Increase in Apartment Living and Rainfall

Leaky building syndrome is on the rise due to the increasing number of people living in apartment buildings with balconies and a growing amount of rainfall. The manifestation of defects and their contributions to ongoing issues in residential building work is not necessarily “the same as it ever was.”

Water Seepage: A Growing Problem

Defect Claims and Building Regulations

More building disputes now involve defect claims that feature water seepage and inundation. Building regulation has been striving to keep pace over the last decade. For example, it has only been since about 2008 that it has been common practice to seek compliance certificates for balcony waterproofing.

Building Code Requirements

Preventing Water Penetration

Performance requirement clause FP1.4 of the Australian Building Code states that building work must prevent the penetration of water that could cause:

• (a) Unhealthy or dangerous conditions, or loss of amenity for occupants; and
• (b) Undue dampness or deterioration of building elements.

Therefore, whilst ponding water (for example) may not necessarily be a breach of any specific building regulation, if it leads to water entry to the internal parts or structure of a building this can be said to be in breach of the Building Code.

Common Balcony Defects

Waterproofing and Drainage Issues

If the application of the balcony waterproofing membrane is not carried out properly or the product is not fit for purpose, water can become trapped under tiles, manifesting in drummy or lifting tiles, calcification, and cracking.

Internal Water Damage

Health and Structural Impacts

Other common water-related defects on balconies can possibly be attributed to inadequate fall of the balcony floor or insufficiently sized or inadequate drainage outlets. In worst-case scenarios, there will also be water entry into apartment interiors from balconies, particularly if the balcony floor is:

• (a) Falling toward the building, or if there is insufficient fall away from the building; or
• (b) Constructed at a higher level than the internal apartment floor.

Insufficient Flashing and Upstands

Preventing Internal Water Damage

If there is inadequate upstand flashing between the balcony tiling and the screen door entry (known as a “ranch slider” across the Tasman), or if there is an insufficient free-board or hob at the screen door entry, this can also cause water entry problems. This water entry will manifest itself in damp or mouldy interiors, moisture trapped behind skirting boards and under carpets, damage to plasterboard walls, and could potentially also lead to respiratory health problems for occupants.

Water Ingress from Above

Leakage from Higher Levels

Rather than lateral transfer of moisture, other common apartment building problems include water ingress from above, for example:

• Water leakage to an apartment interior from an inadequately waterproofed balcony on the level above; or
• Calcification and “leaching” on a balcony soffit due to water ingress from the roof or a balcony on the level above.

Basement Water Issues

Stalactites and Acidic Drips

In other apartment buildings, a common occurrence has been water entry into the basement car parking area, evidenced by the formation of “stalactites” and acidic liquid dripping from the level above. This can be attributable to such causes as inadequate waterproofing of planter boxes in common areas at ground level.

Common vs. Private Property

Identifying Responsibility

As can be witnessed, water ingress and its consequential damages in both observable and unobservable ways is a commonality in contemporary living spaces. Purchasers and renters are often unaware of these problems during viewings. The impacts it can have go beyond superficial damages and can cause internal “wet rot” in internal building materials. These issues can cause great financial stress to resolve.

Leaky Building Solutions

Owners Corporation vs. Private Property

Generally speaking, if the source of the defect is on Common Property, then it will be the Owners Corporation that has the legal capacity and indeed the duty to take steps to remedy the problem. In certain cases, this may include the right to take legal action against a builder or other party considered to be responsible for the building or design defect.

Legal Action and Responsibility

Common Property and Private Property Distinctions

Conversely, if the loss and damage sustained from the building defect is caused to Private Property, for example, water damage to an apartment interior, then typically it would be the owner of the apartment and not the Owners Corporation that has the legal capacity and standing to commence a legal proceeding against the party at fault.

Jurisdictional Variations

State and Territory Differences

There may be legal subtleties that distinguish the Common versus Private Property situation between the separate State/Territory jurisdictions. Nevertheless, it is not uncommon to have legal proceedings for alleged defects in an apartment building that involve the Owners Corporation as Plaintiff (for the Common Property defects) and a series of private lot owners as co-Plaintiffs in a “class action,” to the extent that there are building defects that impact on their private apartments.

Property Boundaries

Mid-Point Distinctions

A common theme in Australian jurisdictions is that the dividing boundary between Private Property and Common Property land is the mid-point or median line between the internal face of a private apartment or lot and the external face. The front façade of a balcony balustrade, insofar as it forms part of the external façade of the building, will be regarded as Common Property which the Owners Corporation has a duty to maintain. However, if one looks to the balcony floor, decorative features such as external tiles may be regarded as part of the Private Property pertaining to an apartment. Conversely, functional components (rather than decorative) such as the waterproofing membrane beneath the tiles are arguably Common Property.

Case Studies and Legal Precedents

Waterproofing Responsibility

In the New South Wales case decision of The Owners SP 35042 v Seiwa Australia Pty Ltd [2007] NSWCA 272, it was held that the waterproofing membrane laid under the tiles on a balcony formed part of the Common Property. If the defect is something pertaining to the structure or the functional operation of the building, it is more likely to be seen as a Common Property issue. For example, the balcony slab beneath the tiles is part of the building structure.

Consistent Themes Across Jurisdictions

ACT Supreme Court Decision

This is a common theme in jurisdictions outside Victoria and NSW also. In the ACT Supreme Court case of The Owners Units Plan No 1917 v Koundouris [2016] ACTSC 96, the Judge declared at paragraph 580:

“…in my view the waterproofing is better treated as a part of the slab because it is a functional rather than decorative treatment to the slab and is practically integrated with it. It is distinct from a finish such as tiling or painting.”

On this basis, the waterproofing membrane beneath the balcony tiles was seen as being an area that was the responsibility of the Owners Corporation to maintain, as part of the Common Property. This is consistent with the NSW decision cited above in Seiwa Australia.

In contrast, in Victoria at the VCAT level a differing conclusion has been reached on where the separating line is between common versus private property and whether or not the waterproofing membrane should be regarded as private or common property. 

There is little doubt across the jurisdictions that the floor tiles on a balcony, which can present as delaminating or lifting in many defect situations, are regarded as the private property of the lot owner. That said, the actual problem leading to the manifestation of distress is sourced in the waterproofing, or the lack thereof. 

In the VCAT decision of Owners Corporation PS 508732B v Fisher [2014] VCAT 1358, the Tribunal found (in relation to a conventionally drawing Plan of Subdivision) that the balcony waterproofing membrane lay within the individual lot property boundary, making it part of the private property of the apartment.

About the Author

Justin Cotton, Director and Head of Practitioner Advocacy at Lovegrove & Cotton, is an expert in strata and owners corporation disputes with over 23 years of legal experience. He is a leading authority in construction law and building regulatory compliance.

Disclaimer

This article provides general information and is not legal advice. For specific legal guidance, contact Lovegrove & Cotton Lawyers.

Image Acknowledgements:

The digital renders used in this article were developed collaboratively by Lovegrove & Cotton and ChatGPT. The photo images that are not the digital renders are stock images sourced from Shutterstock.

Lovegrove & Cotton: Serving Strata Communities and Owners Corporations

For three decades, Lovegrove & Cotton have represented Strata Communities and owners corporations with the resolution of building defects claims across Melbourne, Canberra, Sydney, and Queensland. For assistance with resolving multi unit apartment building disputes, visit our Strata Community landing page on our website. If you require help resolving a leaky building claim visit our Leaky Building claim landing page on our website and email enquiries to enquiries@lclawyers.com.au, or call (03) 9600 4077.