High Court Ruling Affects Apartment Owners

A High Court presiding over building deficiencies in a multimillion-dollar apartment complex in Chatswood sets to make it difficult for owners to search for legal compensation for substandard apartments.

A recent ruling of a multi-million dollar apartment complex in Chatswood

The two year battle ending in October 2014, has seen the High Court rule ,  that the owners corporation of serviced apartments in a 22-storey building in Railway Street could not sue the builder, Brookfield Multiplex, to recover the cost of fixing alleged defects in common areas.

The ruling comes prior to new building laws that are set to take place in NSW at the beginning of December, which seek to limit the right of the apartment owners for property defects.  

Owners Corporation Network chairman Stephen Goddard, a strata lawyer, specified the State Parliament should acknowledge the “gaping hole in consumer protection” for residential apartment owners.

The High Court found that contracts relating to the construction and sale of the apartments set out the situations in which the builder or developer was liable for defects in building work.

The decision initiated that Brookfield did not owe the buyers of the apartments a separate duty of care under the law of negligence to avoid causing them economic loss resulting from alleged defects in common areas, such as cracks in render on the facade of the building. Brookfield did not have a contract with the owners corporation.

Mr Goddard said he understood residential owners corporations would be in the same position.

Source: http://www.smh.com.au/nsw/high-court-decision-bad-news-for-apartment-owners-20141008-10rw0e.html