pay the bill for the Lacrosse apartments fire?
The gleaming white, orange and red panels attached to the
outside of many high rise buildings built between the 1980s
and 2013 create a stylish look for a relatively little
But these panels hide a dark secret - they are highly
combustible because they have a polyethylene core, which is
like diesel fuel sandwiched between two paper thin sheets of
Not long after midnight on 25 November 2014, the
inevitable happened at Lacrosse apartments in Melbourne's
Docklands. A fire which started on the balcony of apartment
805 took just 11 minutes to climb up the building, as the
panels burst into flame. See photo.
On 28 February 2019, Judge Woodward handed down his
decision on who must pay for the fire damage and for the
cost of replacing all the panels at Lacrosse. He ordered:
- The builder, LU Simon to pay the owners corporation
and the 209 strata owners $5.748 million to reinstate
the damage caused by the fire and for the additional
insurance premiums on the building because of the panels
/ fire, and also up to $6.823 million for removal and
reinstatement of the rest of the cladding.
- The building surveyor, Gardner Group to pay 33% of
that amount to LU Simon
- The architect, Elenberg Fraser to pay 25% of that
amount to LU Simon
- The fire engineer, Thomas Nicolas to pay 39% of that
amount to LU Simon
- The French backpacker, whose cigarette started the
fire, had the final 3% responsibility.
Not paying attention to the fire safety of building
materials used in the building has proved to be a costly
lesson for the builder, and the building consultants.
And having the misfortune of buying in the Lacrosse
building has been costly for the owners. Apartment 805 (a 2
bedroom 2 bathroom apartment) was bought off the plan in May
2010 for $580,000. It was re-sold in January 2018 for just
According to Fire Brigades, there are 10,000 buildings in
the eastern states of Australia with suspected highly
For more details, click on my case note -
Who is responsible when wall cladding
catches fire? The Lacrosse apartments decision
Never go to court with a strata
dispute because it may cost you if you win
If you go to court and win, the loser will pay your legal
costs of going to court, as a general rule. Legal Costs are
often in the range of $40,000 to $80,000 for a contested
hearing of one or two days in the Supreme Court.
It's no wonder that people avoid going to court if they
possibly can - because the legal fees are very high and what
they are fighting over is not worth it.
It is for this reason that the Strata Titles Law
encourages strata owners and owners corporations / body
corporates to take their disputes to the Tribunal, such as
NCAT, VCAT or QCAT, which have cheap and informal procedures
which keep legal costs to a minimum. They also have a rule
that the winner is not entitled to be paid their legal costs
by the loser, except in special circumstances.
Tribunals have the disadvantage in that they cannot deal
with some disputes and the orders they make are not as
enforceable as orders made by the Supreme Court.
It was for this reason that the owner of a valuable car
parking space in a strata building at Potts Point (near
Kings Cross), went to the NSW Supreme Court to protect
access to the car parking space after the owners corporation
installed a chain and proposed building and gardening works
which restricted access to his car parking space.
The owner won the case and got his orders. But when he
applied for an order that the owners corporation pay his
legal costs he got a nasty surprise!
The Court ordered him to pay the legal costs of the
owners corporation even though he had won, because he had
not followed section 253(2) of the Strata Schemes Management
Act which requires that he go to the Tribunal first before
going to court.
As a result, he ended up paying not only his legal costs
but also the owners corporation's legal costs of going to
For more information, click on my case note
Even if you win a strata claim in the
Supreme Court of NSW, you may lose by being ordered to pay
the owners corporation's legal costs
Is an Owner’s Corporation allowed to
restrict access to an owner's parking space?
The Strata Scheme at 45 Macleay Street, Potts Point was
an old strata. It was strata titled before 1 July 1974, and
therefore it was possible to have and did have, a separate
title for each car parking space.
Parking being scarce in Potts Point, the owner of a home
unit up the street bought the car parking space. Trouble
began soon afterwards. The Owners Corporation put up a chain
barrier to separate the car space from unused land which was
common property. The chain needed to be removed every time
to enable a car to cross into that land to be parked in what
was a 'tight' parking space. Worse was to follow: the OC
planned to build a car parking area or a garden area on the
unused land, with a fixed barrier close to the parking space
which would make parking almost impossible.
So the owner took the Owners Corporation to the Supreme
Court, asking for a declaration that it not unlawfully
interfere with his right to access the parking space. The
Court made an order that the owner could go over by 800mm
into the unused land when parking their car, unimpeded by a
chain or a barrier.
