What was Tenancy Tribunal case 9074904 about?

The tribunal order states: The Tribunal declares that the responsibility to repair and maintain the balcony

How much money was awarded in case 9074904?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9074904?

The primary dispute was Mould & damp. Related themes: Leaks, Unit Titles.

Where can I read the official tribunal order for case 9074904?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/13133258-UTA_Tribunal_Order.pdf.

What was Tenancy Tribunal case 9074904 about?

The tribunal order states: The Tribunal declares that the responsibility to repair and maintain the balcony

How much money was awarded in case 9074904?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9074904?

The primary dispute was Mould & damp. Related themes: Leaks, Unit Titles.

Where can I read the official tribunal order for case 9074904?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/13133258-UTA_Tribunal_Order.pdf.

Thorndon, Wellington Tenancy Tribunal Case 9074904 — Mould & damp

Order

OF THE TRIBUNAL

The Tribunal declares that the responsibility to repair and maintain the balcony to Unit P1 sits with the Body Corporate, as it falls within the Body Corporate’s obligation to repair and maintain building elements that relate to or serve more than one unit.

Reasons

The Tribunal must consider an application for a declaration as to liability for repair and maintenance for a leaking balcony, in these unit-titled premises.
The applicant in this case is the Body Corporate manager, who advises that they are seeking this declaration with the approval of the Body Corporate itself.

BACKGROUND

The premises in question is a sizeable apartment complex located on Hobson Street, Wellington, and known as ‘Hobson Court’. The unit plan shows that there are 10 levels. Each level has a number of separate units.
The top-floor penthouse units have an exterior balcony, which I understand is for the use of that unit only. A part of that balcony sits over the interior of the unit below it; to put that another way, a part of the balcony forms the roof of the downstairs unit.
It is clear that there has been uncertainty as to responsibility for maintaining the balcony over the years. But now the balcony on unit P1 is leaking, causing water ingress into its downstairs neighbour, so the question of responsibility needs to be determined. The purpose of this application, is so that the Tribunal can confirm which party is responsible for the remediation work. Is it the owners of the penthouse unit, or the Body Corporate?
The application before the Tribunal has been filed by the Body Corporate Manager, Complete Body Corp Solutions Limited.
The respondent is Te Puhi Trustee (2) Limited (recorded as owner of the relevant unit on the title). The title shows that the respondent owns unit 80, which is referred to as Penthouse 1, and Mr and Mrs Bigg’s appeared for the respondent, supported by their unit managers.

BODY CORPORATE MANAGERS CASE

The issue for the Body Corporate is that the four top levels have their own balconies, which are around 2.5 metres square. There is a water ingress issue with one of the balconies, and it is not clear who is responsible for that.
The current design of the balcony on unit P1, is that there are tiles on the balcony floor, and it is assumed some waterproofing under that. But the issue is that the fall is not sufficient to get water to the drain, and it seems water is leaking through the tiles and potentially through a degraded membrane, but the Manager fairly notes that until the tiles are lifted, the Body Corporate cannot be certain about that, or what is actually causing the leak.
The balcony of P1 serves as the roof of the unit below it, and it appears that water is seeping through the concrete slab. The moisture is causing the gib inside the lower unit to sag, so the plaster board needs to be replaced.
In terms of who is liable for the repairs and maintenance, the Body Corporate does not take any position on who should be liable, but seeks direction from the Tribunal to answer that question.

UNIT OWNERS CASE

The Unit Owners confirm that the summary provided by the Body Corporate is accurate, but note that they have offered to pay for the remediation of the ceiling in the downstairs unit.
The Unit Owners also note that temporary sealing has been completed on the tiles, pending the determination of who is liable.
The Unit Owners’ position is that the Body Corporate is liable for the remediation work.
The Unit Owners advised that they obtained legal advice, and the result of that is that the Body Corporate is liable for this work, as it relates to and serves more than one unit, and is work to building elements. In this case, the building elements are in effect the roof of one of the downstairs neighbours.

