By the Paddocks Club team

Below are examples of two questions on the Paddocks Club discussion forum, to show you what is available to our Community members!

Patio Waterproofing: Leak from balcony into lower section – must the Body Corporate get involved?

Member’s question:

Good day Paddocks,

We have a body corporate where the balconies form part of the section. The water proofing on the balconies have failed over the years but unfortunately there has been no recourse against the developer because the developer died about a year after building the complex.

We do know that if balconies form part of an owner’s section, that they will then be held liable for all repairs and/or maintenance, however the issue of the resultant damages is now becoming an issue. We have sections where leaking balconies are affecting the unit below and the owner whose balcony is leaking receives a letter from us to say that this is not a body corporate issue, and therefore, they need to attend to the waterproofing thereof. Most often the owner goes ahead and gets the work done.

The issue that arises with this scenario is that the owner below him is left with resultant water damages and the insurers have stated that they cannot accept a claim for resultant water damages because damages have occurred over a period of time. The owners then phone us and insist that we need to do something about it. We explain that this is now an issue between both owners and the issue just goes around in circles.

What can be done moving forward to sort this issue out?

We need to know:

1. What, if anything, is the body corporate responsibility in these instances?
2. What, if anything, is the managing agent’s responsibility in these instances?

because all that we get from these disgruntled owners is that we must do something.

Thank you

Graham’s answer:

Dear member,

If the damage to the flat below is the direct result of leaks from the exterior surface of the section above, and no common property is involved, then the body corporate is not involved.

The request to “do something” could be a request to fund the work or to make the upper owner pay.

  1. The body corporate cannot fund work inside a section that is not the result of its failure to perform its statutory maintenance and repair functions.
  2. While it is technically possible for the BC to take action against an owner to ensure they comply with their obligations under the Sectional Titles Schemes Management Act, in this case that is not appropriate, as the owner owner has a right to take direct action, and they are the only people prejudiced. It makes no sense for the body corporate to use its time and resources, as the expense of all owners, to pursue a claim that the owner could bring. The lower owner has all the evidence and the primary motivation as well as the legal right to take action.

I suggest you tell the lower owner to quantify the damages by reference to documented expert opinions, demand payment from the upper owner and, if necessary, apply to CSOS for an order compel them to pay. They don’t need lawyers, although they may well be advised to get legal advice so as to identify the correct orders and give the adjudicator clear reasons to support a positive order.


Change of Exclusive Use Area levy calculation

Member’s question:

Hi Graham

At a recent Annual General Meeting, it was agreed to change the Exclusive Use Area levy contribution calculation from a calculation based on the size of the EUA in square meters to a PQ calculation. This has caused some owners’ EUA levy to decrease and some to increase.

While I agree that an EUA levy needs to be based on expenditure that the Body Corporate anticipates to spend, surely this change would have had to form part of the Agenda and not just raised and voted upon at the recent AGM? Owners who were not present are now disputing that they were unaware of this change.

Graham’s answer:

Dear member,

The owners don’t have the jurisdiction to decide how the EU levies are calculated, and the PQs are not relevant. This decision is not valid because it is in conflict with the Sectional Titles Schemes Management Act.

The STSM Act [Proviso to section 3(1)(c) read with section 7(1)] makes it clear that this decision is made by the trustees if it is not specifically set out in the scheme’s rules.

If the rules don’t specify exclusive use payments (as most do not), the trustees must, after each AGM estimate what costs the BC is likely to have to pay in regard to each EUA and add these amounts to each EU holder’s monthly statement as a separate item, e.g. ‘EU maintenance & repairs’.

Kind regards

Article reference: Paddocks Press: Volume 17, Issue 3.

Graham Paddock is available to answer questions on the Paddocks Club discussion forum for Community members. Get all your questions answered by joining Paddocks Club.

This article is published under the Creative Commons Attribution license.

Back to Paddocks Press – March 2022 Edition.