Body Corporate – Liability for Injury from Defective Common Property

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Case note: Wu v Carter (2009) NSWSC 335

This recent Supreme Court case serves as a strong warning to bodies corporate of their duty to inspection and maintain and letting agents of the need for careful condition report preparation.

Facts

The plaintiff was a tenant of a unit within a body corporate scheme. She suffered injury due to a defective railing on the second floor balcony of her building. She sued the landlord, their leasing agent and the body corporate.

The parties reached settlement of her claim for $775,000.00 in damages.

The body corporate then sued the landlord’s leasing agent. They argued that when the property manager gave possession of the unit to the tenant, it prepared the entry condition report without picking up that the railing was in a defective state.  Had that been picked up and brought to the body corporate’s attention, they could have fixed the railing and the injury could have been avoided.

Findings of the Court

The Court apportioned liability 75% to the body corporate and 25% to the landlord’s agent, because:

  • Section 62 of the New South Wales Strata Schemes Management Act 1996 (the equivalent of Section 152 of the Body Corporate and Community Management Act 1997 (Qld) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Qld)) provided that “the railing formed part of the common property, which the body corporate had a continuing duty to maintain and keep in a state of good and serviceable repair” and hence, the primary duty rested with the body corporate;
  • the leasing agent prepared the entry condition report, it therefore owed a duty of care to warn the tenant and/or the landlord of any dangerous defects in the premises.

On balance, the court found that the railing was defective when the agent prepared the entry condition report. If they had reported that to the landlord, the landlord could have in turn informed the body corporate, who could have repaired the railing in time to avoid the injury to the tenant.

Summary

Here are some clear messages from this decision:

  • the body corporate’s culpability in failing to repair common property was much higher than that of the landlord’s leasing agent, who failed to adequately inspect the premises;
  • the body corporate, through its caretaker or manager, must ensure regular and appropriate inspections of the state of common property are carried out, and any defects should be repaired as a matter of priority;
  • property letting / leasing agents must take extra care when compiling tenancy entry condition reports and ensure that any defect which may result in foreseeable injury should be immediately brought to the attention of the property owner or the body corporate manager.

To assist you with legal issues concerning body corporate, community management schemes, leasing or property in general, please contact a member of our property team.