. If the lot or its contents are damaged the owners corporation is liable for the damage. If the owner had an illegal machine gun stored under the floor and it was damaged during the repairs the owners corporation would be liable for the damage as it is lot property. The fact that the goods may be illegal or may have been installed without permission is irrelevant for the purposes of s.65(6).