Transfer of Building & Strata Claims between NCAT and Courts
Clients will need to be extremely careful as to where a building and construction claim is commenced.
NCAT (or the Tribunal) has primary jurisdiction in relation to many homebuilding matters.
At times, a client may commence a homebuilding claim in a court and then be ‘pulled’ into NCAT at great cost and expense.
We have had cases where there were multiple proceedings on foot (one in NCAT for example and one in a court, e.g. the Supreme Court).
Careful thought needs to be given as to whether or not a matter needs to be transferred from a court to NCAT or in more limited cases, vice versa. Sometimes respective questions in relation to one matter can stay in two jurisdictions if the court and NCAT have different jurisdictions. A transfer application can also be made when either a court or NCAT has the full jurisdiction to hear all matter related questions.
This is where things can at times end in disaster.
For example, when commencing proceedings, litigants need to be very careful to ensure that there are no claims commenced (by them or the other side) in another jurisdiction and, in the least, that different questions are before those forums with each having a separate and distinct jurisdiction to hear the separate questions before them.
In one case, The Owners – Strata Plan No 47035 v Athens [2025] NSWSC 1588, the parties had previously transferred the matter into the Supreme Court (from the Local Court), and had spent about five years there (since 2020). During the final hearing however, Justice Elkaim noted that the Supreme Court may not have had the requisite jurisdiction, because a similar case, on similar issues, was commenced in NCAT before the Supreme Court matter commenced. Justice Elkaim saw no other choice but to transfer the matter to NCAT.
It is in cases like this, that the enormous cost and time of the matter, costs which have been already spent in one jurisdiction, may all essentially be for nothing.
At Papallo Kouchoo Lawyers, we do our utmost to ensure that we do our detailed ‘due diligence’ before we commence proceedings, ensuring to uphold your rights to the maximum extent of the law.
If you have any questions, please do not hesitate to contact us for an obligation free professional consultation.
Lot Property vs Common Property in NSW Strata (and Why It Matters)
If you live in a strata scheme in New South Wales, one of the most important things to understand is what you own as a lot owner, and what belongs to the owners corporation. This is not just a technical issue. It determines who must pay for repairs, who must organise them, who can approve renovations, and what happens when something goes wrong such as leaks, cracked tiles, window damage or balcony defects.
The basic rule is straightforward: common property is the responsibility of the owners corporation, and lot property is the responsibility of the lot owner. The difficulty is that the line between the two is not always obvious. The strata plan is the starting point, but it does not show every detail. When boundaries are unclear, the answer can also depend on the strata legislation, relevant case law and any by-laws made by the scheme.
What is Common Property?
Common property is generally everything in the strata scheme that is not part of an individual lot. The NSW Strata Schemes Development Act defines common property as any part of the parcel not comprised in a lot, including common infrastructure that is not part of a lot.
In practical terms, common property usually includes the building’s structure and the parts that support or protect the scheme as a whole. That often means the external walls, roof, slabs, structural floors and ceilings, windows and balcony doors, and key services such as shared plumbing, electrical wiring, fire safety systems and waterproofing membranes. Even if some of these items are located inside your apartment, they may still be common property if they form part of the building’s structure or shared systems.
The owners corporation has the legal duty to maintain and repair common property, and it uses levies paid by owners to do this work.
What is Lot Property?
Lot property is the part of the building you own privately. Generally, it includes the internal space of your apartment or townhouse and the fixtures and finishes within it, unless the strata plan or by-laws say otherwise.
For most strata schemes registered after 1 July 1974, a practical guide used across NSW is that structures shown on the strata plan with a solid thick line are common property, while structures shown on a thin line are usually lot property. Internal walls that are not shown on the strata plan are usually lot property.
The Key Exceptions You Must Know
Not every scheme follows the same boundary rules. A major exception is that the general post-1974 position does not apply to strata plans registered before July 1974, where boundaries may be defined differently, sometimes using a “centre line” approach.
Also, notations on the strata plan can change the usual assumptions, and approved renovations or special by-laws can shift responsibility for particular items over time. NSW even provides a “common property memorandum” that schemes can adopt to help clarify responsibility, especially where disputes frequently arise.
Because of these variations, there is no single answer that fits every building. When in doubt, it is wise to seek expert advice based on your strata plan and your scheme’s history.