ANALYSIS

Again, the question to be determined relates to who is liable to undertake the work on the P1 balcony: is it the Unit Owner, or is it the Body Corporate?
The starting point for determining the respective obligations of a unit owner and body corporate is the Unit Titles Act 2010 (UTA), which sets out the respective obligations between the parties for unit-titled premises like this.
Section 84 of the UTA sets out the “Powers and duties of Body Corporate[s]” which refers to specific sections in the Act, including section 138. Section 138 relates to the body corporate’s duties for repair and maintenance, and confirms that: The Body Corporate must repair and maintain— (a) the common property; and (b) any assets designed for use in connection with the common property; and (c) any other assets owned by the Body Corporate; and (d) any building elements and infrastructure that relate to or serve more than 1 unit. [Adjudicators emphasis]
The terms ‘building elements’ is defined in the interpretation section (section 5) as follows: building elements includes the external and internal components of any part of a building or land on a unit plan that are necessary to the structural integrity of the building, the exterior aesthetics of the building, or the health and safety of persons who occupy or use the building and including, without limitation, the roof, balconies, decks, cladding systems, foundations systems (including all horizontal slab structures between adjoining units or underneath the lowest level of the building), retaining walls, and any other walls or other features for the support of the building
Accordingly then, section 138 would apply to confirm that the responsibility for maintaining any building element would fall to the Body Corporate, providing that the building element “relate[s] to or serve[s] more than 1 unit”.
To put this another way, if the building element relates to or serves more than 1 unit, then the Body Corporate will be responsible for its maintenance, otherwise the responsibility for any maintenance will fall to the individual unit owner. Determining whether a building element relates to or serves more than one unit, will always be a question of fact.
The issue in this case is one of weathertightness. For the reasons as I will now discuss, the courts have confirmed in a number of decisions that it is the body corporate that will be responsible for undertaking repairs and maintenance that are needed to ensure the building is weathertight, when the weathertightness work is on elements of the building that relate to or serve more than one unit. Approach of the Courts
The courts have considered a number appeals over the years, where they needed to consider the extent of body corporate obligations around maintenance or remediation of building elements.
In the High Court judgment of Wheeldon v Body Corporate 342525 [2015] NZHC 884 1 , the High Court discussed what is meant by building elements relating to or serving more than one unit, concluding that will apply if there is some attachment of the building element, and when there is some relevance to the building element either physically or economically to the other unit(s), with an emphasis on integrity to the whole complex: [84] I accept that, typically, it may be more natural to talk of building elements within private property “relating to” other units or common property than of them “serving” such property and that the word “serve” typically is more naturally associated with infrastructure in the nature of pipes, wires, ducts etc. However, there may be building elements best described as serving more than one unit and infrastructure best described as relating to more than one unit and I would not preclude such a construction. [85] Having regard to the purposes in s 3, I accept Mr Allan’s submission that Harrison J’s approach means that s 138(1)(d) will be satisfied if the relevant building element or infrastructure: (a) naturally attaches to another unit (as in physically adjoining units); or (b) is causally relevant to another unit whether physically or economically (as in non-adjoining units) ; or (c) is referable to another unit whether physically or economically (as in both adjoining and non-adjoining units); or (d) is concerned with another unit whether physically or economically. [86] I would add to this that the inclusion of aesthetics in the definition of “building elements” and the emphasis on “integrity of the development” in s 3 means, in my view, that the economic relationship to which Mr Allan refers should include those factors, which inevitably reflect in value. [87] As indicated, the present case engages both issues of building elements and infrastructure.
In the High Court decision of Body Corporate 198245 v Wong [2012] NZHC, the Court needed to consider a case where there were water leaks affecting both common property and individual units. The High Court confirmed that for the purpose of funding repairs and maintenance, that because weathertightness issues are interrelated for the entire building, it fell to be a body corporate obligation. In that regard, Justice Ellis confirmed at paragraph 70 that: 1 The High Court decision confirmed in the Court of Appeal judgment of Wheeldon v Body Corporate 342525 [2018] NZCA 20. (a) the weathertightness of the entire building is interlinked and indivisible; (b) the proprietors all have a mutual interest in ensuring that the building as a whole is weathertight and kept in good repair. In the absence of expert evidence on the point,14 it can reasonably be assumed that if part of the building is not weathertight then that would adversely affect the saleability and value of all units, regardless of whether they themselves are in fact leaky; (c) each of the owners bought into the building as a whole, not just their individual unit; (d) each owner must be taken to have bought into the building knowing, and on the basis, of the division between common and private property in the unit plan and knowing of their responsibility to contribute to the maintenance and repair of the common property as so defined; (e) the sharing of common property repair costs on a unit entitlement basis necessarily contemplates that there may be an element of disproportionality and that prospect must also be taken to have been accepted when each owner bought into the Ridge.
