No Rent Losses for Slow Strata Owner

Tezel v The Owners – Strata Plan No 74232 [2022] NSWCATAP 149


Quick Read

The NSW Court of Appeal decision is about a strata owner’s loss of rent claim for her Bondi Beach apartment because of unrepaired water leaks in the strata building that made her strata lot uninhabitable.  The primary issue was about time limits for damages claims made under s.106 applied.  After a series of back-and-forth decisions at NCAT, the NSW Court of Appeal decided that NCAT damages claims must be made within 2 years of awareness of rent loss and this claim was made too late.  So, the decision highlights the need for strata owners to act quickly to take advantage of the easier damages claims provisions in NSW strata laws.


Implications

  • A strata owner can claim for lost rent under s 106(5) when a strata building doesn’t maintain, repair or replace common property.

  • That kind of claim arises strictly according to the provisions of the laws.

  • The recoverable losses are the foreseeable consequences of a strata building’s failure to maintain, repair or replace common property.


Full Report & Case Details

This court decision is an appeal to the highest Court in NSW after the dispute was decided by the NCAT Appeal Panel.

The dispute involved water leakage in a strata lot in Bondi Beach and the consequential loss of rent. The timing matters in this case, so here it is.

  • Tezel, who owned and lived in her strata apartment, noticed water leakages from the common property in 2013.  Since the leaks were not repaired she moved out shortly afterwards.

  • In 2016, Tezel unsuccessfully tried to rent the strata apartment because of its condition.

  • Eventually, the strata building fixed the causes of the leak.

  • On 6 November 2020, Tezel started NCAT action against the strata building for lost rent from 6 November 2018.

Under NSW strata laws [s 106(5)] a strata owner can claim damages for reasonably foreseeable [predictable or likely] losses they suffer if the strata building fails to properly maintain, repair or replace the common property.  But there’s a 2 year time limit.

Initially, NCAT dismissed Tezel’s claim saying that Tezel became aware of the potential rent loss in 2016, thus barring her 2020 claim. However, NCAT’s Appeal Panel overturned this decision and awarded Tezel damages.  The strata building appealed.

The key legal question was whether Tezel's rent loss claim was time-barred under s 106(6) based on when ‘awareness’  of the loss occurred.

The NSW Court of Appeal considered parts of the strata laws and referred to its earlier decision in Vickery v The Owners Strata Plan No 80412 [2020] NSWCA 252 to decide that Tezel was too late to make her rent loss claim concluding as follows.


Keywords

#NSW #NSWCourtofAppeal #2023 #damages #repairs #SSMA2015 #s.106 #s.105(5) #s.106(6)

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