What was the outcome of Tenancy Tribunal case 9047064?

The tribunal order states: The Tribunal declares that the Body Corporate cannot require the applicant to

How much money was awarded in case 9047064?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9047064?

The primary dispute was Property damage. Related themes: Unit Titles.

Where can I read the official tribunal order for case 9047064?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10004408-UTA_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 9047064?

The tribunal order states: The Tribunal declares that the Body Corporate cannot require the applicant to

How much money was awarded in case 9047064?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9047064?

The primary dispute was Property damage. Related themes: Unit Titles.

Where can I read the official tribunal order for case 9047064?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10004408-UTA_Tribunal_Order.pdf.

Sunnynook, Auckland Tenancy Tribunal Case 9047064 — Property damage

Order

The Tribunal declares that the Body Corporate cannot require the applicant to make a further contribution to the cost of the remediation works at the complex, on account of work undertaken on the Unit 4 balcony.
The applicant's other applications are dismissed.

Reasons

Both parties attended the hearing.
With the prior approval of the Tribunal, the Body Corporate was represented by Lane Neave (Mr Stephenson).
The applicant represented herself.
I also heard from the owners of units 1, 2 and 3, who had submitted a joint statement which they each spoke to. The parties
The application names the respondents as Body Corporate 200426 and Mr Adam Tindall.
The respondent is properly the Body Corporate, not Mr Tindall personally. Background
The applicant is the owner of Unit 4 in a town house development at 7 Belle Verde Drive ("the Property")
The Property comprises 4 units in a single structure. Units 1 and 4 are each end units with an exterior end wall. Units 2 and 3 have no end walls.
The title plan shows that the respective utility interests for the units are: Unit 1 - 25.91% Unit 2 - 24.29% Unit 3 - 24.29% Unit 4 - 25.51% (the title plan records the Units as A-D but I understand they are known as Units 1-4 so I have used that description).
The unit owners discovered that the previous owners had undertaken unconsented work on the Property, with the result that the Property did not have a Code Compliance Certificate. To achieve compliance, the Properly needed to be reclad.
The initial advice received by the applicant, as recorded in a letter to her from HOBANZ Project Assist Limited, was that the remediation costs should be shared by the unit owners in accordance with their respective utility interest in accordance with s.121 Unit Titles Act 2010 ("UTA"). That correspondence, in considering the application of s.126 UTA (work substantially for the benefit of one or some units only), expressed the view that apportionment in line with utility interests would be appropriate as, "....it would be difficult to argue that one or more of the units benefit substantially more than the others, when the objective of the remedial project is to reinstate all units to a compliant standard and restore their value. The fact that the physical work on one unit may cost more than for another unit is usually of little consequence in these situations."
The owners of Units 1, 2 and 3 were not persuaded that was the appropriate approach and all unit owners agreed that it would be helpful to have an independent body corporate manager appointed to manage the remediation project and manage the body corporate. Crockers was engaged.
Crockers' advice was that an independent lawyer should be appointed to provide an opinion as to the appropriate apportionment of the remediation costs. The minutes of a meeting of the unit owners held on 4 March 2021 records a unanimous resolution, "To authorise the Body Corporate to engage a legal counsel to prepare a Building Works Agreement (BWA) to be approved by all the owners, the purpose of which is the effective and efficient regulation and cost apportionment prior to the commencement of the remedial works to be carried out in the complex." Mr Stephenson (Lane Neave) was appointed.
Mr Stephenson prepared a draft Building Works Agreement under which the recommended apportionment of the remediation costs was: Unit 1 - 27.1% Unit 2 - 20.3% Unit 3 - 20.3% Unit 4 - 32.3%.
I am told that those percentages were calculated to represent the respective areas of the building envelope that required recladding, attributable to each of the units. The proportions payable by end Units 1 and 4 were therefore higher as they also had end walls that required recladding.
Following further negotiations between the parties, a Building Works Agreement was signed in early May 2021 ("the BWA"). Under that signed BWA the agreed contributions are: Unit 1 - 27.5% Unit 2 - 21.5% Unit 3 - 21.5% Unit 4 - 29.5%
The scope of the "renewal project" is defined in the BWA, as: "All preparatory work, design work, engineering work and building work (whether or not the works or services relate to Common Property, Unit Property, Building Elements or other property within the Building) reasonably necessary to: a.replace the existing exterior cladding to the building; b.replace the existing exterior joinery and glazing to the building; c.ensure that the Building meets Required Building Standards at the completion of the replacement of the cladding, joinery and glazing; and d.ensure that the Building receives a certificate of code compliance."
As the remediation work got underway it became apparent that to achieve a certificate of code compliance, clearance between the cladding and the driveway needed to be created. I am told that obtaining the required clearance required raising the level of the building or lowering the driveway. While it involved a considerable amount of excavation and engineering work, lowering the driveway was considered by far the better and cheaper option. Ultimately, the driveway work was undertaken under a separate works contract.
