North Sea Apartments [2003] QBCCMCmr 45 (4 August 2003)

Last Updated: 17 May 2005

REFERENCE: 0068-2003

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	5483
Name of Scheme:	North Sea Apartments
Address of Scheme:	30 McIlwraith Street MOFFAT BEACH QLD 4551

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the Body Corporate for North Sea Apartments community titles scheme 5483

I hereby order that for the Body Corporate for North Sea Apartments community titles scheme 5483 is responsible for the maintenance and repair of the roof water proofing membrane located on Level E of the building.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0068-2003

"North Sea Apartments" CTS 5483

1.	Order sought

The Applicant, the Body Corporate for North Sea Apartments community titles scheme 5483, has sought the following adjudicator’s order under the Body Corporate and Community Management Act 1997 ("the Act"), quote-

"ORDER FOR CLARIFICATION OF RESPONSIBILITY
Clarification of responsibility under By-law No. 13 of the complex By-laws issued under Building Units and Group Titles Act 1980/90-copy attached.
The roof membrane needs repair and, as there is a difference of opinion among owners, the applicant requests an interpretation of the By-law and decision on the responsibility for costs of repairs to the membrane by either the body corporate or the owner of Lot 4, who holds exclusive use over the area."

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about-

(a) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

2.	Application details

This dispute resolution application was originally made on 29 January 2003. On 10 February 2003, a staff member of this Office wrote to the Applicant on behalf of the Commissioner for Body Corporate and Community Management ("the Commissioner") and requested further details about the matters in dispute, and clarification of the terms of the application. The Applicant duly provided the further information and material under cover of a letter dated 25 February 2003.

On 3 March 2003, the Commissioner invited the Committee for the Body Corporate, and all owners of a lot included in the scheme to make a written submission about the application. On 11 April 2003, and at the request of the Owner of Lot 4, the Commissioner extended the time allowed for making submissions about the application. The Owner of Lot 4 has made written submissions about the application in a facsimile dated 2 May 2003.

On 19 May 2003, the Commissioner made an initial case management recommendation that the application should be the subject of departmental adjudication. The Commissioner has referred the application to me for determination.

3.	Scheme details

The "North Sea Apartments" community titles scheme was originally created under a building units plan of subdivision (now known as a building format plan) registered on 16 February 1990. The community management statement for "North Sea Apartments" indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module") applies to the scheme.

"North Sea Apartments" consists of four lots (Lots 1, 2, 3 and 4) and common property. The original building units plan for the scheme shows that the building is made up of five levels. Lot 1 and parts of Lots 2, 3 and 4 are located on Level A. The main parts of Lots 2, 3 and 4 are located on levels B, C and D of the building respectively.

Departmental records show that two exclusive use by-laws have been recorded for the "North Sea Apartments" community titles scheme. One of the exclusive use by-laws, recorded on 10 January 1992, gives the Owner of Lot 1 a right of exclusive use of an area of common property adjacent to the northern boundary of Lot 1. This exclusive use by-law is not relevant to the subject matter of this dispute resolution application.

The other exclusive use by-law, which is the subject of this current application, was recorded on 17 May 1990 (I will refer to this by-law as "the exclusive use by-law"). In general terms, the exclusive use by-law gives the owner of Lot 4 a right of exclusive use of most of Level E of the building, which I understand is a roof-top area. Specifically, the by-law provides the following:

"12. The Proprietor for the time being and from time to time of Lot 4 shall have the special privilege of the exclusive use and enjoyment of a roof garden facility of that part of the common property as is delineated and which has the number 4 in the plan annexed hereto and marked with the letter A with the said proprietor being responsible at his own cost and expense to keep the roof garden in a neat and tidy condition and to keep all plants thereon properly tended and watered and otherwise being responsible for the performance of the duty of the Body Corporate under and pursuant to Section 37(1) of the Act. The aforesaid grant of exclusive use and enjoyment is made subject to and conditional upon the said proprietor permitting the Body Corporate and its Council and its properly appointed servants or agents, at reasonable times, access to such privileged area through the lot for the purpose of inspecting and maintaining the lift and associated equipment."

Sketch plans attached to the exclusive use by-law show that almost all of Level E (with the exception of what appears to be a stair well and the surrounding area) is covered by the exclusive use by-law. Therefore, pursuant to the terms of the exclusive use by-law, it appears that the Owner of Lot 4 has the exclusive right to use and enjoy most of the Level E roof top area.

4.	Issues to resolve

In making this application, the Body Corporate seeks a determination of responsibility for maintenance and repair of a roofing membrane located between Levels D and E of the building (that is, primarily between Lot 4, and the area of common property allocated for the exclusive use of the Owner of Lot 4). While the Body Corporate has not provided any professional reports or other evidence, from the material before me, I understand that the Body Corporate believes that the roofing membrane has deteriorated, resulting in water penetration and damage to the ceilings of Lot 4, and the common property stair well and elevator shaft.

5.	Determination

The Standard Module makes provision for maintenance of both common property, and lots, included as part of a community titles scheme. In accordance with section 120(2) of the Standard Module, lot owners must maintain their lot in a good condition. Some of the duties of bodies corporate concerning common property are set out in section 109 of the Standard Module. Sections 109(1) and (2) are of relevance in this case and provide the following:

"109.(1) The body corporate must maintain common property in good
condition, including, to the extent that common property is structural in
nature, in a structurally sound condition.

