Clarification from the Appeal Panel on loss of rent claims in strata schemes

A decision handed down by the Appeal Panel recently finally puts to rest the ongoing uncertainty regarding NCAT’s jurisdiction to make orders compensating lot owners for loss arising due to an owners corporation failure to maintain or repair the common property.

The recent decision overturns two previous decisions of the Appeal Panel and confirms that the Tribunal does not have power to award compensation to a lot owner pursuant to section 106(5) of the Strata Schemes Management Act 2015 and that accordingly such claims need to be brought within a court, such as the Local, District or Supreme Court.


The decision is good news for both lot owners and owners corporations as it settles an issue which could lead to devastating effects for either of the parties through no fault of their own but due to the different interpretations of the legislation.


However, there are some additional complexities which arise from the decision which, until such time as there have been a few test cases, will require lot owners to consider carefully how they frame their claims so as to navigate the complicated way the legislation allocates powers between NCAT and the Courts.


The main issue for lot owners is how to address different types of orders being required in relation to the same issue. For example, where an order is sought requiring an owners corporation undertake building work to resolve the issue such an order would generally be made by NCAT however an order claiming loss of rent due to the same issue would need to be made through the courts. Maintaining two legal proceedings in separate jurisdictions on the same subject matter gives rise to complications which may add to the legal costs and introduces the risk that one of the proceedings will be ruled as being invalid.


There is a two year limitation period to claim loss of rent (a lot owner may not bring an action more than 2 years after they first became aware of the loss) and the options available to a lot owner are better the earlier they obtain legal advice within the 2 year period.

Williamson Lawyers has experience in this area of the is able to assist both lot owners and owners corporations in resolving disputes arising defects or disrepair in the common property.


The information provided in this article is general information only and should not be relied upon as legal advice or be used as a substitute for obtaining legal advice. The specific circumstances relating to you impact upon your legal rights and obligations and personal legal advice based upon your circumstances should be obtained. This area of law changes frequently and the law may have changed after the time this article was prepared, up-to-date legal advice should be obtained. Please do not hesitate to contact Williamson Lawyers if we may be of assistance.