Casa Del Rey [2011] QBCCMCmr 529 (30 November 2011)

Last Updated: 15 December 2011

ADJUDICATOR’S ORDER
Office of the Commissioner
for Body Corporate and Community Management

CITATION:	Casa Del Rey [2011] QBCCMCmr 529
PARTIES:	Ms Joy Ransley–Smith & Ms Dawn Ransley (applicants) The Body Corporate (respondent) All owners (affected persons)
SCHEME:	Casa Del Rey CTS 26387
JURISDICTION:	Sections 227(1) and 229(3)(a) of the Body Corporate and Community Management Act 1997 (Qld) (Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module).
APPLICATION NO:	0600-2011
DECISION DATE:	30 November 2011
DECISION OF:	R Miskinis, Adjudicator
CATCHWORDS:	Maintenance obligations of body corporate – maintenance of waterproofing membranes - section159(2)(a)(iii) Standard Module.

ORDERS MADE:

I hereby order that the body corporate for Casa Del Rey is to include on the agenda for the next general meeting, a motion to ratify the engagement of Rectification Services Queensland to undertake the remedial work on the podium slab including removal of original tiles, re-waterproofing and re-laying of tiles. I further order that the application is otherwise dismissed.

REASONS FOR DECISION
Introduction

[1] This application was made on 27 July 2011 under the dispute resolution provisions of the Act, seeking the following outcomes:

That the owners of units 1 and 2 bear responsibility for the cost of re-tiling their balconies;

That motion 13 on the agenda for the 2011 AGM be declared invalid as it included misleading and incorrect information.

[2] This dispute concerns a resolution by the body corporate to undertake certain work on the balconies of lots 1 & 2. The question for consideration is whether the cost of this work is the responsibility of the body corporate or the responsibility of individual owners.
[3] I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[1] It is a dispute between a lot owner and the body corporate within the context of a community titles scheme about a claimed or anticipated contravention of the Act or community management statement.[2]

Overview of dispute

[4] Casa Del Rey is a six storey concrete and block building, registered on a building format plan. Level A consists of a basement area below a suspended concrete podium slab. Lots 1 and 2 are located on level B which is the upper side of the podium slab.
[5] As mentioned above, the applicants are seeking to invalidate the resolution on motion 13, considered at the last AGM for the scheme on 8 January 3011, which read as follows: That the body corporate shall engage the services of a professional tiling contractor to overlay a new non-slip tile over the existing loose/ slippery tiles on the common property podium slab of the building with the overlaid tiles having a high non-slip surface and further that the preferred colours are to be in keeping with the building colours.
[6] The applicants argue that the tiled areas are not part of the common property but are within the boundaries of lots 1 and 2. It is therefore argued that the owner of lots 1 and 2 should bear the cost of the re-tiling work.

Submissions

[7] Pursuant to section 243 of the Act[3], the committee and all other owners were invited to make submissions regarding the application.
[8] Submissions made on behalf of the body corporate included the following:

• The subject area is the concrete slab above the basement area and has always been referred to as the podium slab;
• The original tiles had lifted in various places due to the absence of expansion joints that should have been created during construction. The underlying waterproofing membrane had also lifted with the tiles;
• Water was seeping through the slab into the basement area with efflorescence and water stains evident on the basement ceiling, in various car parking spaces and in the bin storage area;
• Water had also seeped into lots 1 and 2, causing damage to the carpet and skirting board;
• Similar problems were experienced at the entrance to the building where the original tiles had lifted along with the underlying waterproofing membrane. A new membrane had to be laid in that area as well as new slip resistant tiles;
• Tradesmen had advised that continued water seepage through the podium slab would cause the steel reinforcing bars to corrode which would cause spalling or “concrete cancer”;
• Tiling contractors advised that the original tiles were unsuited to outdoor applications and there had been a number of “slips/ falls” on the tiled areas over the years;
• Three quotations were then obtained and submitted to the last annual general meeting. During that meeting owners were referred to the adjudicator’s decision in Costa D’ora Apartments (Ref: 018 -2006) where it was determined that the body corporate was responsible for replacement of a waterproofing membrane on a balcony which also provided shelter to the lot below; and
• By the time that the work was due to commence, Mr. Spano was no longer in business. The body corporate therefore engaged RSQ Rectification Services, which was undertaking identical work nearby, at Costa D’ora apartments.

Analysis

[9] As mentioned above, the applicants seek the following outcomes:

That the owners of units 1 and 2 bear responsibility for the cost of re-tiling their balconies;

That motion 13 on the agenda for the 2011 AGM be declared invalid as it included misleading and incorrect information.

