Samanda [2005] QBCCMCmr 427 (5 August 2005)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Susan Loukas, the Owner of Lot 4

I hereby order that within one (1) month of the date of this order, the Body Corporate for Samanda community titles scheme 1481 must engage a person with appropriate qualifications to investigate scheme land to determine the cause of water penetration (if any) or other damage to Lot 4, and to provide a written report of the investigation.

I further order that within seven (7) days of the receipt of the investigation report, the body corporate must provide a copy of the report to the owners of Lots 4 and 5, and to the owner of any other lot included in the scheme if that owner may be individually responsible for any necessary work identified in the report.

I further order that the work identified in the report as being necessary to prevent any further water penetration or other damage to Lot 4 must be carried out within two (2) months of the date of the investigation by:

1. The body corporate; or
2. A lot owner who:
(a) Is responsible under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) to perform the work, and
(b) Has agreed in writing with the body corporate to have the work carried out.

I further order that the cost of the investigation and cost of the work identified in the report as being necessary to prevent any further water penetration or other damage to Lot 4 must be met by the body corporate; or by a lot owner who is responsible under the Act and the Standard Module to carry out the work.

I further order that if the body corporate pays for the work, and the responsibility under the Act and the Standard Module to perform the work lies with the owner of a lot in the scheme, the body corporate may recover the reasonable cost of the investigation and the reasonable cost for carrying out the work from the lot owner as a debt.

I further order the work must be otherwise carried out in accordance with the Act and the Standard Module.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0049-2005

"Samanda" CTS 1481

APPLICATION

This application is by Susan Loukas, the owner of Lot 4 (applicant) against Simeon Fisher, the owner of lot 5 (respondent). The applicant is seeking an outcome that the respondent stop water leaking into Lot 4.

JURISDICTION

"Samanda" Community Titles Scheme 1481 is a 6 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module).

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:

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)).

SUBMISSIONS

In accordance with the Act, submissions were called and a copy of the application was provided to the respondent, and the body corporate manager for distribution to the owner of each lot (excluding the applicant and the respondent) and the committee. A submission was not received within the time provided by the Commissioner.

DETERMINATION

The applicant’s main submissions were to the effect that:

Given the nature of this dispute and the fact that no submissions were made in response to the application, by letter dated 27 July 2005, I required the respondent to provide information with respect to the dispute. The respondent contacted this office on 28 July 2005 and undertook to provide written information with respect to this matter. The respondent provided this material on the same day. The respondent’s main submissions were to the effect that:

It is evident from the information provided by the applicant and the respondent that water has penetrated into Lot 4. The applicant has provided material indicating that an inspection by a plumber in 2002 concluded that a leak eventuated from the shower recess of Lot 5. The respondent has shown that extensive work has been carried out in Lot 5. The applicant claims that despite this work, water continues to penetrate into Lot 4.

Given these circumstances, I consider that the source of any water penetration into Lot 4 is unknown at this stage. There could be many causes of water penetration into Lot 4. For example, it is not known whether the water is penetrating from a pipe, drain or other device, or whether the water penetration can be sourced to the bathroom of Lot 5. Therefore, the respondent or another lot owner may be responsible pursuant to legislative provisions including section 109(3) and section 120 of the Standard Module, or the body corporate may be responsible (section 109, Standard Module), or it may be concluded from the circumstances that more than one party is responsible for the work to be carried out.

Water penetration sourced directly from Lot 5 could be the responsibility of the owner of the Lot under section 120 of the Standard Module. Section 120(2) to (4) provides, quote:

(2) The owner of a lot included in the scheme must maintain the lot in good condition.

(3) The owner’s obligation under subsection (2) to maintain the lot in good condition does not apply to a part of the lot the body corporate is required under this regulation to maintain in good condition.

(4) The owner of a lot included in the scheme must maintain the utility infrastructure within the boundaries of the lot, and not part of common property, in good condition and, if it is in need of replacement, must replace it.

Utility infrastructure is defined as, quote:

(a) cables, wires, pipes, sewers, drains, ducts, plant and equipment by which lots or common property are supplied with utility services; and

(b) a device for measuring the reticulation or supply of a utility service.^[1]

Utility infrastructure is treated as common property in accordance with section 20 of the Act which states, quote:

(1) Common property for a community titles scheme includes all utility infrastructure forming part of scheme land, except utility infrastructure--

(b) within the boundaries of the lot (according to the way the boundaries of the lot are defined in the plan of subdivision under which the lot is created); and

(2) However, common property does not include utility infrastructure positioned within common property if--

(a) its positioning is the subject of an agreement to which the original owner or the body corporate is a party; and

(b) under the agreement, ownership of the utility infrastructure does not pass to the original owner or body corporate.