Why This Matters to You as a Lot Owner
This matters because it affects money, repairs, approvals and risk.
If something is common property, the owners corporation must arrange and pay for repairs. If something is lot property, the lot owner pays. Getting this wrong can mean unexpected bills or delays while responsibility is argued.
It also matters for renovations. Lot owners generally cannot change common property without proper owners corporation approval, and in many cases, a by-law is required where renovations affect waterproofing, structure, external appearance or shared services.
Finally, it matters for insurance and liability. Building insurance usually relates to the building and common property, while lot owners insure their contents and improvements. When boundaries are unclear, claims and repairs can be delayed.
A Simple Takeaway
In NSW strata, you usually own the internal finishes and fixtures within your lot. The owners corporation usually owns the structural parts of the building and the shared systems, even if they run through your unit. The strata plan is the starting point, but legislation, case law, notations and by-laws can change the result. If you are unsure, it is better to check early – because the financial and practical consequences of getting it wrong can be significant.
If you need assistance determining whether an item is lot property or common property, please feel free to contact us for a professional, obligation-free consultation.
Why the Strata Building Bond Matters for Owners Corporations
The Strata Building Bond and Inspections Scheme, commonly referred to as the SBBIS, was introduced by the NSW Government as part of a broader effort to improve confidence and accountability in the construction industry. For Owners Corporations of newly completed residential apartment buildings, this scheme provides an important layer of financial protection, but only if the process is properly understood and actively engaged with.
Under the SBBIS, developers of certain strata residential apartment buildings are required to lodge a building bond with the Secretary of the NSW Government before an occupation certificate is issued. The bond is currently calculated at two per cent of the total contract price for all contracts for the building work, noting that a planned increase to three per cent has been deferred until 1 July 2026. The bond applies not only to residential components but also to common property, car parks, and mixed-use areas such as retail or commercial spaces within the same building.
The purpose of the building bond is to ensure that funds are available to rectify defects in the building if the developer fails to do so. If no defects are identified through the inspection process, or if all identified defects are properly rectified, the bond is returned to the developer. Importantly, the bond is held by the NSW Government, not by the Owners Corporation, and it can only be accessed through the formal SBBIS process.
A central feature of the SBBIS is the requirement for independent inspections of the building. An independent and appropriately qualified building inspector is appointed to carry out an interim inspection between 15 and 18 months after the building is completed, followed by a final inspection between 21 and 24 months after completion. These inspections focus on defects affecting common property. The inspector produces reports identifying any defects and, at the final inspection, assessing whether those defects have been adequately rectified.
While the inspection process is regulated, the role of the Owners Corporation is critical. The effectiveness of the scheme depends heavily on whether defects are properly identified, documented, and addressed during the inspection period. If defects are missed, poorly described, or not challenged when necessary, the opportunity to rely on the building bond may be lost. For this reason, Owners Corporations should take an active role in the process, carefully review inspection reports, raise concerns about additional defects, and ensure that known issues are brought to the inspector’s attention.
If defects identified through the SBBIS process are not rectified by the developer, the bond may be used by the Secretary to fund rectification works. However, the bond is limited in value and may not be sufficient to address all defects. This makes early identification and strategic use of the SBBIS process particularly important. Owners Corporations that are passive or disengaged risk finding themselves responsible for rectification costs once the bond is released.
Given the technical and legal complexity of building defect issues, many Owners Corporations benefit from obtaining independent building and legal advice during the SBBIS process. Expert input can assist in identifying defects that may not be obvious, ensuring that inspection reports accurately reflect the condition of the building, and protecting the Owners Corporation’s position if disputes arise. Early advice is especially important, as missed deadlines or procedural missteps can significantly limit the ability to recover funds under the bond.
Ultimately, the Strata Building Bond and Inspections Scheme is a valuable consumer protection mechanism, but it is not automatic. Owners Corporations that understand the process, monitor key timeframes, and actively participate in inspections are far better placed to protect their building and their financial interests. Being informed and proactive from the outset can make the difference between recovering funds to address defects and being left to bear those costs long after the developer has exited the project.
If you’re concerned or have any questions about your defect claim or building bond matter, reach out to us for a free professional consultation.