Insights

Water Leaks and Common Property – who is liable?

When it rains, it sometimes pours in Melbourne. As we publish this blog in late 2022 Australia is experiencing one of its wettest years on record with potentially more to come. All the more reason to ensure you understand your rights when it comes to water leaks and your property.

If you have an entry of water or unreasonable flow of water to your apartment – are you liable to pay for the damage and repair, or is it the responsibility of the owner’s corporation or another lot owner? This will depend on the cause of the water leak and where it is emanating from, which further requires interpreting the plan of subdivision and determining the boundaries between common property and the lots.

The Water Act 1989 (VIC) (“the Water Act”) deals with the management of Victoria’s water resources, including the flow of water from one property onto another. The Water Act requires that you must establish there was an unreasonable flow of water from someone else’s property to yours. To understand this, we must first understand what’s meant by flow.

The Water Act defines flow as:

discharge, release, escape, percolation, seepage and passage, and includes both surface and underground flow.

Next, it needs to be established that the flow was unreasonable. The Water Act sets out a range of ways in which a flow is considered unreasonable. Two key ways are if:

  1. The person (this could be the owner’s corporation) failed in their duty to do something to prevent the flow of water; and
  2. A reasonable person could have predicted that damage may occur from the flow of water.

Assessing whether the flow of water is unreasonable and the location of the water leak will inevitably help in determining whether you, another lot owner or the owner’s corporation is responsible. This means, it is  imperative that if there is water damage at your property, you engage a professional to interpret the plan of subdivision to assist in determining whether the flow of water is considered unreasonable as outlined in the Water Act and to assist in establishing the precise location of the water leak i.e. is the water leak emanating from within the title boundaries of your apartment or from common property.

Interestingly, changes to the Owners Corporation Act 2006 that commenced on 1 December 2021 provide that whether or not there is a claim under the Water Act, if water falls on common property, it is deemed to be part of the common property allowing lot owners to take action against an Owners Corporation for flows of water from common property.

A Case Study for context

We discuss the case of Davies v Owners Corporation 1 PS414649K [2019] VCAT 1159 where there were water leaks to two apartments. The issue was determining whether the owner’s corporation took reasonable steps to prevent the flow of water into these apartments.

Background to the case

  • The applicants are the owners of two apartments on level 8 of an apartment building in St Kilda Road, known as The Griffin Park Regis. Ms Davies owns apartment 83 and Ms Ellis owns apartment 84.  Their apartments have been severely damaged by water flowing from above into their ceiling cavities and then into their living spaces.  Ms Davies and Ms Ellis gave evidence about the economic, emotional and health effects this flow of water has had on their lives.
  • Destructive testing carried out during the course of this proceeding revealed that the problem of water leaks has existed for a considerable period of time and must have been known about by persons other than the applicants. For example, at some point in the past, unbeknown to the applicants, drip trays had been installed in their ceilings to collect the leaks from above. The drip trays were not connected to any drain so are not a permanent solution, as can be seen from the considerable water damage to internal plaster, floors, carpets and mould growth.
  • The applicants commenced the proceeding seeking damages and injunctive and other relief under sections 16 and 19 of the Act and under the Owners Corporation Act 2006 (Vic) (“the OC Act”) to have the flow of water stopped and to be able to rectify the damage to their apartments.
  • It was not disputed by any party that the flows of water are not reasonable within the meaning of section 16 of the Water Act. The experts for all parties agreed that the flows of water into the level 8 apartments were coming from above and are caused by a combination of defects in the glazed units on level 9 and defects in the balconies on level 9. The question for the hearing is whether the glazed units and the balconies are common property or are within the property owned by the owners of the level 9 apartments.
  • The first respondent (“the OC1”), was the owner of the relevant part of the common property, in accordance with ss 30 and 31 of the Subdivision Act 1988 (Vic). The other current respondents are the owners of the apartments on the north face of level 9, with the fifth respondent being the owner of apartment 91, the sixth owning apartment 92, the seventh owning apartment 93 and the eighth respondent being the owner of apartment 94.

The Decision handed down by the Tribunal

  • Based on the evidence of the applicants and the level 9 owners, the Tribunal found that the OC1 was aware of the existence of leaks since at least 2008. The OC1 was unable to show that it spent any of the settlement monies on the north side balconies. By 2013 it was apparent to the OC1 committee and manager that level 8 was still suffering from water ingress. Despite the temporary repairs carried out by the level 9 owners, the OC1 manager and chairperson were aware that the leaks were continuing. By August 2017 the OC1 had resolved to take responsibility to replace the glazed units on level 9 and in January 2018 it had approved the funds to do so. The OC1 provided no explanation as to why it did not proceed with these works.
  • Senior Member Kirton provided an analysis of a plan of subdivision which stipulated that the boundary shown by thick continuous lines are defined by buildings, the location of boundaries defined by buildings is the interior face and all structural columns, walls, slabs and beams are common property. This is a common approach used to define boundaries on a plan of subdivision
  • Senior Member Kirton of the Tribunal rejected an argument that the relevant building structures are limited to those walls which are load bearing. Whilst non-load bearing, the member held that that aluminium framed glazed panels which formed a wall and roof over part of the lot with sliding doors opening on to a balcony, are structural elements of the building, and therefore constituted common property.
  • As to the location of the boundary between a lot and common property on a balcony, Senior Member Kirton determined that the space between the ceiling of the lot below moving upwards to the balcony surface comprised of a void containing cables, pipes, drip trays and the like. Kirton SM held that the membrane, screed, tiles and decking all formed part of the lot, however the cement sheeting and joists formed part of the structure of the building and are therefore common property.
  • As a result of these findings, Senior Member Kirton was satisfied that the Owners Corporation was liable to the applicants under s. 16 of the Water Act. The applicants were entitled to relief in the form of a declaration, an injunction, as well as damages.

Key take aways from this case

  1. This case provides some clarity as to how a plan of subdivision is to be interpreted in the context of a water leak for an apartment building.
  2. Time is of the essence in determining the source of the water leak. Owner’s corporations’ may be exposed to further losses should the repair work be further delayed due to any disagreement as to the source of the damage. The delay could cause further damage to the lot owners' property.

Water leaks are not only inconvenient, but they can also potentially have health and broader structural implications. This blog and case study highlights how important it is to understand that you do have rights and you should seek immediate support and guidance as to what action you should take.

Our Property and Property Development lawyers have extensive experience in dealing with all aspects of property, real estate and property development law.  Our team of property lawyers, including an accredited specialist have assisted many clients with their property dispute especially in the case of water leaks.

If you have any questions about water leaks or would like to find out how our property lawyers can assist you with any of your property dispute needs, please don’t hesitate to contact our office on +61 3 9822 8588 or email our team here.

Insight by Sandra Le

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