Cable television wires positioned in the service shaft of a multistorey building that is scheme land for a community titles scheme, if the wires remain in the ownership of a cable television provider.

boundary structure, for a lot included in a community titles scheme, means a floor, wall or ceiling, other than a false ceiling, in which is located the boundary of the lot with another lot or common property.

Generally, a pipe is common property under section 20 of the Act unless it supplies a service to only 1 lot, and it is within the lot (for example, in an internal wall in the lot), and is not in a boundary structure. The body corporate has a responsibility under section 109(1) of the Standard Module to maintain common property in good condition. A pipe is the boundary floor between two lots is common property, and the body corporate has responsibility for the maintenance of that pipe unless section 109(3) of the Standard Module applies. Section 109(3) states, quote:

(a) the body corporate is not responsible for maintaining fixtures or fittings installed by the occupier of a lot if they were installed for the occupier’s own benefit; and

(b) the owner of the lot is responsible for maintaining utility infrastructure, including utility infrastructure situated on common property, in good order and condition, to the extent that the utility infrastructure--

1 An airconditioning plant is installed on the common property, but relates only to supplying utility services to a particular lot. The owner of the lot would be responsible for maintaining the airconditioning equipment.

2 A hot-water system is installed on the common property, but supplies water only to a particular lot. The owner of the lot would be responsible for maintaining the hot-water system and the associated pipes and wiring.

(c) the owner of the lot is responsible for maintaining the tray of a shower that services the lot, whether or not the tray forms part of the lot.

As is evidenced by the above references to the Act and the Standard Module, it is difficult to allocate responsibility for apparent water penetration without knowledge as to its exact cause. In this case, the cause of the water penetration is unknown and it has been assumed that the respondent is responsible. I do not consider that it is that simple. In my view, further investigations are necessary to determine exactly what (if any) problem exists. I consider that the body corporate should manage this process. The body corporate could conceivably be responsible for the water penetration and in any event, given the time which this problem has been evident, it is appropriate that the body corporate now manage and control an investigation of the building and other parts of the scheme and the work required to be carried out.

Therefore, I have ordered that the body corporate engage a person with appropriate qualifications to inspect the scheme land to determine the cause of the damage to Lot 4. The inspection must be conducted with the knowledge of the owners of Lots 4 and 5, and in accordance with an authorisation made in accordance with the legislation. The committee must authorise the engagement of a contractor if the proposed cost of the inspection is within the relevant limit for committee spending ($125 multiplied by the number of lots in the scheme^[2]).

The committee should then consider the conclusions made in the report and act accordingly. For example, the committee should obtain a quotation or quotations to perform the identified work, and depending on the proposed cost give consideration to the engagement of a suitable contractor to perform the work identified by the inspection report. In this regard, the committee will need to consider section 103 and section 104 of the Standard Module. If it is clear from an examination of the report and the relevant provisions of the legislation that a lot owner is responsible for the necessary work, then the body corporate can reach agreement with that owner for the owner to carry out and pay for the necessary work. In this case, the body corporate will not need to make a decision about a quotation to perform this work. If an agreement cannot be reached, the body corporate must carry out the work and subsequently recover the reasonable cost of the work as debt from that lot owner (section 109(4), section 121, Standard Module).

I have also ordered that the owners of Lots 4 and 5, and any other affected owners be involved in the process of determining this matter. In my opinion, these owners should be kept informed of the developments associated with the investigation. Given that their lots may need to be entered, the owners should have knowledge as to the progress of this matter. The owners of lots in the scheme should be aware that the body corporate has a right under section 163 to enter a lot. Section 163(1), (2) and (5) states, quote:

(1) A person (an authorised person) authorised by the body corporate for a community titles scheme may enter a lot included in the scheme, or common property the subject of an exclusive use by-law, and remain on the lot or common property while it is reasonably necessary--

(a) to inspect the lot or common property and find out whether work the body corporate is authorised or required to carry out is necessary; or

(b) to carry out work the body corporate is authorised or required to carry out.

(i) for entry to the lot mentioned in subsection (1)--at a reasonable time after at least 7 days notice of the intended entry has been given to--

(B) if the owner is not in occupation of the lot--the occupier of the lot; and

(ii) for entry to the common property mentioned in subsection (1)--at a reasonable time after at least 7 days notice of the intended entry has been given to--

(B) if the owner of the lot mentioned in subsubparagraph (A) is not in occupation of the common property--the occupier of the common property; and

(iii) in compliance with the security or other arrangements or requirements ordinarily applying for persons entering the lot or the common property.

(5) A person must not obstruct an authorised person who is exercising or attempting to exercise powers under this section.

Number of Scheme:	1481
Name of Scheme:	Samanda
Address of Scheme:	90 Martyn Street PARRAMATTA PARK QLD 4870

(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.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Samanda [2005] QBCCMCmr 427 (5 August 2005)