LIABILITIES OF APARTMENT WATER DAMAGE.
The liability for water which flows from one property and causes damage to another person’s property is an issue of increasing prevalence in Victoria as the rates of apartment habitation in the State increase.
Whoever owns the property from where the flow emanates from is liable for this damage, whether this property is owned by a private owner or the owners corporation.
The relevant legislative section comes from the Water Act 1989 (“the Act”):
Section 16 of the Water Act 1989 – Liability arising out of the flow of water
(1) If—
(a) there is a flow of water from the land of a person onto any other land; and
(b) that flow is not reasonable; and
(c) the water causes—
(i) injury to any other person; or
(ii) damage to the property (whether real or personal) of any other person; or
(iii) any other person to suffer economic loss—
the person who caused the flow is liable to pay damages to that other person in respect of that injury, damage or loss.
“Flow” is defined by section 3 of the Act:
“’Flow’ in relation to water includes discharge, release, escape, percolation, seepage and passage, and includes both surface and underground flow”.
Section 20 of the Act gives the determining factors of whether a flow is reasonable, with account taken of all of the circumstances including the following matters:
“(1) In determining whether a flow of water is reasonable or not reasonable, account must be taken of all the circumstances including the following matters—
(a) whether or not the flow, or the act or works that caused the flow, was or were authorised;
(b) the extent to which any conditions or requirements imposed under this Act in relation to an authorisation were complied with;
(c) whether or not the flow conforms with any guidelines or principles published by the Minister with respect to the drainage of the area;
(d) whether or not account was taken at the relevant time of the likely impact of the flow on drainage in the area having regard to the information then reasonably available about the cumulative effects on drainage of works and activities in the area;
(e) the uses to which the lands concerned and any other lands in the vicinity are put;
(f) the contours of the lands concerned;
(g) whether the water which flowed was—
(i) brought onto the land from which it flowed; or
(ii) collected, stored or concentrated on that land; or
(iii) extracted from the ground on that land—
and if so, for what purpose and with what degree of care this was done“.
Whether a flow has occurred and whether it is reasonable in accordance with the above relevant sections is not generally contentious. The demarcation between ownership of the property from which the damaging flow emanates from can be something more difficult to define.
Private and common property divisions
In Victoria, the Subdivision (Registrar’s Requirements) Regulations 2011 reg 10 dictates where the common and private property boundaries are by the following:
(1) A boundary may be shown on a plan by reference to a building.
(2) Any building or part of a building that defines a boundary must be identifiable from the plan.
(3) If a boundary on a plan is defined by reference to a building or part of a building, the plan must specify whether the boundary is one or more of the following—
(a) Interior Face;
(b) Median (floor and ceiling);
(c) Median (wall, window, door, balustrade);
(d) Exterior Face;
(e) in some other location.
(4) Unless otherwise specified on the plan, the location of any building boundary defined as—
- Interior Face lies along the interior face of any wall, floor (upper surface of elevated floor if any), ceiling (underside of suspended ceiling if any), window, door or balustrade of the relevant part of the building. Any internal coverings, waterproof membranes and fixtures attached to walls, floors, and ceilings are included within the relevant parcel;
Balcony leaks causing damage to another’s property
Balconies can be something more complex, as ownership is defined by the purpose of the building material which has failed and given rise to the damage. Generally, this will be tiles which have become damaged or contained defects when laid or a failed waterproofing membrane.
The question of who owns tiles and waterproofing membrane on an exterior balcony was best answered in the matter of Owners Corporation PS508732B v Fisher [2014] VCAT 1358. In this decision, the Tribunal found (in relation to a conventional 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.
There is little doubt across jurisdictions that the floor tiles of a balcony which may present as lifting, cracking, “drummy” or delaminating in a water damage situation, are also regarded as private property.
The slab beneath which support the balcony has however a purely functional purpose and is part of the infrastructure, and will be regarded as common property.
Obligations to repair
Subsection 16(5) of the Water Act 1989 says:-
(5) If the causing of, or the interference with, the flow (as the case requires) was given rise to by works constructed or any other act done or omitted to be done on any land at a time before the current occupier became the occupier of the land, the current occupier is liable to pay damages in respect of the injury, damage or loss if the current occupier has failed to take any steps reasonably available to prevent the causing of, or the interference with, the flow (as the case requires) being so given rise to.