[10] The applicants argue that the two balconies in question are not part of the common property and that individual owners are responsible for tiling work within the boundaries of their lot. Therefore, it is argued that the body corporate has wrongly paid for the re-tiling of the balconies.
[11] The body corporate argues that while the subject areas were within the boundaries of lots 1 and 2, the work was necessary to remedy the leakage of water into, and through, the concrete slab floor. It is further argued that the decision to pay for the work was consistent with previous adjudicators’ decisions including Costa D’Ora Apartments (018-2006).
[12] In addition to the application and submissions, I have had the opportunity to peruse a number of documents including Building Format Plan SP115333, minutes of the 2011 AGM, various quotations and a report from “Rectification Services Queensland” dated 30 July 2011.
[13] The minutes of the AGM, held on 8 January 2011, record a resolution by 7 votes to nil:

that the body corporate shall engage the services of a professional tiling contractor to overlay a new non-slip floor over the existing loose/ slippery tiles on the common property podium slab of the building with the overlaid tiles having a high in non-slip surface and further that the preferred colours are to be in keeping with the building colours; and

that the body corporate committee be empowered to accept the quotation from “Roberto Spano Tiling – BSA Licensed Tiling Contractor” (Attached) which shall provide for the laying of a full tile overlay over all paving tiles on the common area podium slab and entry steps to said area as specifically detailed in the quotation and at a cost of $19,800 including GST with 50% of the project costs to be met from existing funds held in the sinking fund and the balance of payment to be provided by the registered owners of lot 1 and lot 2.

[14] By the time that the work was due to commence, Mr. Spano was no longer in business. The body corporate therefore engaged RSQ Rectification Services, which was undertaking identical work nearby, at Costa D’ora apartments. Those apartments had been built by the same builder and were experiencing similar waterproofing problems. RSQ Rectification Services agreed to undertake the work at the same cost as Robert Spano, but discovered that the membrane was defective and that the builder had attempted to remedy the situation by laying a second layer of tiles. The total cost therefore increased to $25,860 although the owners of lots 1 and 2 have offered to pay the cost of the tiles.
[15] It is evident that the balcony areas were stripped back to bare concrete and a new waterproofing membrane applied to replace the original waterproofing membrane. New bedding material and tiles were laid on top of the new membrane.

• [16] A report from Rectification Services Queensland dated 30 July 2011, states that:
  • The membrane which was already very thin and unlikely to provide protection against the ingress of water and chlorides, had been breached by cracks in the slab; and
    • All tiles and bedding material was removed because (1) the existing tiles did not meet Australian Standards and posed a significant slip risk and (2) there was a high risk that the concrete slab below would deteriorate as the waterproofing membrane was defective.

[17] As a general rule, an owner of a lot is required to maintain the lot in good condition[4]. However, an important exception to the general rule arises under section 159(2)(a)(iii) of the Standard Module which provides that if a lot is created under a building format plan (as is the case here), the body corporate must maintain in good condition “roofing membranes that are not common property but that provide protection for lots or common property”.
[18] More specifically section 159 of the Standard Module Regulation provides as follows:

159 Duties of body corporate about common property

(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 community titles 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 structures providing protection;

(iii) essential supporting framework, including load-bearing walls.

................................................

Conclusion

[19] Casa Del Rey is a six storey concrete and block building, registered on a building format plan. Level A consists of a basement area below a suspended concrete podium slab. Lots 1 and 2 are located on level B which is the upper side of the podium slab.
[20] It is evident that the waterproofing membrane on the podium slab was defective as evidenced by the presence of efflorescence and water staining on the underside of the slab and leakage of water from the balconies into lots 1 and 2.
[21] Given that the balconies on level B form part of the roof to the level A basement area, the body corporate is responsible for maintenance and repairs to the waterproofing membrane under section 159(2)(a)(iii) of the Standard Module. Where a waterproofing membrane needs to be replaced, it is generally necessary to strip the floor back to bare concrete and the body corporate is also responsible for consequential costs.
[22] While I believe that the body corporate was obliged to repair or replace the defective water proofing membrane, I do not believe that the engagement of Rectification Services Queensland was properly authorised. In such circumstances the appropriate course of action is to submit a motion to the next general meeting to ensure that such expenditure is ratified.
[23] The ability of the body corporate in general meeting to ratify expenditure incurred by the committee, was recently confirmed by the Court of Appeal in Warren v Body Corporate for Buon Vista [2007] QCA 160 where it was held that the body corporate in general meeting could ratify the engagement of a service provider in circumstances where the cost of the engagement exceeded the relevant limit for committee spending.
[24] In the circumstances I believe it is appropriate to order that the body corporate for Casa Del Rey is to include on the agenda for the next general meeting, a motion to ratify the engagement of Rectification Services Queensland to undertake remedial work on the podium slab, including removal of original tiles, application of a new waterproofing membrane and laying of new tiles.
[25] I believe the application should be otherwise dismissed.

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[1] Sections 227,228, 276 and Schedule 5 of the Act
[2] Section 276(1)(a) of the Act
[3] Section 271 of the Act
[4] See section 170 of Standard Module Regulation