(2) To the extent that lots included in the scheme are created under a
building format plan of subdivision, the body corporate must--

(a) maintain in good condition--

(i) railings, parapets and balustrades on (whether precisely, or

for all practical purposes) the boundary of a lot and

common property; and

(ii) doors, windows and associated fittings situated in a

boundary wall separating a lot from common property; and

(iii) roofing membranes that are not common property but that

provide protection for lots or common property; and

(b) maintain the following elements of scheme land that are not
common property in a structurally sound condition--

(i) foundation structures;

(ii) roofing or other covering structures providing protection;

(iii) essential supporting framework, including load-bearing

walls."

In most instances, bodies corporate for community titles schemes created under building units plans of subdivision (and building format plans of subdivision) are obliged to maintain roofing membranes in a good condition. If the roofing membrane forms part of the common property for the scheme, section 109(1) (above) imposes an obligation on the body corporate to maintain the membrane in a good condition. Further, in most instances where a roofing membrane is located within a lot, the body corporate has an obligation to maintain the membrane in a good condition pursuant to section 109(2)(a)(iii) (also above).

The issue that arises in this application is whether the Body Corporate’s obligation to maintain the roofing membrane is displaced, or otherwise altered by virtue of the terms of the exclusive use by-law.

In accordance with section 173(a) of the Act, and section 123(1) of the Standard Module, a by-law granting excusive use of an area of common property to a lot owner may be conditional. In addition, an exclusive use by-law may impose obligations that would otherwise be obligations of the body corporate regarding the area on the relevant lot owner (see section 174(b) of the Act).

Section 123(2) of the Standard Module provides the following concerning maintenance of areas of common property that are the subject of exclusive use by-laws:

"(2) An exclusive use by-law is taken, in the absence of other specific
provision in the by-law for maintenance and operating costs, to make the
owner of the lot to whom exclusive use or other rights are given
responsible for the maintenance of and operating costs for the part of the
common property to which the exclusive use by-law applies."

In this instance, the exclusive use by-law does make specific provision for maintenance obligations. As mentioned previously, the exclusive use by law provides:

"...the said proprietor being responsible at his own cost and expense to keep the roof garden in a neat and tidy condition and to keep all plants thereon properly tended and watered and otherwise being responsible for the performance of the duty of the Body Corporate under and pursuant to Section 37(1) of the Act."

(The reference to section 37(1) is a reference to the Building Units and Group Titles Act 1980 ("the BUGT Act"), which applied at the time the exclusive use by-law was recorded. Section 37(1) of the BUGT Act set out certain duties and powers of bodies corporate, including an obligation to maintain the common property.)

An issue raised in the application concerns the use of the descriptor "the roof top garden" in the terms of the exclusive use by-law. From the material, I understand that there are no "gardens" as such on the area of common property that is the subject of the exclusive use by-law. This has resulted in some uncertainty as to the parameters of the maintenance obligation purportedly imposed on the Owner of Lot 4 by the exclusive use by-law.

I agree that the use of the term "garden" in the by-law is somewhat confusing given that there are no gardens in the area. However, I note that in the by-law the entire exclusive use area is described as the "roof top garden". Neither the terms of the by-law, nor the relevant sketch plans, identify or distinguish a separate garden area from other parts of Level E that are the subject of the exclusive use by-law.

In these circumstances, and notwithstanding the somewhat inaccurate description of the exclusive use area as a roof top garden, in my view, it is clear that the intention of the wording of the by-law is to make the Owner of Lot 4 responsible for the general maintenance of the entire area of the common property that is the subject of the exclusive use by-law. The issue that remains is the extent of this maintenance obligation, and whether this obligation includes a duty to maintain the water proofing membrane.

Maintenance obligations regarding water proofing membranes on exclusive use areas of common property has been considered in a number of previous adjudicator’s orders. In order 0655-2001, the Adjudicator made the following comments:

"In the context of section 109 which provides (as described earlier) that the body corporate is responsible for both common property membranes, and membranes that are part of an owner’s lot property, it is in my view absurd that an owner having exclusive use of a common property membrane should be responsible if the by-law imposes a general "maintenance" condition. It is my view that, unless the by-law specifies that the body corporate maintenance responsibilities include membrane maintenance, the term must be read down to refer only to maintenance of a routine nature. Included in this category of non-routine repairs along with roof membranes, would be other major repairs such as structural faults, foundation structure defects and roof repairs.

These major, non-routine items can be distinguished by the "whole-of-building" function which they provide. For example, the membrane on the roof terrace weatherproofs the whole building and not just the top residential level comprising Lots 11 and 12. It is therefore in the interest of all owners that they are assured that a membrane is repaired promptly, that an appropriate membrane is applied, and that it is applied professionally. The same can be said in respect of a roof covering a roof terrace where an owner has been given exclusive use of the roof terrace, in that the roof protects the whole of the building in the same manner that a membrane over an open slab does. Similarly, a crack in a roof slab can affect all of the building, as does a crack in a basement slab caused by foundation failure.

These items are the very items that have been specified in section 109(2) on the basis, I believe, of that "whole of building" protection function."

I agree with the above comments, and see no reason to depart from this line of reasoning in this instance. In this case, it seems to me that the meaning of the term "maintenance" as stated in the exclusive use by-law should be restricted to routine, maintenance matters. In my view, the waterproofing membrane serves a function for the whole building and its maintenance and any necessary repairs should be undertaken, and paid for, by the Body Corporate.

There is no evidence or other information before me to suggest that any alterations to the area, or other actions of the Owner of Lot 4, have contributed to the deterioration of the membrane. In these circumstances, I consider that the Body Corporate is responsible for maintenance and repair of the membrane. I have ordered accordingly.