Common versus Private Property Defects in Owners Corporation Buildings

18 Jul 2023

Leaky building syndrome

Leaky building syndrome is on the rise due to more and more of us living in apartment buildings with balconies and increasing amounts of rain. The manifestation of defects and their contributions to ongoing issues in residential building work is not necessarily “the same as it ever was”.

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.

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.

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.

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

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 carpet, damage to plasterboard walls, and could potentially also lead to respiratory health problems for occupants.

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.

In other apartment buildings a common occurrence has been water entry into the basement carparking 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.

As can be witnessed, water ingress and it’s 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.

Whether building defects (including water related issues) are emanating from Common Property or whether they are Private Property sourced, is an important distinction to be made.

Leaky building solutions

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.

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 one would assume that it is 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.

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.

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.

Therefore, if problems like tile lifting, movement, or drummy tiles on a balcony are caused by lack of waterproofing or a failure of the waterproofing membrane the source of the problem can be said to be in the Common Property. This in turn gives rise to a power (and duty) on the Owners Corporation to take action to solve the problem.

In the New South Wales case decision of The Owners SP 35042 v Seiwa Australia Pty Ltd [2007] NSWCA 272 (lines 37-39) 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.

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 (13 May 2016), 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.

This is a Lovegrove and Cotton publication, authored by Justin Cotton


This article is not legal advice and discusses it’s topic in only general terms. Should you be in need of legal advice, please contact Lovegrove & Cotton Lawyers and our experienced lawyers will assist you based on the facts and circumstances of your case.

Lovegrove & Cotton Lawyers to the building industry

For thirty years, Lovegrove & Cotton have represented property owners, builders, building surveyors, and building practitioners in Melbourne, Canberra, Sydney and Queensland. Lovegrove & Cotton can help property owners and building practitioners resolve any type of building dispute. If you wish to engage the firm, feel free to contact us via our website, by emailing, or via phone at (03) 9600 4077.