About Us

Turnbull Bowles Lawyers is a specialist Sydney CBD legal practice providing practical and comprehensive legal services to the Strata Industry and Building and Construction Sectors.

We are committed to providing our clients with excellence in legal services. Since our inception, we have established a proven track record of successfully representing a wide range of Owners Corporations, Strata Managing Agents, Community Associations, Builders, Developers, Sub-Contractors, and Individual Lot and Property Owners.

We are a division of Forbes Dowling Lawyers, a national legal practice that specialises in Commercial Litigation, Insolvency, Debt Recovery and General Legal Services. Forbes Dowling Lawyers have branches in Sydney, Brisbane, the Gold Coast, Melbourne, Adelaide and Affiliates throughout Australasia.

Strata & Community Title News

Factsheet: Steps an Owners Corporation needs to take to pursue Legal action against a Builder

1. Time Limitation Periods Regard should be had for the statutory time limitation periods to commence proceedings against the builder who carried out residential building work. These time periods are set out in the Home Building Act 1989 (“the Act”). Presently, the time periods to make a Claim are 6 years for structural defects and 2 years for non-structural defects. The time period runs from the date of the occupation certificate or in the absence of an occupation certificate the last date the builder attended the property and was on site. Recently the Home Building Amendment Act 2014 was passed through Parliament which has amended the definition of defects expounded in the Act to major structural defect. Major defect needs to be in a “major element”, which is essentially a severe defect. The amendments are likely to come into force by way of commencement on or before 1 December 2014 and will apply to all claims where the building contract was entered into on or after 1 February 2012. Any building contract entered into prior to 1 February 2012 will have a 7 year limitation period apply for all structural and non-structural defects.

2. Notification to the Strata Manager and Liaising with the Strata Manager If you are a lot owner and you notice defects in your property you should notify your strata manager as soon as possible. Ideally you should send an email or issue a letter setting out the extent of the defects and any photographs you may have.

Strata & Community Title News continued……..

3. Notification to the Builder/Developer and Providing the Builder/Developer the Opportunity to Inspect the

Defects and Carry Out Rectification If the defects affect the common property and you are within the statutory time period you should leave this to your strata manager. Alternatively, you may notify the builder/developer of the defects if they apply to your lot property only. If at that time you have had a report commissioned by a building consultant (see below point 6) ideally this should be served on the builder/developer. The builder/developer should be given the opportunity to inspect the property and decide whether it wishes to rectify the defects. The amendments to the Act are due to commence on or before 1 December 2014 and will require owners to not unreasonably refuse access to a builder to rectify a building defect. This requirement will apply to all contracts entered into after the amendments are proclaimed. Rectification will be the preferred outcome in a building dispute claim and a Tribunal or Court will have a standing directive to make a rectification order over an order for compensation where reasonable.

4. Section 80D Resolution

If an Owners Corporation wishes to commence proceedings a section 80D resolution will need to be made. Section 80D of the NSW Strata Schemes Management Act 1996 provides that legal action is to be approved by a general meeting. Specifically the section provides:

(a) An owners corporation or executive committee of an owners corporation must not seek legal advice or the

provision of any other legal services, or initiate legal action, for which any payment may be required unless a resolution is passed at a general meeting of the owners corporation approving the seeking of the advice or services or the taking of that action.

Accordingly, a General Meeting should take place with the appropriate Motion being submitted for approval at the meeting. A Resolution will need to be made approving the seeking of the legal advice or legal services or the taking of that action. Without this Resolution an Owners Corporation cannot commence proceedings against the builder.

However, a section 80D resolution is qualified by Clause 15 of the Strata Schemes Management Regulation 2010 which provides as follows:

1. The seeking of legal advice, the provision of legal services or the taking of legal action is exempt from the

operation of section 80D of the Strata Schemes Management Act if the reasonably estimated cost of seeking the legal advice, having the legal services provided or taking the legal action would not exceed:

(a) an amount equal to the sum of $1,000 for each lot in the strata scheme concerned (excluding utility lots),

or

(b) $12,500, whichever is the lesser.

5. Retaining a Building Consultant and obtaining a Defect Report

Prior to commencing proceedings a building consultant should be retained for the purpose of commissioning a defect report. This report will set out the extent of the defects and determine the appropriate jurisdiction in which proceedings are to be commenced. A report should be commissioned by a building consultant with the relevant expertise having regard to the defects being claimed. The consultant may at some stage be required to give evidence in the Tribunal or Court and as such, the chosen consultant will need to have experience in Court appearances. If the claim is under $500,000.00 the claim will need to be filed in the NSW Civil and Administrative Tribunal, formerly known as the Consumer, Trader and Tenancy Tribunal. If the claim is above $500,000.00 and up to $750,000.00 the claim will need to be filed in the District Court of NSW. If the claim is above $750,000.00 the claim will need to be filed in the Supreme Court of NSW. Further, we recommend that instructions are provided to the building consultant are prepared by a solicitor as inadequate directions may affect the quality and admissibility of the Defect Report. Clear instructions are required as to the form and layout of the report

Strata & Community Title News continued……..

6. Commencing Proceedings

Legal representation should be sought to ensure the appropriate Court forms are prepared and filed and the appropriate Defendant(s) or Respondent(s) are identified and named in the Claim. These are technical documents which will set out your case.

7. Procedural Directions and Court Process

Once proceedings have been filed, the Tribunal or Court will list the matter for directions. At the first Directions Hearing a timetable for the filing and service of the builder/developer’s Defence will be made by the Tribunal Member or Judge. A timetable will also be set for the filing and service of the parties lay evidence and expert evidence. The Tribunal or Court will thereafter case manage the matter.

8. Advice

Quality legal and building advice is essential given the strict provisions of the Act and the numerous amendments to the Act. In obtaining legal advice at an early stage you are more likely to resolve the matter without the need of protracted litigation.

If you have any questions regarding this article, please contact: Ms Pierrette Khoury, Lawyer , (02) 8272 1999 pierrette@turnbullbowles.com.au www.turnbullbowles.com.au

Building & Construction Services

Our Lawyers can assist clients with the following:

Construction Contracts

• Negotiating and drafting commercial and residential construction, project management, subcontracts, engineering and other construction related agreements;

• Advice and Appeals pursuant to the Building and Construction Industry Security of Payment Act 1999; • Dispute resolution for issues arising during the course of construction projects.

Construction Disputes

• Advising and acting for Owners Corporations, home owners, builders, developers and other parties regarding building defects claims;

• Advising on proportionate liability issues; • Claims in negligence or for breach of contract against building professionals including Engineers, Architects,

Principal Certifying Authorities and Construction and Design Contractors in residential building matters; • Recommending, managing and instructing experts to assess and report on building defects.

Strata & Community Title Law Services

We offer fixed fess for many services including drafting and registration of standard By-Laws with a 48 hour turnaround. Our Lawyers can assist clients with the following:

• Advice and representation in strata disputes and processes; • Drafting and registration of By-Laws; • Notices to Comply and Penalty Applications regarding breaches of By-Laws; • Advice and assistance regarding the interpretation, application and amendment of Strata

Management Statements and Community Management Statements; • Attendance at Annual General Meetings, Extraordinary General Meetings and Executive

Committee Meetings to provide advice, guidance and assistance; • Strata Subdivisions; • Easements; • Recovery action for unpaid strata levies; • General advice on Strata & Community title issues and Company Title issues; • Conversion from Company Title to Strata Title; • Building litigation; • Home Owner Warranty Insurance claims

General Services

Turnbull Bowles Lawyers is a division of Forbes Dowling Lawyers Pty Ltd and a subsidiary of a major Australian Collections Firm, Australian Receivables Limited. Our clients enjoy the benefits of the much larger parent company’s operating platform which includes sound governance, robust operating systems, high levels of compliance, documented risk management procedures, superior security and quality management systems.

All these features combined provide clients with greater peace of mind and more compelling results. The group provides a highly personalised, client specific and responsive service from talented, caring and successful practitioners working with state of the art business systems and specialist knowledge in the areas of:

• Commercial Litigation; • Business, Corporate & Commercial Law; • Property & Conveyancing; • Debt Recovery (with experts in the area of Strata and Local Government Rates Recovery); • Insolvency and Corporate Restructuring; • Building & Construction Law.

With branches and affiliates throughout Australasia, Turnbull Bowles Lawyers provides clients with a commercial and pragmatic solution to any legal issue.