What do you do if you want to do work (or have done work) but you can’t get approval of your owners corporation?
Section 126 of the Strata Schemes Management Act 2015 enables a lot owner (or lessee in a leasehold scheme) to apply to the NSW Civil & Administrative Tribunal (also known as NCAT) for an order requiring the owners corporation to consent to works.
Section 126(1) deals with works proposed to be carried out by the lot owner that have been unreasonably refused where the work relates to either minor renovations or other alterations directly affecting the owner’s lot or the carrying out of repairs to the common property or any other property of the owners corporation directly affecting the owner’s lot.
This article focusses on section 126(2) which provides for retrospective approval for works. If the works have already been carried out section 126(2) provides that the Tribunal may make orders authorising the work where the owners corporation had unreasonably refused to provide its consent to the work.
The power of the Tribunal to make orders under s126 came into question in the recent case of Endre v The Owners – Strata Plan No. 17771  NSWCATAP 93. In this case a lot owner in a three-lot scheme had applied to the Tribunal for authorisation for their works (which included six skylights) that had been installed without approval. The Tribunal refused the application and ordered the works be removed. The lot owner appealed and again sought a work approval order under section 126 to the effect that the owners corporation’s refusal to consent to the skylight installation was unreasonable and that they be permitted to keep the skylights.
The Appeal Panel, in making its decision made some important findings which were:
- The lot owner had a right of appeal on a question of law due to the inadequacy of reasons provided by the Tribunal in the first instance.
- There is a jurisdictional limit on section 126 which means that the Tribunal only has the power to make orders under this section when:
- An owners corporation has unreasonably refused consent to the relevant works; and
- These works are to common property or any other property of the owners corporation directly affecting the lot owner’s lot. Notably, the requirement of “directly affecting” the lot owners lot does not require the works to have an immediate physical connection to the lot owners lot.
- A works approval order under section 126 is not limited to only minor renovations but may authorise major works;
- The question of unreasonableness is to be determined having regard to the facts that existed at the time the decision was made and the Tribunal must look at all the circumstances. While a lot owner’s view may be considered it is only one factor to be taken into account;
- Section 126(4) allows the Tribunal to take account of the conduct of the parties to the proceedings in determining whether or not to make a work approval order. This includes whether the lot owner sought consent prior to conducting the work. The conduct of the owners corporation is relevant both to whether the refusal to consent to the work was unreasonable and whether a work approval order should be made and if so, on what terms;
- A work approval order may grant approval for works on terms including requiring the benefited lot owner to repair and maintain the common property affected by the order.
In the case the Appeal Panel in deciding that the owners corporation’s refusal to consent to the works was unreasonable found it relevant there was no expert evidence as to the adequacy (or otherwise) of the ventilation in the attic space or the aesthetic effect of the skylights, that the lot owner had mistakenly but genuinely believed that an existing exclusive use by-law had authorised her to conduct the work, that another lot owner had carried out work to their exclusive use attic area including constructing an attic balcony demonstrating that it was not the intent of the owners corporation to retain the building in its original state, the skylights had been installed for a number of years before the lot owner had sought the owners corporation’s authorisation, the owners corporation had repaired the roof around the skylights without dissent and that the lot owner had agreed to repair and maintain the skylights.
Why is this case important for lot owners and owners corporations? The Appeal Panel has set clear guidelines around when works approval orders can be made. It also indicates that if an owners corporation’s conduct implicitly approves unauthorised works (for example by not taking timely action for their removal or by conducting works around the unauthorised works and not making the common property area good) then it may be difficult for the owners corporation to reasonably refuse retrospective approval for the works.