watergate - the decision & its implications
DESCRIPTION
Strata Briefing for Owners Corporations & Strata ManagersTRANSCRIPT
© Copyright TEYS Lawyers 2013 www.teyslawyers.com.au
WatergateThe Decision & Its Implications
April 2013
© Copyright TEYS Lawyers 2013 www.teyslawyers.com.au
Tom Bacon on the Watergate Decision
Michael Teys on the Wider Implications
Tonight’s Presentations
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About Tom Bacon
Tom joined TEYS Lawyers in June 2010 from Auckland, New Zealand,
with five years' experience in dispute resolution, local government/ town
planning and civil litigation. Tom advises on all aspects of strata
community disputes in the Australian states, with current matters in
NSW, Victoria and the ACT.
Tom is an accredited LEADR mediator, and places a high emphasis on resolving disputes
without the need for protracted litigation. In his previous roles, Tom acted on numerous high-
value local government and environment appeals, and public indemnity insurance claims.
Tom has regularly appeared for clients in both mediations and hearings in the District,
Environment and High Courts of New Zealand, and in NSW in the Consumer, Trader &
Tenancy Tribunal (CTTT) ,the Local Courts and Supreme Courts.
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The Problem at Partygate
5 operators 40 units
Average stay less than 3
nights
Cost of additional security
and cleaning
Diminution of valuable units
Owners moving out
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Powers Under the OC Act 2006
S.138 – Power to make Rules of the Owners Corporation – ie, to restrict or prohibit lot owners from letting units for commercial use, or for periods of less than 30 days
S.140 – a Rule will be deemed to be of no effect if inconsistent with another Act or Law (ie, Residential Tenancies Act 1997)
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Docklands Zoning / Planning Controls
No town planning permit required for commercial activities in prescribed Docklands
areas
Docklands is a mixed-use zone, designed to cater to a variety of residential and commercial needs
in close proximity to each other
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City of Melbourne Enforcement
S. 106 Building Act 1993 – the use of the units contravenes the occupancy permit for the building
The occupant characteristic, fire safety needs and reaction to a fire or other emergences have varied from that for which the building was originally designed, approved and intended to be used
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Building Code of Australia
Class 2 - a building containing 2 or more sole-
occupancy units each being a separate dwelling
Class 3 – a residential building, other than Class 1
or 2, which is a common place of long term or
transient living for a number of unrelated persons,
including (b) a residential part of a hotel or motel…
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Meaning of Dwelling
Derring Lane P/L v Port Phillip City Council (No. 2) (1998) 108 LGERA 129
“A building constructed for the purposes of people dwelling there permanently or for a considerable period of time, or having in that building their settled or usual
abode”
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BAB Findings
The building’s fire safety and construction design never contemplated this commercial use, and may trigger the building’s
fire safety systems to be reviewed and re-designed
The use of a hotel business is not permitted within Class 2 buildings and is considered a change of use
The Appellants were using the apartments like a ‘hotel’ business
© Copyright TEYS Lawyers 2013 www.teyslawyers.com.au
Michael Teys is the Founder and Principal Lawyer of TEYS Lawyers. He
has a Bachelor of Laws and practices exclusively in the area of strata title
law. He is a Fellow of the Australian College of Community Association
Lawyers. He was formerly an Adjunct Lecturer with Charles Sturt
University. He appears weekly on SKY News Business Channel's Property
Success with Margaret Lomas and is a regular panellist for the property
edition of Your Money, Your Call for the same channel. You can read
Michael’s blog at www.michaelteys.com and follow him on Twitter at
@MichaelTeys.com
Teys Lawyers practice nationally in strata title law representing owners corporations, bodies
corporate and apartment owners. The firm’s practice groups include building defects, strata
community disputes, strata titles property law, by-laws and levy collection.
Subscribe for their free e-newsletter StrataSpace and find out more about them at
www.teyslawyers.com.au
About Michael Teys
© Copyright TEYS Lawyers 2013 www.teyslawyers.com.au
Watergate’s Wider Implications
Residential Class 2 dwelling does not include the use by
short term guests with hotel-style services
All strata owners and managers where lots are used this way
Breaches Building Act and vitiates
insurance policies
Docklands, Victoria, Australia
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The Fundamental Strata Duties
To act honestly and in good faith To exercise due
care and skill
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The Chain of Legal Liability
OC (S.5)
Committee (S.117)
Managers (S.122)
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The Statutory Duty to Insure Strata
S.59 building insurance
S.60 public liability
Insurance Contracts Act
(1984) (Cth) duty of
disclosure
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Alteration of Risk Exclusion
You must promptly advise
us…….. if the nature of the
occupation or other
circumstance affecting your
insured property is changed in
such a way as to increase the
risk of loss or damage or the
likelihood of liability losses
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Strata Bodies Have Unlimited Liability
An uninsured owners corporation or body corporate must still pay a damages award
Unlike shareholders and club members, lot owners do not have limited liability
An administrator will be appointed to strike a levy to cover damages and costs
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Recommended Action
Make enquiries about use
Report improper use to local authorities
Notify insurer
Join appeals / prosecutions
1.
3.
2.
4.
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About Nicole Wilde
Nicole joined TEYS Lawyers in September 2012 having previously
practised for four years as a Barrister and Solicitor in Auckland, New
Zealand. Nicole advises both owners corporations and lot owners in
respect of all types of Strata Community disputes throughout Australia.
Nicole has advocacy experience in a range of Courts and Tribunals and is dedicated to
providing clear, quality legal advice and representation. In her previous roles, Nicole acted on
high-value construction defect proceedings on behalf of plaintiffs against local government
and contractors. She has been involved in all stages of the litigation process. In her role as a
solicitor for the Office of the Crown Solicitor in Auckland, Nicole provided advice and
prosecutorial representation to the regulator of the property agents industry.