Managing the Owners Corporation property

Managing the Owners Corporation property

If a piece of machinery is located on common property it is automatically common property and has to be maintained by the owners corporation ?

It depends if the machinery is for common use or not.

In The Australian College of Midwives Ltd v UP 1475 the Applicant argued that air conditioning machinery located on common property were common property and should be maintained by the OC.

The argument was extensive but the conclusion on each issue was that the air conditioning machinery were only ever intended to serve a small group of units not all the units.  Further the air conditioning machinary were serviced by and the electricity paid for by the units it served.  The fact that the air conditioning machinery stood on common property and was affixed to it was not the determining factor.

ACAT concluded the air conditioning machinery was never common property.

SDNM Pty Ltd v UP 3908 was cited in the Midwives case but it has been overtaken by the changes to the Unit Titles (Management) Act that allow differential levies.

Is the OC responsible for a drainage facility on an owner’s title that serves to drain the common property?

Yes.  ACAT argued in Riley v UP706 that S24(1)(e) of the UT(M)A applies because the drain was collecting substantial water from the common property, so an easement had been created under S35 of the Unit Titles Act.  Consequently the OC was required to undertake remedial work so the drain could perform appropriately.

If there is a ground floor unit with a courtyard and the balconies of upper floor units overhang the courtyard, which units own the airspace or is it common property?

In Ryan and UP2737, ACAT concluded that the correct interpretation of the Unit Titles Act 2011 means that the ground floor unit owns all the air space of the courtyard up to any encroachment and effectively ‘up to the heavens’ where there is not an encroachment and each of the units on the higher floors owns the airspace of its balcony. So effectively there is no common property area in this scenario.

Can a tree be considered a nuisance under default rule 7? Doesn’t nuisance apply only to behaviour?

In Ryan and UP2737, ACAT concluded that a tree can be a nuisance or a substantial annoyance (“a considerable or ample displeasing/troubling/irritating disturbance”) to the owner or occupier of another unit when it blocks light or reduces air circulation.

Consequently, while the EC Code of Conduct requires that ECs always make decisions in the interests of the OC, it would be prudent for the EC to seek information and advice on suitable plantings or on suitable conditions to apply to the permission to plant trees to minimise future problems.

Do all structures for the use of one owner on common property require a special privilege?

Possibly.

In UP68 and Haughey, based on reasoning in a Queensland case, ACAT concluded that any decision to that amounts to “a disposition of the common property” or “a de facto acquisition of common property” because one owner acquires exclusive and indefinite use of a part of the common property, is not a minor use and requires the OC to grant a special privilege by unopposed resolution.

So ECs need to think about whether it is a minor use of common property they can approve under Schedule 2 S2.4 or whether a grant of significant exclusive use is involved requiring the grant of a special privilege under S22.

If an OC amends its rules to require only a special resolution to allow an owner to erect or alter a structure on a unit or the common property, is the passing of the special resolution the only approval required to allow development on common property?

No.

In UP 68 v Haughey, ACAT decided that, consistent with S22 and Schedule 2, S2.4, further approval is needed.

Either the use is minor and will not unreasonably interfere with the use and enjoyment of the common property by other owners and can be approved by the EC under Schedule 2 S2.4. Or the alteration or erection gives exclusive use of part of the common property to one owner and therefore warrants the granting of a special privilege now by way of a special resolution creating a Rule.

If common property is involved, either one of these approvals is also required for the addition or alteration approval to be properly granted.

If previous owners of a unit did something that caused damage to another unit, does the owner of the unit causing the damage have to remedy it?

Very clearly yes.

The several cases of Levet and Levet v Dalla settled this. This case was heard in two parts in ACAT, appealed to ACAT, sought leave to appeal to the ACT Supreme Court but leave was refused and appealed again to ACAT.

The final appeal at ACAT reaffirmed the constant finding that “the owners take the land as they find it” meaning they have accepted the eventual results to others of the condition of the land. So, even if you did not construct whatever it is that is causing problems, you own it so you have to fix it.

If an owner has to rectify damage caused by his unit, does he have to give the affected unit ‘new for old’? Would he get some sort of discount?

No discount is allowed.

This issue was dealt with at length in Levet and Levet v Dalla particularly XD 10/915. If the feasible way of rectifying the damage caused by your unit was to replace old with new, there would be no discount.

If there were other ways of rectifying the damage, you would have to argue that the other party was relying on a technicality to get an unwarranted benefit and you might be successful in getting some discount.

Do unit owners in mixed commercial/residential OCs have a right to object to commercial operations they think will cause noise, waste, security or other problems? 

Yes other owners have the right to object to any proposal that requires a unanimous or an unopposed resolution to be approved. 

However, ACAT indicated in Artico Holdings Pty Limited v UP 3461, that if the lease purpose contemplates the commercial activity being included in the residential facility and contemplates the commercial activity in question, the owners cannot make a case based on assertions and need to purchase expert evidence to back their objections.

This suggests that unit owners in mixed developments need to be willing for the development to be mixed or to decide what sorts of activities they do not want and to defend their interests strenuously and potentially expensively.

Are the driveways of a units plan development subject to the road laws?

Probably not.

In Lockyer v Riley the ACT Magistrates Court in 2008 decided that for the purposes of the Road Transport (Alcohol and Drugs) Act 1977 a driving under the influence charge could not be proven when it occurred on the driveway of an OC. OC driveways and visitor parking places were judged not to be “open to or used by the public for driving, riding or parking vehicles”.

Consequently it would be prudent for OCs to make Rules or House Rules that require that owners, tenants and visitors drive cars, motor bikes and bicycles within the OC’s posted speed limit, within the alcohol and drug rules that apply on the road, with due care for the safety all people and animals around them and with due care for all structures on common or individual unit land.