As a variation to the remediation scope, the applicant wanted to drop the windows in the end wall of her unit rather than having them replaced like for like following the recladding. It is accepted that as a variation for her sole benefit, she should meet any additional costs resulting from that variation.
The Post Tender Communication from the contractor records that "I can confirm that the timber decks to the Northeastern side are free standing structures that will require boards to be removed for scaffolding placement and cladding replacement. Allowance to reinstate only, existing boards is acceptable........we have allowed to reinstate all existing decks."
The decks of Units 2 and 3 were already floating decks. Decks/ balconies on Units 1 and 4 were not, and needed to be reconfigured to be "floating" to achieve compliance. The Body Corporate seeks to recover from the applicant the costs associated with that work on Unit 4. The Applicant's Claims a. Driveway function
The applicant claims that the driveway works have been poorly designed and executed with the result that water flowing down the driveway now pools in front of her unit creating unsightliness and the risk of slipping and flooding. She seeks an Order that the Body Corporate supports her in challenging the contractor to require that further remediation work be undertaken to address those issues. She says that, "...all that is required is for the current drain to be extended over the top of the slope (half a metre) with a grate over it for driving over it and a slit drain added to the edge of the entryway to unit 4 (which is easy as it is directly above the stormwater network)." b.Driveway costs
The applicant says that while there may be a basis for Units 1 and 4 to pay a higher proportion of the recladding work because they have a greater external clad area, that does not apply to the driveway works. So, Unit 4 should not be required to pay a higher portion of that cost, particularly given that the driveway works were undertaken under a separate works contract. c.Window variation
The applicant's position is that she should not be required to pay anything extra for the variation involved in having the windows of Unit 4 dropped. She says that any additional cost is more than made up by her having paid a higher proportion of the driveway costs with no corresponding benefit. She also says that the spreadsheet detailing the scope of works, omitted the window drop. She submits that shows no additional cost for the window drop was included in the scope of works, so there is no additional cost for her to reimburse. d.Balcony Work
The applicant says that the work required on the balconies of Units 2 and 3 was included in the scope of works, whereas the work on the balconies of Units 1 and 4 were not. She says she should not have to meet that cost herself when the cost of the balcony work for Units 2 and 3 was shared under the remediation project. Respondent's position
The respondent disputes the tenant's factual claims. It submits that she is bound by the terms of the BWA and that fundamentally, "......there is no lawful basis for the applicant to seek to have the Tribunal substitute the applicant's views on decisions made for the project by decisions of the body corporate. In simple terms the Tribunal does not have jurisdiction to overrule the democratic decision making of the members of the body corporate.” Jurisdiction and applicable principles
S.171(1) UTA provides the Tribunal with jurisdiction to hear and determine all disputes arising between persons of the kind listed in subsection (2) in relation to a unit title development, which this is. Those persons include, ss.(2)(a) ... the owner of a principal unit, ss.(2)(d) a body corporate, ss.(2)(da) a body corporate manager. The present dispute is between such parties and the Tribunal has jurisdiction to hear and determine this dispute.
It is clear from the scheme of the UTA and from decisions of the higher Courts, that if decisions of a Body Corporate are properly and lawfully made, the Tribunal's jurisdiction should not be exercised to as to "second guess" those decisions or substitute them with decisions that might be preferred by individual unit owners or that the Tribunal might consider more appropriate.
The Tribunal's focus must therefore be on the processes by which decisions of the Body Corporate have been arrived at, not on a critique of the merits of those decisions. If the decisions are lawfully made, then the Unit Owners will be bound by them.
Section 210 UTA and the following provisions of Subpart 3, provide scope for a unit owner, voting against a resolution, to seek relief on the grounds that the effect of the resolution would be unjust or inequitable for the minority. There is no evidence of those processes having been initiated by the applicant.
The work required to have the Property achieve code compliance is the responsibility of the Body Corporate (s.138 UTA).
The Body Corporate must then raise levies to cover the cost of that work and is entitled to recover those levies from the unit owners.
Section 121 prescribes that in raising those levies, the unit owners’ contributions are to be proportionate to their respective utility interests.
There is however scope under s.126, where the work, “...benefits 1 or more of the units substantially more than it benefits the others or other of them...” for contributions to be levied, (subs (3)), “......having regard to the relative benefits to those units.”
The BWA is signed by all unit Owners. Under the BWA the Body Corporate is, ".....authorised on behalf of the owners to investigate, plan, direct and complete the Renewal Project to the Building, through the Owner's committee by simply majority...."
The BWA contains recitals that: “B. The renewal project includes betterment, and a greater amount of work to the two end units: and D. The owners wish to agree how respective apportionment of costs are to be assessed and raised, starting from the date of entry into this agreement.”