But in an interesting twist, the owner was ordered to pay
the legal costs of the OC (in addition to his own) even
though he won, because the Strata Law says that if a strata
dispute can be heard in NCAT, then it should be heard in
Here's a link to my full case note -
An Owner's Corporation cannot restrict
access to a car space in a strata scheme
Car Parking space in dispute (lot 29) at 45 Macleay
Street, Potts Point
What happens to an off the plan
purchase if the building is not completed before the sunset
Let's start by making it clear that a sunset date is not
a romantic meeting. A sunset date is a date that a property
developer inserts into off the plan sale contract by which
they expect the building to be completed and the strata plan
to be registered.
Until 2 November 2015, there were no restrictions on
vendors or purchasers terminating the sale contract if the
building was not completed by the sunset date. But in a
rising property market, some property developers were
delaying completion and were using the sunset clause to
terminate then re-sell at a profit.
In response, the NSW Government introduced a Sunset
Clause Law which requires the vendor in the contract to
obtain permission from the NSW Supreme Court to rescind the
contract. Permission is granted if the court is satisfied
that it is just and equitable in all the circumstances to be
able to rescind.
In only the second case which has been decided under the
Sunset Clause Law, the Court has decided to refuse
permission to the property developer to rescind nine off the
sale contracts in an apartment development in Surry Hills,
The court refused because the purchasers would lose the
benefit of an average increase in value of $200,000 above
the Contract Price and lose the 'lifestyle' choice of moving
in. This was so, even though the property developer was not
wholly to blame for the delay in completing the building
because its builder went into administration.
For more details, click on my case note
Sunset Clause Law bites property
Whatever you do, don't
annoy the voters!
New laws for Airbnb rentals to start in
2019 in NSW
The Castle is a great movie because it captures the
emotional attachment Australians have to their home and to
living a friendly and peaceful neighbourhood.
Town planning laws support this by strictly separating
residential from business and commercial areas, with
exceptions for home offices and occupations.
However, Airbnb style short-term rentals have disturbed
the neighbours, especially in strata buildings, because the
guests come and go frequently, some are noisy, some hold
parties and some cause damage. They have disturbed the Local
Councils because Airbnb rentals introduce a commercial
activity into residential areas.
For the past three years, the NSW Government has been
searching for a compromise between encouraging tourism and
allowing people to make extra money on the one hand, and
complaints by voters of increased levels of noise and
disturbance in residential neighbourhoods on the other.
Now the NSW Government has introduced new laws to
regulate short-term rentals.
- Homestays are legal all year round if the
owner-occupier is renting a spare room, a flat or a
studio as a short-term rental in their home. No Council
approval is needed.
- Whole house or apartment short-term rentals are
legal up to 180 days per year, where the owner-investor
is not present. This limit applies to Greater Sydney.
Elsewhere in NSW, there is no upper limit on the number
of days. No Council approval is needed.
- If the apartment is in a strata building, the Owners
Corporation can totally ban owner/investors from using
their apartment for short-term rentals, but not
owner/occupiers from using the apartment for short-term
rentals when they are away, such as on holidays (for up
to 180 days per year). A special by-law is needed,
passed by a 75% majority, to ban short-term rentals
- All hosts will need to register their property.
Airbnb hosts, guests, holiday letting agents, etc will
need to comply with a code of conduct to keep the
neighbourhood peaceful, and observe rules for parking
and garbage disposal.
Of course, there are many fine details. To find out more
Be ready for the new Airbnb /
short-term letting laws which will start in 2019 in NSW
Court rules that
Airbnb style holiday letting is unlawful in a strata
The "Pinnacle" is an exclusive residential condominium on
Grace Bay Beach in the Turks and Caicos Islands.
The developer aimed to attract buyers looking for an
exclusive place to live, not the holidaymakers along the
beach. So the developer included a strata by-law which
banned owners from renting out their apartment for less than
one (1) month.
This ban was ignored by the owners of apartment 102, who
rented to holidaymakers, usually with one week stays. The
body corporate sued the owners for breaching the strata
by-law. The owners countered by arguing that the strata
by-law was invalid because the Strata Law did not permit any
restriction on a strata owner’s right to rent out their
apartment. The Strata Law is the same in Turks and Caicos as
it is in Australia.
The case was fiercely fought, all the way to Judicial
Committee of the Privy Council in London, which was also
Australia's final court of appeal until 1986.
In the last year or two, the topic of Airbnb style
holiday lettings in strata apartments has been hugely
controversial in Australia. NSW Fair Trading has advised and
the NSW Civil and Administrative Tribunal has ruled that a
strata by-law cannot restrict the rights of an owner to rent
out their apartment in any way.
The Privy Council rejected this strict interpretation. It
ruled on 21 December 2017 that it was possible that the
owner’s rights be restricted, if the restrictions were
reasonable. In this case, the strata by-law was a reasonable
restriction on the right to lease because it was aimed at
preserving the residential use of the building. It was
reasonable to draw the line at 30 days to distinguish a
residential use from a holiday letting use. Therefore the
strata by-law was valid.
The ruling is a game changer. This is the new game plan
(in my view):
- The NSW Fair Trading advisory and the Tribunal
ruling can be ignored as they are both wrong to reject
any restriction on the right to lease.
- If a strata scheme wants to restrict Airbnb style
holiday lettings, it passes a strata by-law with a one
(1) month minimum stay requirement, just like in the
- If an owner is unhappy with the strata by-law
restriction, they can apply to the Local Council or
Planning Authority for an approval or permit to use
their apartment or villa as a serviced apartment or as a
bed and breakfast establishment. If an approval or
permit is granted, it will override the strata by-law.
- If the strata scheme does not pass a strata by-law,
then the owner can continue with their Airbnb style
For a detailed analysis read my case note:
Can a strata by-law restrict Airbnb
style holiday lettings? A new legal decision is a game
Do I need permission to renovate my home unit?
In the DIY TV Shows, the contestants renovate a whole
block of apartments before they are strataed for sale.
Therefore they don’t need to comply with all those annoying
rules and requirements for renovation approval that all
strata owners need to comply with.
What are those rules and requirements? Up until now, in
NSW, all work affecting the fabric of the building, from
major work such as a new bathroom to minor work such as
putting up a shelf in a bathroom, have all required the same
approval, namely a special resolution (a 75% majority) at a
general meeting of the owners corporation.
But from 30 November, 2016, this changes in a number of
ways depending on whether the work is cosmetic work, a minor
renovation or a major work. Specifically –
– Cosmetic work such as putting up a shelf,
hanging pictures, painting and patching, laying carpet,
installing built-in wardrobes and replacing blinds and
curtains (like for like) will not require any approval.
This is a DIY renovators paradise!
– Minor renovations such as renovating a kitchen,
installing a wooden floor, electrical work, installing an
air conditioner will require approval by a simple
majority (a 50% majority) resolution at a general
meeting of the owners corporation. This work is not DIY
territory because the owners corporation can be expected to
require that the work be carried out by licensed tradesmen,
at specified times, and according to approved plans.
– Major work covers all renovations that are not
cosmetic work and minor renovations. Major work is all work
requiring waterproofing and structural work, such as new
bathrooms, laundries, plumbing work, replacement of external
doors and windows, pergolas and awnings. Major work will
require approval by a special resolution (a 75%
majority) at a general meeting of the owners corporation.
This work is for licensed tradesmen with structural
engineer’s certificates and waterproofing certificates.
For more detailed information, click
How the new Strata Laws make renovating easier for strata
How long do you have to make a
building defects claim against the builder of strata
Owners of new strata apartments regularly find defects,
some minor, some major.
The new Strata Schemes laws in NSW will make it
compulsory for a defects survey to be carried out within a
year, and will provide a retention fund of 2% of the
building cost to cover repairs.
But often, it takes several years before major defects come
to light, such as foundation subsidence resulting in walls
cracking, cladding on facades falling off, water penetration
via faulty roofing or waterproofing, flooding, and so forth.
The question is - how long do you have to make a defects
claim against the builder?
The answer is - 6 years after the building work was
finished, not 6 years after the the building defect was
Determining the exact date the building work was finished
can be vital, as a recent case decided in the Supreme Court
of NSW demonstrates. This is a link to my article
Don't wait until it's too late to make
a Strata Scheme building defects claim
Strata Title ownership is
changing next year. Are you ready?
New Strata Laws will come into effect in NSW on July 2016.
This article explains the major changes that will apply from
How to make settling your home unit
Buying a home unit is very exciting and very stressful at
the same time.
This article suggests 6 jobs that you can be doing to
de-stress the process and make settlement smoother.
The 4 significant changes you need to
Do you own a strata apartment in New South Wales? Are you
purchasing off-the-plan? Strata title law is changing -to
commence on 1 July 2016.
Why landlords and tenants face special
risks when leasing strata shops, offices and industrial
This article covers four commercial leasing issues for
strata shops, offices and industrial premises-
Building repairs; Tenant signage and fit-out; Strata Levies; Tenant use and trading
Is Defect Free Construction achievable
for strata title buildings in NSW?
NSW Fair Trading says that waterproofing, fire safety and
structural defects are the ‘holy trinity’ of building
complaints it receives from apartment owners, in new
multi-storey apartment buildings. There are six reforms for
building defects contained in the new strata law.
Advice for landlords for renting
strata apartments / home units
For landlords, renting out a strata unit is entirely
different from renting out a house because a strata unit is
part of a strata community. Repairs and tenant behaviour are
special hazards when renting out a home unit - the rules
about repairs and tenant behaviour for strata owners.