Can an owners corporation shut down the lifts to refurbish them? If so, does it have to pay compensation to owners and tenants who cannot access their apartments via the lifts during the refurbishment?
And does a lift refurbishment need to be authorised by special resolution?
Those are the questions, here are the answers.
Can lifts be shut down during a refurbishment?
Most lifts are situated on the common property of a strata building which an owners corporation is the legal owner of, and responsible for managing and controlling.
However, the owners corporation owns the common property as the agent of the owners (section 28 Strata Schemes Development Act 2015).
This means that the owners are the equitable co-owners of the common property and entitled to use it and permit their tenants to. This creates a tension between the rights of the owners corporation and the co-owners.
However the NSW Supreme Court ruled in a case that whilst an owners corporation is able to manage and control the use of the common property by owners and their tenants, an owners corporation cannot refuse owners and their tenants to access the common property
altogether.
This means that an owners corporation can restrict the use of common property by owners and their tenants, including during a lift refurbishment because it is only temporary. But the owners corporation cannot permanently prohibit an owner or tenant from using a particular part of the common property.
Does a lift refurbishment require a special resolution?
An owners corporation must maintain and keep the common property in good repair.
If a lift has aged and deteriorated beyond repair then the owners corporation is required by law to renew or replace it (section106 Strata Schemes Management Act 2015). Under these circumstances the lift refurbishment can be authorised by an ordinary resolution.
However if it is to add to or alter the common property for the purpose of enhancing or improving it, a special resolution is required at a general meeting (section 108 Strata Schemes Management Act 2015).
Are owners able to make compensation claims?
As mentioned, the strata legislation imposes a duty on an owners corporation to maintain and repair and, where necessary, renew or replace the common property.
If the owners corporation fails to maintain and repair, or renew and replace the common property where necessary, an owner can claim compensation from the owners corporation for any loss suffered by the owner as a result of the breach (section106(5) Strata Schemes Management Act 2015).
Conclusion
A lift refurbishment is a major capital works project that needs to be handled with care.
There are many thorny issues to navigate but if managed properly, it is possible to authorise the refurbishment by ordinary resolution and the scope for owners and tenants to make compensation claims should be limited.