DAMAGE TO PROPERTY

Occasionally in bodies corporate, property can be damaged through no fault of the property’s owner. The property’s owner may be an owner of a lot, an occupier or the body corporate.

Under the Body Corporate and Community Management Act 1997 (Qld) (the Act), a property owner may seek reimbursement or an order for repair, in certain circumstances, through our office.

This article will explain the application process, the thresholds required to lodge an application for dispute resolution, limitations on orders and relevant adjudication orders.

It is important to remember that any order is based on the circumstances of the parties involved and is not a precedent.

Section 281

Section 281 of the Act provides that, where an adjudicator is satisfied the applicant has suffered damage to property because of a contravention of the Act or the community management statement (CMS), the adjudicator may order the person who they believe, on reasonable grounds, to be responsible for the contravention to either:

1. carry out stated repairs to the damaged property; or
2. pay a fixed amount for reimbursement for the repairs.

Limitation of section 281

There are limitations on an adjudicator’s order for damaged property. An adjudicator cannot make an order where:

• the costs of repairs are more than $75,000; or
• the reimbursement amount is more than $10,000.

While an adjudicator is limited to the amounts set out above, a property owner can seek a remedy through a court with a greater jurisdiction. If a property owner is seeking recompense beyond these limits, they can seek legal advice.

Section 281 of the Act sets out what an adjudicator can order, provided they are satisfied that the complainant has met key elements of the section. However, in most cases, parties to these types of disputes will have to try to resolve the dispute themselves including by participating in conciliation before lodging an application for adjudication.

More information about conciliation and adjudication can be found on our website.

Parties to the dispute

Our office can only provide dispute resolution services to certain parties and certain combinations of parties. Section 227 of the Act specifies who is eligible to lodge a dispute resolution application and the eligible party the application can be made against. A body corporate, owners, occupiers, letting agents, service contractors and body corporate managers may be parties to a dispute.

For example, if your property suffered water damage because an upstairs lot owner’s shower leaked (something an owner has a responsibility to maintain), you would have grounds to bring an application to our office under section 227(1)(a) against the owner of the property.

Conversely, if your visitor’s car was damaged because of a burst pipe in the car park, they (not being an owner or occupier, and assuming they do not stay at the property often enough to be classed as an occupier) would not have grounds to make an application for a remedy under section 281. They may need to seek legal advice on the options available to them.

Preliminary step – Self resolution

Before lodging a dispute application, you should first attempt to amicably resolve the dispute yourself. If you request the body corporate to act, you should propose a motion to be considered at a committee meeting or a general meeting and as soon as appropriate.

However, if you require another owner or occupier to remedy the issue, then a request in writing can be made directly to the other party.

When proposing a motion, or making a written request, you should consider advising the other party of the action you are seeking. If it is for reimbursement, you may provide a copy of an invoice and ask for a specific sum by a designated date.

If the request is for damage to be repaired, it may be prudent to provide a quotation and a reasonable timeframe for the works to be completed.

Establishing grounds for your application

Damage to property

Section 281 of the Act specifically relates to property damage.

Section 281 applies not only to common property, such as land or a building but also to personal property, such as a motor vehicle or furniture. An example of the type of damage covered under section 281 is soiled carpets after water ingress caused by a failed common property pipe. Carpets are generally not covered under the body corporate’s building insurance, and some lot owners struggle to get the body corporate or person(s) responsible to agree to replace or fix carpet. This is where section 281 may offer recourse to the lot owner.

General damages

Section 281 is contained to repairs and reimbursement for repairs to property and therefore does not extend to general damages (for example, loss of rent).

Nevertheless, other courts with greater jurisdiction may award general damages. For example, in MAGOG (NO. 15) Pty Ltd v. The Body Corporate for the Moroccan [2010] QDC 70, the District Court awarded a lot owner loss of rent, plus interest, after the body corporate failed to maintain a waterproofing membrane that attributed to the damage to property and loss of rent.

Contravention of Act or CMS

Evidence should be included in an application that has claimed a contravention of the Act or CMS.

Identify the specific cause

When explaining the grounds of your application, you may include the chain of events that led to the damage. For example, if water ingress caused damage to the property, then specify the cause of the water ingress, which may be a failed waterproofing membrane. If you do not know the cause of the water ingress, you may need to engage a suitably qualified person to investigate and report on the cause of the issue. A copy of the report should be included with any dispute application to the BCCM.

Identify a contravention

Once the exact cause has been determined, it must be established that a contravention of the legislation or by-laws by a relevant party is related to the issue. Without identifying a relevant contravention, the application may not succeed (see, for example, Qube Broadbeach [2022] QBCCMCmr 90).

You can access the Act and regulation modules on our website here. Your CMS, which contains the by-laws, is available from Titles Queensland.

Common contravention – failure to maintain

A common example of a contravention is where a party has failed to maintain the item related to the cause of the damage.

If a party has a duty to maintain an item or area, it has a strict liability to do so. It is not relevant whether a party knew, or could not have known, the item or area was in disrepair. A party is not excused, even if they take swift action to address the issue once it has come to their attention. (see, for example, MAGOG (NO. 15) Pty Ltd v. The Body Corporate for the Moroccan [2010] QDC 70).