The same approach was followed in High Court decision of Body Corporate s73368 v Otway & Ors [2017] NZHC 2017] NCHC 3265. There are considerable similarities between that case, and the matter before me with Hobson Court. In Otway, the premises were a large complex. On the ground level were various retail shops, and above that were apartments. However, the footprint of the apartments was less than the shops, and there was a concrete balcony area for the lower floor apartments, which also served as the roof for the shops below. The concrete balcony leaked. The issue that the High Court needed to consider, was who would be responsible for the repairs. The primary issue in that case is whether the cost of the repairs should be the responsibility of the apartment owners. The Court stated: [30] With the exception of the joinery work undertaken to the first- floor apartments, I am of the view that the body corporate has not shown that the repair works benefited the first-floor apartment owners more than it benefited other units by a distinct and ascertainable amount. My reasons are as follows: (a) The weathertightness of the entire building is interlinked and indivisible.2 The membrane on the first floor apartment decks is an important part of the storm water system for the entire building. Rain water which falls on the curtain walls, buttresses and windows of the tower block is directed onto and across the first-floor decks. That is not the case for the much smaller balconies attached to the upper- level apartments, which only collect the rain water which falls directly onto them. (b) Although the first-floor apartment owners own the membrane as the boundary between unit floors is the top of the concrete floor slab, they do not own any of the concrete floor slab itself. The concrete floor slabs are owned by the ground-floor commercial unit owners or the body corporate as common property. A substantial portion of the concrete floor slab is in fact common property. (c) The allocation of the repair costs has, with the exception of the joinery, been somewhat arbitrary. For example, of the contracted cost of $30,554 for demolition, the body corporate has allocated $5,000 to itself and the remainder to the first-floor apartments in proportion to their deck areas. It does not appear to have allocated any of the cost of demolition to the ground-floor commercial units. While the amount claimed is therefore quite clear, the repair contract did not differentiate See also Body Corporate 198245 v Wong [2012] NZHC 2676, (2012) 14 NZCPR at [70].on the basis of either ownership or benefit. A global figure was priced and paid. (d) Each of the unit owners bought into the building as a whole, not just their individual units. They knew of the division between their private property and common property and knew of their responsibility to contribute to the repair and maintenance of the common property. (e) The sharing of common property repair costs on a unit entitlement basis necessarily contemplates that there may be an element of disproportionality. (f) If part of a building is not weathertight then that adversely affects the saleability and value of all units, regardless of whether they themselves are in fact leaky. (g) The first-floor apartment owners will pay proportionally more than almost all other unit owners based on their unit entitlements, which do take into account the floor area of their extensive decks.
The end result was that the respective lower level apartment owners needed pay for the joinery that was replaced on their units, but the body corporate needed to pay for the other and significantly more costly work on the balcony.
That decision from the High Court was appealed by the Body Corporate, to the Court of Appeal (Body Corporate S73368 v Rosalind Kay Otway [2018] NZCA 6120).
By way of background, the Court of Appeal noted that: The first floor has large decks which sit above ground-floor shops and the public footpath. The decks are formed by a concrete slab sitting on structural steel beams. Previously, the concrete slab was covered by a butyl rubber membrane with ceramic tiles laid on top. These decks had been leaking since at least 2009, due in large measure to the premature failure of the waterproof membrane.
The Court noted that it was agreed by the parties that the balcony served more than one unit, and fell within the category of being a building element. Section 138(1) of the UTA 2010 obliges the Body Corporate to repair and maintain “the common property”, and also “any building elements and infrastructure that relate to or serve more than 1 unit”. The deck areas in question here meet the definition of a “building element” and it is common ground that the deck areas serve more than one unit. Therefore, it is clear that, absent some obligation on unit owners to do so, the Body Corporate in this case was under an obligation to repair and maintain the decks as “building elements”.
Returning the considerations at Hobson Court. The evidence is that there is a weathertightness issue in that the balcony in Penthouse 1, it is leaking, and that is effecting the unit downstairs. The balcony is a building element, which relates to and serves more than one unit, and therefore the responsibility to repair and maintain the balcony sits with the Body Corporate. For the avoidance of doubt, that means it is the Body Corporate that must fund, and undertake any necessary works. Recovery of costs
It is necessary for me to observe, that considerations around liability are a two set process.
Firstly, when work is needed to a building element that relates to or serves more than one unit, then it is the body corporate that must fund and undertake that work. The declaration I have made above addresses this first step.
However, when the work has been completed, then there are provisions in the UTA where the body corporate can recover the cost of doing that work from particular unit owners. In order to go down the cost recovery path, that would first require a decision to be made by the body corporate taking into consideration the relevant provisions of the UTA. In large measure, this is what the High Court and Court of Appeal in the Otway decisions addressed. My declaration has not addressed this question. It would be entirely premature for me to comment on cost recovery, because it would first be for the Body Corporate to decide if cost recovery was to be applied. If the parties wish to know more about the relevant considerations with cost recovery in a leaking unit tiled property, then the Otway decision may be a good place to start.

Tenancy Tribunal case 9074904 — Mould & damp in Thorndon, Wellington

At a glance

Tenancy Tribunal case 9074904 — Mould & damp in Thorndon, Wellington

At a glance

Claims & awards

Order

OF THE TRIBUNAL

Reasons

BACKGROUND

BODY CORPORATE MANAGERS CASE

UNIT OWNERS CASE

ANALYSIS

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions

Claims & awards

Order

OF THE TRIBUNAL

Reasons

BACKGROUND

BODY CORPORATE MANAGERS CASE

UNIT OWNERS CASE

ANALYSIS

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions