There is lots of confusion and potentially liability associated with clarifying this topic.
1 What are we talking about?
Strata companies need to inspect strata common property for a variety of reasons including but not limited to:
- Practical completion inspections
- Builders Defect liability inspections
- 10 Year maintenance plan inspections
- Investigation and special purpose investigations
The key question that is often asked is do we need to inspect building elements inside individual Lots? The answer is sometimes yes and sometimes no. There can be issues if you get this wrong.
2 The key issue
In WA, strata plans for each strata scheme should clearly define the Lot boundaries between what is Lot property (i.e. owned by the Lot owner) and what is common property (owned by the strata company). These boundaries essentially define who owns what and who is responsible for what.
In essence the boundary is generally one of:
- The surface of the external walls and roof covers or
- The surface of the internal walls, floors and ceilings or
- The centre plane of walls between two Lots or a Lot and common property
So let’s say you have a 10 lots scheme and all of the Lots are essentially standalone single level building structures and the Lot boundaries are the external walls and roof covers. In this case it is likely that the Lot owner is responsible to maintain the external walls and roof covers )and everything within) as these items are not common property. Where there are construction defects the Lot owner would be responsible for progressing these with the builder under the statutory defect liability period.
An alternative scenario. Assume you have a 10 level 40 Lot strata scheme where the Lot boundaries are the surface of the perimeter walls, floors and ceilings inside of each Lot. Everything outward of the surface is common property. This leads to some lawyers suggesting that in a tier 2 multilevel strata complex the Lot owners essentially own the air within the Lot. So in this scenario everything below the surface (i.e. paint or final finish) is common property. So if there is a structural crack in the wall, water ingress coming through the wall, window or external door or the external doors or windows do not work, this is likely to be a common property issue.
So the key issue is who owns what and who maintains what? The Lot owner or the strata company?
3 How do you determine the line between Lot and common property?
Good news and bad news on this front. In newer WA strata plans, the strata plan document tends to be quite clear in describing the Lot boundaries for Lots, part Lots, exclusive use areas and similar. So this is an excellent starting point although it is important to also review bylaws and or management statements. The bad news is that in older strata plans there can be very little or no information on the location of strata Lot boundaries. What makes this more of a challenge is that there were Legislative changes which potentially moved the boundaries in 1985 in some schemes such that, determining exactly where the Lot boundaries are now require a detailed understanding of the strata plan and the Legislative changes.
Quality strata managers will be able to provide Lot owners and strata company’s guidance on this issue.
4 Implications for 10 Year Maintenance Plans
Having clarity on the location of strata boundaries is critical in the preparation of 10 year maintenance plans. The current draft regulations require that the following areas (amongst others), where they are common property, to be inspected:
- foundations of buildings
- doors and doorways
So if the Lot boundary is the external surface of the building surface then many of the above areas will not be common property and should be excluded from the 10 year maintenance plan on the common property.
However, where the Lot boundary is the internal surface of the Lot perimeter walls, floors and ceilings then everything below the surface is common property. If the strata company is preparing a 10 year maintenance plan, then that plan could be severely undermined if common property, which can only be viewed from within a strata Lot or part Lot, is not inspected to determine what, if any, maintenance is required. For example, the following issues may only be able to be identified from within a Lot but relate directly to common property:
- Water ingress from outside of the Lot impacting the internal Lot
- Structural cracking of internal perimeter walls
- Collapsing ceilings
- Issues which can only be inspected from within the roof space accessible via individual Lots including
- Fretting roof tiles
- Significant delignification of tile battens
- Defects within the roof frame
- Issues with a party wall
- Ceilings separating from joists
While multiple arguments can be made to inspect the individual Lots when preparing a 10 year plan, it is not without its issues. Accessing every Lot within a strata complex to inspect the common property which can only be viewed from within the Lot can be time consuming, expensive and a logistical nightmare to facilitate.
The challenge for strata companies and their Council of Owners is to weigh the risk of not inspecting against the time and effort associated with inspecting.
5 Implications for Statutory Builders Defect Liability Inspections on Strata Property
The situation described with 10 year maintenance plans equally applies to statutory defect liability inspections where construction defects are identified for the builder to remediate and in some cases the issues progress to a complaint against the builder within the WA Building (“Commission”) or State Administrative Tribunal.
Where construction defects progress to the Commission, the Commission will require that construction defects associated with the common property are progressed by the strata company and construction defects associated with Lot property are progressed by the Lot owner. In short, the actual owner of the item with a defect must take the issue forward.
So once again if the strata company wants to undertake a statutory defect liability inspection on the common property of the strata scheme, the strata company will need to consider if the internal areas of Lots and part Lots needs to be inspected so as to determine if there are any defects associated with common property which can only be progressed by the strata company.
While it is understandable that a strata company may want to exclude inspecting common property viewable from within individual Lots, it is important to note that the 6 year statutory defect liability period has a clear termination date.
6 In Summary
Strata companies are responsible for common property and Lot owners are responsible for Lot property in relation to both 10 years maintenance plans and statutory defect liability inspections. Prior to commencing with either of these projects it is important to have absolute clarity on where the Lot boundary lies and who is responsible for which building elements.
7 The Advert
Houspect conduct a number of strata building inspections including:
- Strata company practical completions
- Strata company defect liability inspections
- Strata company investigation inspections
- Strata company 10 year maintenance plans
- Strata Lot pre purchase building inspections
Build, Buy, Invest in property with confidence.