Body Corporate Litigation – The Challenges
By Kim Lovegrove, FAIB, Senior Lawyer, Lovegrove and Cotton Lawyers
Invariably body corporate management companies manage body corporates. It is not unusual for body corporate management companies to be non-arm’s length or the offspring of the developers that build the very developments upon which claims may materialise. Furthermore developers often retain sizable unit holdings in their developments, hence a developer could have a cluster of apartments in a given development. Where this occurs the developer often ensures that it has representation on body corporate management committees in which case the cluster can influence the selection of the strata management company.
Although this type of nexus augers well for the unit holding developer it can prove problematic for punters who own individual units as their influence may well be negligible. Hence the not infrequent chorus by individual unit holders that they don’t feel as if they are listened too.
Body corporates are ordinarily managed by body corporate committees and the committee interacts with the body corporate management company. In like vein it is not unusual for there to be a cluster of individuals or proxies on body corporate committees who have a stake in the proprietorship of a number of apartments. Although these may be rental properties said cluster owners are able to get onto the committees because of their status and standing as land lords.
Again the interests of such clusters or their nominees may not always be aligned with those of the sole owners. For this reason we have found that when there is a building malaise, typified by defective workmanship or waterproofing aliments, the resolve to prosecute a rectification claim of the disaggregated constituents may differ to that of the aforementioned cluster. And this is where the conflict of interest may present itself.
If the cluster can control the body corporate manager or the committee for that matter, by virtue of its majority representation, then rectification litigation can be paralysed. It is a given that a cluster of persons that were involved in the construction and sale of property will not be enamoured with the idea of being defendants in legal proceedings. They may well display an entirely different disposition when it comes down to the approach to rectification, the necessity of issuing legal proceedings, choice of consultants and rectification mythology.
So it is important to recognise that in communities where there are those that comprise individuals that were responsible for the building of the as built product vis-à-vis the collective of un-aligned property owners there could well be real polarity of opinion and interests.
It is for this reason that body corporate litigation can be so cumbersome and unwieldy, somewhat akin to herding cats, or more precisely difference species of cats.
Body corporates only have jurisdiction to issue over that which is common property:
Individual unit holders also have to understand that the body cooperate only has jurisdiction to issue legal proceedings with respect to common property. This stems from the division of ownership which occurs after the building is completed. Unit owners have title to individual units, but the Body Corporate is responsible for common property. Defects which affect the whole building are usually within the bounds of common property.
Conversely, the body corporate does not have jurisdiction to issue legal proceedings with respect to that which comes within the curtilage of the individual unit holders property. So there is very little point in pressing for the body corporate to seek redress over matters such as defective internal work, be it internal plumbing, quality of finish or durability of internal items. The BC simply doesn’t have jurisdiction and in any event, may not have the will.
The Additional complication of Nuisance Claims
Nuisance claims come in all sorts of guises and manifestations, excessive noise, water proofing and water ingress. We even had conduct of a matter where there were noxious aromas wafting through the neighbourly fraternity. These claims invariably can generate a number of co-defendants. The “usual suspects” of builders, developers, engineers and architects may be in the loop. But also if per chance the water egress emanates from an apartment above, excessive noise or noxious aroma from the adjoining unit holder(s) then they can be sued for nuisance. In circumstances where the perpetrator of the nuisance is sued, there is every chance that he or she or it will join one of the above mentioned unusual suspects as a third party or co-defendant.
So how does the punter or a community of punters approach litigation in an endeavour to seek redress for fraught construction
They may wish to act totally independently of the body corporate. The disaggregated group of property owners may aggregate and consider initiating a class action. To do this there would need to be commonality of victims, suffering from a common aggravation, where the aggravation is perpetrated by a common foe for want of a better word. This way one can get every on the “same page” and there will be one tribe of individuals that share a common set of aspirations rather than two tribes at odds with one another.
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