Had an application been made under s.126(3), for apportionment of the cost of the works between the Unit owners to be determined, it is likely I would have assessed the position in much like same way as recorded in HOBANZ’ advice to the applicant ie. that the whole of the remediation work was required to achieve the building compliance needed by all unit owners and it is difficult to identify a particular benefit deriving to Units 1 and 4.
However, after advice, the unit owners have unanimously agreed otherwise in the BWA. They are entitled to rely on that agreement and the Body Corporate is entitled to proceed accordingly. Determination of Claims Driveway function
The applicant's first claim is that the Body Corporate should be required to engage with the driveway contractor to require further remediation work to be carried out or itself undertake further remediation work at its' cost to mitigate the adverse effects the applicant says have been caused for her unit.
I make no findings as to whether, as the applicant claims, her unit has been uniquely disadvantaged by the work or whether, as the other unit owners claim, the effects are largely the same for all of them.
In terms of the BWA, the purpose of the project, ie. issue of a code compliance certificate for the building, has been achieved. I do not consider that there is a basis on which the Tribunal can or should direct that the Body Corporate undertake further work or manage its relationship with the contractor differently than it has decided to do under its authority from the unit owners. Ultimately the contract for the building works is between the Body Corporate and the contractor. If the Body Corporate determines that the work was not of an acceptable standard, then that is for the Body Corporate to pursue – not an individual unit owner. If the applicant is wanting to pursue this matter further, she is able to do so via the usual Body Corporate governance processes with any decision on whether to pursue the contractor determined by majority vote of the unit owners. Otherwise, this claim must be dismissed. Driveway cost
I have some sympathy with the applicant's position that there is no principled basis for applying the disproportionate sharing of remediation costs to the driveway works. That disproportionate contribution was derived from the higher proportions of the exterior cladding attributable to the end Units 1 and
It is hard to see why that should apply to sharing of driveway related costs.
That said, the scope of the renewal project as defined in the BWA, the costs of which were to be apportioned as specified in that agreement, includes, "All....engineering work and building work.... reasonably necessary to......ensure that the Building receives a certificate of code compliance." The driveway work falls within the project scope, so defined.
The other unit owners' evidence is that measures other than lowering the driveway (lifting the building) could have been taken, which would have been squarely within the initially projected scope, but which would have been much more expensive. They say that therefore it is misleading to focus on the driveway works as effectively a separate project.
I find that despite my misgivings as to its fairness, the decision to apply the cost sharing formula set out in the BWA to the cost of the driveway works, which were necessary to achieve code compliance, was a lawfully made decision of the Body Corporate, which the Tribunal should not interfere with. Variation to drop windows
The parties are agreed that if additional costs were incurred by this variation for the sole benefit of Unit 4, the applicant should meet those costs.
The evidence given by the other unit owners suggests that the error in deleting this variation from the scope of works, was rectified. Whether or not that is the case, the work to drop the windows was completed and paid for by the Body Corporate as part of the total project cost, but has solely benefitted Unit 4.
The sums claimed from the applicant are set out in detail in a resolution dated 3 October 2023, passed by the 3 unit owners attending (not the applicant). The minute records that as a measure of goodwill, no recovery of labour costs attributable to the variation is sought. The is no evidential basis for me to question the methodology used.
The Body Corporate is entitled to seek recovery of the sum authorised by that resolution (s.126 UTA) Balconies
The Body Corporate says the applicant is bound by the terms of the BWA so must contribute disproportionately to the cost of the driveway works which were not contemplated or specified in the BWA but which were necessary to achieve code compliance.
The same analysis applies to the cost of remediation works to create floating balconies for units 1 and 4, being part of, "All....engineering work and building work.... reasonably necessary to......ensure that the Building receives a certificate of code compliance."
The Body Corporate is bound by the terms of the BWA and without agreement to the contrary, must apply the specified apportionment of costs to all work within the defined project scope - as it has to the driveway works.
It is accordingly acting outside its lawful authority in seeking to apply a different recovery approach to this part of the required works. Costs
The applicant is not represented.
The legal costs incurred by the Body Corporate in connection with this application are not recoverable under s.124 or 127 UTA, as costs incurred in collecting a levy or remedying a breach.
The costs associated with this application fall to be considered under s.102 Residential Tenancies Act 1986. As the respondent is legally represented, the Tribunal may order a party to pay the other party the reasonable costs of that other party in connection with the proceedings.
As the applicant has been partly successful with her claim, the Tribunal may order that the respondent pay to the applicant the $500.00 filing fee.
If the parties wish to make submissions on costs, they may file memoranda by e-mail to the Tribunal by 5:00pm on Wednesday 6 April 2024.

Tenancy Tribunal case 9047064 — Property damage in Sunnynook, Auckland

At a glance

Tenancy Tribunal case 9047064 — Property damage in Sunnynook, Auckland

At a glance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions