The The Truth About Strata Are There Building Defects

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The Truth About Strata; what purchasers really need to know.

Part 3Are There Building Defects?

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All apartments leak?

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Why Apartments Leak?

Why Balconies Leak

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Defects Are Time Bombs For Inspectors and Managers

• At least 5 different time limits apply to commencing recovery action

• Failing to warn purchasers can amount to negligence

• Failing to warn purchasers of claims made can amount to negligence

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When Does The Clock Start?

• The earliest possible date is ‘completion’

• Completion can be – Practical completion of

building contract– Certificate of occupation

by local authority– Registration of strata plan

• All dates should be identified for advisors

• Be conservative

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There Are Five Races for Justice

Non-Structural Insurance

Structural Insurance Negligence Statutory

Warranties

Misleading and

Deceptive Conduct

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Non-Structural Home Warranty Insurance

• Two pre-conditions– Three stories or less (not

including car park)– Insolvency, death or

disappearance of builder

• Claim notified within six months of awareness, and

• Claim matter within two years from completion

• Be conservative about what is non-structural

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Structural Home Warranty Insurance

• Two pre-conditions– Three stories or less (not

including car park)– Insolvency, death or

disappearance of builder

• Claim notified within six months of awareness, and

• Claim made within six years from completion

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Negligence

Six year limit

From manifestation10 year sunset from

final occupation certificate

• Defendants– Builder– Designer– Developer– Principal certifying

authority– Strata manager– Building materials

supplier

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Statutory Warranties

• Defendants– Builder– Developer

• Applies to all buildings regardless of size

• Rights expire seven years after completion of the work

• Be conservative about ‘completion’

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Misleading & Deceptive Conduct Cases

Misleading and deceptive conduct

Includes builder, developer, sales agent,

strata manager

Six year time limit from offending

conduct

Federal and State Court jurisdiction

Best paper trail wins

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Different Races, Same Steps

Cracks and leaks

Correspondence about cracks and leaks

Engagement with the enemy

Proceedings stop the clock

Dispute resolved

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Inspector’s Duty of Care To carefully inspect and clearly

report on all records provided To identify obvious records omitted To report defects identified in

records and cases started

? To alert purchasers to strict time limits and need for legal advice

× To apply time limits

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Strata Manager’s Duty of Care

To provide all the records To identify records not

produced and why To alert OC to time limits

and need for legal advice

× To explain or interpret documents

× To advise on prospects

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Strata Inspectors Association

• Association incorporation

• Emailing list prepared

• Code of ethics agreed

• Website launched

• Free legal advice

• First AGM to be held today

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About the PresenterMichael 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 find out more about Michael at www.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, management rights, strata community disputes, by-laws and rules and levy and fee collection.

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