When Strata disputes escalate

In strata, things are not always as they first seem. What is being disputed about is sometimes not really the issue which needs to be dealt with. This article is about one such situation and also gives you some tips to better manage body corporate disputes.

Recently, Strata Solve held a conference with an owner who is experiencing some significant issues to do with water ingress into their lot. You can read more about water ingress generally here. On the face of it, you might think such a conference straightforward: the owner has water ingress into their lot, they need the resultant damage to carpet and interiors addressed, an expert report holds the body corporate responsible due to failure of common property…simple, yes?

So here’s the thing: our problem solving conferences are all about taking a strata problem, breaking it into chunks and developing strategy and options for each chunk. The more this conference went on, the more it became apparent water ingress was only one of the chunks. We found general distrust towards the committee from the lot owner. The committee seemed to have several instances of conflicts of interest. Committee decision-making was not following best practice process, and that’s when decisions were actually getting made – there was a fair bit of deadlock happening. A records request from the lot owner was not being dealt with in the way we would have expected There were other maintenance issues at the building.

For our client, this was stuff they hadn’t necessarily thought of and they didn’t necessarily want to think about it. In their mind, it was all about the ingress. Why were we wasting time on these other matters? From our perspective, that broader picture is vital in correctly setting the scene and then, the strategy to go with it. Eventually, we got to a reasonable understanding. On the one hand, understanding there was a fair bit of work to do by the owner to protect their investment and assert their property rights. On the other, it did clarify where things were at and where they needed to be. That is an essential step in resolving any strata issue.

While no one can 100% predict how this scenario will pan out from here – just take a look at previous adjudicators’ orders on water ingress to see how they can be differently viewed – we do think there are some crucial takeaways from this scenario, applicable for owners as well as committees and other parties to a strata dispute, ingress or not:

1. Disputes are rarely ‘just’ about the surface issue: we find, repeatedly, that strata disputes have their genesis a long time before and about something that has little or no connection to the dispute which prompts the client to finally act. Often it is a communication issue or other misunderstanding. Regardless, the seeds of discontent are sown and then left to fester into the issue at hand
2. Knowing respective rights and responsibilities is always key: our lot owner was not 100% across their rights, such as the right to put motions to a committee and have them considered in a defined timeframe (a provision only in place since March 2021). Equally, the committee was clearly not across their responsibility to maintain common property, regardless of whether they want to or not
3. Water ingress is tough to deal with, but not impossible: one reason water ingress disputes get so challenging is because they have so many clear and distressing visual cues. Mould, damp carpets, bubbling surfaces, pooling water: it is all there, in front of you, as a constant reminder of what is going on. That’s tough to take. That said, there is a way forward, for both owner and committee and it is all about following a methodical process. Which leads us to…
4. Follow process, do not deviate from it: the instant you deviate from either a legislated or best practice process is the instant where things go awry. In our conference, it was clear that at certain points, the committee had moved away from a sound process and gotten themselves bogged down with internal politics and finger-pointing. It happens. Similarly, our owner had also gotten waylaid with tangents which, while important, were not the priority. Keeping the most unemotive, business like focus you can on the situation at hand will get you the best opportunity of success. That is, of course, easier said than done.

For our owner, there is a bit of a road ahead. That said, they are at least on that road now. As tough as water ingress – and pretty much every other strata dispute – is to deal with, there is always a solution that you can pursue and achieve. It does mean being clear about what the problem actually is, rather than what you think it might be.

This Article was contributed by Chris Irons, Strata Solve.