Who Pays When Strata Renovation Works Fail?

A recent NSW Civil and Administrative Tribunal (NCAT) decision is a useful reminder that lot owners who renovate common property under a special by-law may also take on the ongoing responsibility for maintaining and repairing that altered common property.

In Abbott & Volf v Elite Plumbing Force Pty Ltd & The Owners Corporation, Strata Plan 19688 [2026] NSWCATCD, NCAT dismissed claims brought by lot owners against both their plumbing contractor and the Owners Corporation after a leak occurred in a bathroom wall following renovation works.

The decision confirms three practical points:

• a properly drafted and registered special by-law can transfer maintenance and repair obligations to a lot owner;
• a failed component does not, by itself, prove breach of a statutory warranty; and
• claims for compensation, future liability or loss of amenity still need evidence.

What happened in the case

The Applicants owned a lot in the strata scheme. In September 2023, they carried out bathroom renovation works under a special by-law. The works included plumbing alterations within a common property wall, installation of a waterproofing membrane and tiling. Elite Plumbing Force Pty Ltd was engaged to carry out the plumbing works.

In July 2025, a leak was detected in the common wall of the Applicants' shower. Investigations attributed the leak to a failed tee fitting located within the common wall, which had been installed as part of the renovation works. Elite Plumbing attended the lot and replaced the defective fitting at no cost to the Applicants.

The Applicants then incurred $1,980 to reinstate the localised waterproofing and tiles removed to access the pipework. They commenced NCAT proceedings against the Owners Corporation and Elite Plumbing, seeking recovery of those costs, compensation for loss of amenity and declarations about responsibility for any future waterproofing issues.

What NCAT decided

Senior Member JA Rose dismissed the application against both respondents.

The claim against Elite Plumbing failed because the Applicants did not establish, through expert evidence, that the fitting was defective when supplied or unsuitable for its intended purpose. NCAT held that the mere failure of the fitting did not establish breach of the statutory warranty under section 18B(1)(b) of the Home Building Act 1989 (NSW), or any other statutory warranty.

The claim against the Owners Corporation also failed. The Applicants argued that the Owners Corporation was responsible under section 106 of the Strata Schemes Management Act 2015 (NSW). NCAT accepted that the special by-law transferred responsibility for ongoing maintenance and repair of the altered common property to the Applicants.

The special by-law made the “Authorised Owner” responsible for proper maintenance of the “Exclusive Use Area”, which included the parts of common property altered during the renovation works.

The claims for loss of amenity and future liability orders were also dismissed for lack of evidence.

Why this decision matters for owners corporations and insurers

This decision is a timely reminder that responsibility for common property is not always straightforward once a lot owner carries out renovation works under a special by-law.

Ordinarily, Owners Corporation have statutory duties to maintain and repair common property. However, where a special by-law authorises works and expressly transfers ongoing maintenance obligations to the lot owner, that by-law can be critical in determining who pays when something later goes wrong.

For insurers and Owners Corporations, the decision reinforces the value of clear renovation by-laws. If the by-law properly identifies the altered common property and clearly allocates maintenance and repair responsibility, the Owners Corporation may be able to resist reinstatement or repair claims arising from those works.

For lot owners, the decision is a warning. Approval to carry out works may come with long-term maintenance obligations. A renovation by-law should not be treated as a simple permission document. It may also allocate future risk.

What the decision says about expert evidence

The decision also highlights the importance of expert evidence in defect and statutory warranty claims.

NCAT was not prepared to infer breach simply because a fitting failed. The Applicants needed evidence that the fitting was defective when supplied, unsuitable for its intended purpose or otherwise caused a compensable failure. Without that evidence, the claim against the contractor could not succeed.

That point matters in strata and building defect disputes. A failure may identify a problem, but it does not automatically identify legal responsibility. Parties still need evidence addressing defect, causation, scope of loss and the relevant statutory or contractual obligation.

Key takeaways

The practical significance of the decision is that section 106 of the Strata Schemes Management Act is not, in every case, the end of the analysis.

Where a lot owner has carried out works to common property under a registered special by-law, the first question will usually be what the by-law authorised, what parts of the common property were altered, and whether the by-law shifted ongoing maintenance, repair, replacement or reinstatement obligations to the owner. If that allocation is clear, the Owners Corporation may have a substantial answer to a later repair claim, even where the failed element is physically located within common property.

For Owners Corporations and their insurers, the point is a practical one. Renovation by-laws should not be treated as administrative approvals. They should identify the authorised works, the affected common property, the area of exclusive use or special privilege, the owner’s continuing maintenance obligations, and responsibility for loss or damage caused by the works or the altered elements.

That drafting discipline is likely to matter at the claims stage, both in assessing indemnity and in working out whether the claim properly sits with the Owners Corporation, the lot owner, the contractor or another participant in the works.

The decision also reinforces a conventional, but important, evidentiary point in defect and statutory warranty claims. A failed component may explain why loss has occurred, but it does not, without more, prove that the component was defective when supplied, unsuitable for its intended purpose, or installed in breach of a statutory or contractual obligation.

Expert evidence directed to defect, causation, legal responsibility and recoverable loss remains critical. The same evidentiary discipline applies to claims for loss of amenity, declarations about future liability, or other relief directed to hypothetical future disputes: without a proper evidentiary foundation, those claims are unlikely to succeed.

For lot owners, the warning is equally direct. Approval to renovate common property may carry long-term legal and financial consequences. A special by-law should be read as a risk allocation document, not merely a permission document. Before carrying out works, owners should understand whether they are assuming responsibility for future maintenance, repair and reinstatement costs, including where the relevant pipework, waterproofing or other affected element is embedded in common property.