Maintenance responsibilities are largely set out in the Act and regulation modules. To see who may be responsible for the cause and what other sections of the legislation may apply, please see our webpages on maintenance which include common topics such as:

• Utility infrastructure maintenance
• Building format plan maintenance
• Standard format plan maintenance

If you require further general guidance on maintenance responsibilities, you can submit an online enquiry to our information service. You can also call our information service on 1800 060 119. Please note, we can give general guidance on the legislation only and cannot provide legal advice or rulings.

Example of contravention

A common example of a contravention is when a pipe, carrying water to several lots, has burst and caused water damage to a lot. If the pipe is classed as common property, under section 20 of the Act, the body corporate is responsible for its maintenance. Therefore, the body corporate may be responsible for the damage the burst pipe has caused. A party who bears a maintenance obligation is strictly liable for any maintenance failure. Whether the party knew or did not know the pipe may burst is immaterial to a claim under section 281.

Example of contravention that would not satisfy section 281

Hoses that connect appliances such as sinks, washing machines, or dishwashers to waste pipes can fail. Under section 20 of the Act, these types of hoses are generally not considered common property as they are located solely within the boundaries of a lot and service that lot, meaning that the body corporate is not responsible for their maintenance as provided in section 180 of the Standard Module.

Under section 211 of the Standard Module, the lot owner must maintain the hose in good condition and replace it when necessary. Damage that occurs to the owner’s own property because of their hose breaking would not be covered under section 281 for that lot owner. However, the lot owner may be responsible for subsequent damage to other property under section 281. For example, if the water leaked into the lot below.

Examples of adjudicators’ orders

The following decisions are examples of applications decided under section 281. Each case was decided on its individual circumstances.

Where the body corporate refused to rectify damage that was not covered under insurance – The Nelson [2022] QBCCMCmr 268

A lot owner suffered extensive damage to their lot after the building’s sewerage pipe had been blocked on the ground floor. It caused sewage to back up and overflow into the owner’s lot. The body corporate was responsible for the maintenance of the sewerage pipe because it was classed as common property under section 20 of the Act.

Unfortunately, the body corporate’s insurer would only cover part of the damage to the lot’s kitchen and would not cover other items such as the carpet and the floating floor. The body corporate believed the lot owner was responsible for insuring their own property and was responsible for any damage not covered by the body corporate’s insurance policy.

The Adjudicator said at [43] that:

Whether or not the applicants do, or should have particular insurance does not put the onus on them if another person or entity causes damage to their property. The person or entity [who caused the damage] will be liable for the damage and the fact that the person or entity responsible for the damage does not have insurance to cover the damage they caused does not alleviate them from the liability for compensating the person who has suffered property damage. Therefore, regardless of whether the body corporate has insurance which covers the relevant event or damage, or whether the applicants have insurance which covers the relevant event or damage, the body corporate is responsible for the damage. 

The body corporate was ordered to address all necessary rectification works regardless of whether it was covered under insurance.

In summary, whether the property was covered under the body corporate’s insurance was irrelevant to the application of section 281 of the Act.

Where it was immaterial whether the body corporate took prompt action to address a leak and where that caused damage to personal property – Waterline at Oceanside [2021] QBCCMCmr 44

An occupier of a lot suffered damage to their car’s paintwork because of a leaking pipe in the body corporate’s common property car park. The body corporate was responsible for the maintenance of the pipe because it was classed as common property, under section 20 of the Act.

The body corporate took action to fix the pipe once it became aware of the issue. On this basis, the body corporate’s insurer would not rectify damage to the vehicle as it was of the view that the body corporate took action to mitigate further damage after it became aware of the leak, and it was satisfied that the body corporate had not been negligent.

The Adjudicator cited other matters (including MAGOG (NO. 15) Pty Ltd v. The Body Corporate for the Moroccan [2010] QDC 70) and confirmed that the body corporate had a strict liability to maintain the pipe before it fell out of condition. It was immaterial to claim that the body corporate had acted promptly once it was aware of the leak. The case also illustrates that section 281 can apply in the case of damage to personal property.

The body corporate was ordered to reimburse the occupier for the repair of the paintwork of the car.

Where no breach of the legislation or CMS was established – Qube Broadbeach [2022] QBCCMCmr 90

An owner of a lot lodged a dispute application against the body corporate for an order under section 281 for damage to their car that was allegedly caused by a contractor engaged by the body corporate to undertake high-pressure water cleaning of the car park. The body corporate denied liability and said it had used the same contractor in the past, without incident. The contractor denied causing the damage or working in a way likely to have caused the damage.

The Adjudicator noted that a party is not necessarily liable for the actions of an independent contractor engaged by them if the contractor is competent and acting under their own work system. The adjudicator was not satisfied that the body corporate itself had contravened any provision of the Act or the CMS and dismissed their application.

Where a lot owner was required to reimburse another lot owner due to a leaking shower tray – Tracie Court [2015] QBCCMCmr 207

An applicant lot owner experienced water damage in their living room. A leak detection report showed the respondent lot owner’s bathroom had insufficient waterproofing, causing water penetration to the applicant’s lot. The respondent lot owner had a responsibility to maintain their lot in good condition under the legislation (Standard Module, section 211) and the adjudicator found that this section was being contravened by the waterproofing membrane not being in good condition. The respondent lot owner was ordered to repair the damage to the applicant’s lot, as well as undertake the necessary maintenance to the bathroom’s waterproofing membrane.

This article was contributed by the Commissioner for Body Corporate and Community Management.