Court Ruling Backs Owners Corporations

The NSW Appeals Court has overturned a 2006 Supreme Court ruling that the owners of the Hunter Connection, a commercial strata complex in Sydney, had to upgrade the complex’s air conditioning system to accommodate three new food outlets.

According to the Sydney Morning Herald, appeals court judge Reginald Barrett said “replacement connotes no more than the installation of one thing in the place of another to achieve functional equivalence”, adding that “anything amounting to alteration or addition for the purpose of improving or enhancing the common property is beyond the concept of renewal or replacement”.

So it is now settled law that common property in good repair and operating as intended does not have to be renewed or replaced, says leading strata lawyer Beverley Hoskinson-Green. “The owners corporation does not have to deal with any future eventuality to meet a demand the instant a lot owner might make it.”

Owners corporations are legally compelled to maintain and repair common property but the NSW Appeals Court has ruled that simply means replacing like for like. It doesn’t mean bringing services and infrastructure like lighting, plumbing, power supplies, lifts or phone lines up to modern standards. Executive committees can now reject individual owners’ calls for, say, increased electrical capacity for airconditioning or improved plumbing to deal with additional bathrooms.

According to the Sydney Morning Herald, the ruling could have a major impact on the roll-out of the national broadband network as owners corporations will be able to argue that it’s an optional improvement rather than a compulsory replacement.

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