More Strata Defect Sagas in Sydney

Since I’ve started exploring the world of strata building defect claims I’m unearthing a lot of bad news for strata owners and serious problems to be overcome.

The latest strata defects drama affects a medium sized building in Sydney’s Bondi Junction called Harbourview.

After many years where the defects in the building were either left unnoticed or hidden by developer's and builder's associates, the committee finally learned in 2009 that there were serious waterproofing problems that could cost millions to fix.

But since the building was completed in early 1998 they were already out for time for Home Building Act claims (having only 7 years from building completion).  So, they started legal action against the builder (Australand) for negligent construction, and the former strata manager (Strata Schemes Management Corporation) and former on site manager (BMAUS Australia) for not properly handling the defects whilst they were in time to sue.

Australand, defended the legal action and relied on a little used provision of the Environmental Planning and Assessment Act (section 109ZK), introduced in July 1998, that limits ‘building claims’ for 10 years from when an occupation certificate is issued for the building.  On that basis Australand applied to dismiss Harbourview's legal action against them.

The case was complicated because when the strata building was built there were no occupation certificates, there was no section 109ZK or 10 year time limits on legal action.  So, the NSW Supreme Court had to look at how the transitional provisions applied to Habrourview.

Unfortunately for the owners in late June 2011 the NSW Supreme Court decided that the transitional provisions applied to Harbourview’s situation so that its certificate of classification was deemed to be an occupation certificate, the 10 year time limit for building actions applied, and even though their rights were reduced as a result, Harbourview could not pursue the claim against Australand.  You can read the judgement here.

So, it appears that the strata corporation was out of time to sue in 2008 which was before it actually discovered the waterproofing defects in 2009.  It just doesn’t seem right and makes me think that there’s lots of strata corporations in the same situation (and who should be careful not to miss the 10 year time limits).

The strata corporation is considering an appeal. 

Let me know if you know of similar situations.

Francesco …