The key words here are “steps reasonably available”.
It was found in Connors v Bodean International Pty Ltd (Real Property) [2008] VCAT 454 that:
“I find that “reasonable steps” in the Act infers that the current occupier takes the necessary steps within a reasonable time….. I would allow the Respondent a reasonable time to carry out investigations, assess the results and to implement measures to ensure the unreasonable flow is ceased”.
Two 2021 VCAT decisions have further defined the obligation of “reasonable steps”. Both matters involved claims by lot owners for compensation from water damage to their units, and revealed that the Owners Corporations could be found responsible due to delay.
Davies v Owners Corporation 1 PS414649K (Building and Property) [2019] VCAT 1159
The Applicants in this matter owned two apartments which were damaged by water flowing from above the ceiling cavities of the apartments into the living spaces. Based on evidence, the VCAT Tribunal found that as the Owners Corporation were aware of the existence of leaks since at least 2008. The case was found against the Owners Corporation on the following terms, also taken from Connors:
“… I consider that the words “steps reasonably available” includes a requirement that the current occupier has a sufficient and reasonable time in which to carry out those steps after being given notice or constutive (sic) notice of the unreasonable flow is imputed. Further, that their liability in the event of them not taking reasonable steps to cease the flow after such notice is limited to the time from which such steps should reasonably have been taken.”
Dunn v Owners corporation 446158A [2017] VCAT 1893:
In the case of Dunn, the Owners Corporation commissioned a waterproofing contractor to complete works which were advised by a consultant engineer in early 2013. The waterproofing contractor went into liquidation in early 2014 and the works remained incomplete due to a dispute in who was responsible for the rectification of the works until the matter was heard in VCAT in late 2017.
However, the owner of the property also did not allow sufficient access for the Owners Corporation to repair the balcony and told the Owners Corporation that he would “attend to the matter himself” due to the discovery of an unknown gas pipe which existed within the balcony slab delaying repairs. It was decided that:
124. “When deciding an owners corporation dispute, which is what is reflected in these two proceedings, the Tribunal must consider “the conduct of the parties”, but may make any order it considers fair, so long as it is made according to law. Completion of the waterproofing of Mr Dunn ’s terrace involves the costs identified in the previous paragraph because the secondary membrane deteriorated and the screed became saturated. Delay both during Procon’s works and after Procon ceased them has meant exposure of the secondary membrane and the screed to the weather. I have found that Mr Dunn contributed to the delay in the ways I have described above. The owners corporation, through it’s contractor Procon, also contributed to the delay because Procon did not complete its works within a reasonable time. The conduct of both parties has contributed to delay, and so to exposure of unfinished works to the weather, and so in turn to the incurring of the costs identified in the previous paragraphs. Considering that conduct, I conclude that they contributed equally to it. Attempting to apportion responsibility in any other way would be artificial. So I consider it fair that each party should bear one-half of the cost.”
Guy v Owners Corporation 416326 [2018] VCAT 2027:
It is the responsibly of the owners corporation to repair and maintain property under section 46 Owners Corporation Act 2006. In the case of Guy, the owner of the lot argued that as the water had entered and damaged the owner’s property due to a failure of the Owners Corporation to maintain their own property; the cladding façade and the Applicant’s own balcony. Although the source of the water could not be entirely decided, the fact that the Owners Corporation failed to prevent the water flowing into the lot was the determining factor in awarding damages to the apartment owner.
69. “In view of the plethora of signs, warnings and portents which appeared before the OC with metronomic regularity throughout the life of the building, it is hard to see how the OC can assert that it is entitled to rely on section 16(5) of the Water Act 1989. It was clear, and the OC conceded, that it had notice of the possibility that water could flow from the façade into the applicant’s apartment”.
Conclusion
In conclusion, it is important that any property owner or Owners Corporation who is notified of a leak causing damage source advice from a reliable expert and follow the recommendations provided. Above all, it is important not to delay in responding and acting on a complaint.
Disclaimer
This article is not legal advice rather a discussion of the topic in only general terms
