In addition to acting for bodies corporate and unit owners in relation to building defect claims, we:
Our expertise in dispute resolution enables our body corporate clients to resolve legal issues in a timely and cost effective manner.
We understand the importance of budgeting to our body corporate clients so we provide realistic cost estimates which enable them to plan ahead.
What is a section 74 repair scheme?
It is a scheme approved by the High Court under section 74 of the Unit Titles Act 2010 for the repair of a unit title development which has been damaged. The scheme sets out the rules for the repair of the building and how that repair process is to be managed and funded.
Why have a repair scheme?
A repair scheme authorises the body corporate to repair both unit and common property. In many cases repairs to unit property will not be authorised without a scheme and there is a risk individual owners may hold up the repair process.
The scheme sets out the basis upon which owners will be levied for the cost of the repairs, reducing arguments about levies and enabling any debt collection process against defaulting owners to proceed smoothly.The scheme provides certainty to the owners, building contractors and lenders alike that the repairs will proceed in an co-ordinated, timely and organised fashion.
Who can apply for a scheme?
The body corporate, a unit owner, the insurer or any person holding an interest in the development (eg. a mortgagee) may apply for a scheme.
How do you obtain a scheme?
Your lawyer will make an application to the High Court with affidavits in support. The Court will provide directions as to service and all affected parties are then served with the application documents. The parties who are served have an opportunity to appear and be heard on the application. The Court will allocate a hearing date, hear submissions and then make a decision on the application. Once the scheme is granted it becomes binding on the body corporate, unit owners (present and future) and any other parties with a legal interest in the development.
How long does the application process take?
If the scheme application is unopposed the process may take about 3 months. If the scheme application is opposed it can take longer depending on the nature of the opposition.
What does the Court take into account when considering a repair scheme application?
The leading Court decision on repair schemes is Tisch v Body Corporate No 318596. In Tisch the Court of Appeal stated that the aim of a repair scheme under the Act is to:
‘…balance the interests of each unit holder in a way that imposes terms that achieve the outcome fairest to all unit holders’.
The Court set out 5 guiding principles:
- A scheme with broad support is to be preferred;
- The scheme should be appropriately detailed;
- A scheme can have retrospective effect as long as work to that time is consistent with the purpose of the scheme;
- Work should normally be done to the same standard and at the same time; and
- The terms of the scheme should only depart from the Act and the body corporate rules no more than is reasonably necessary to achieve fairness between all unit owners in the circumstances.
Can Grimshaw & Co help?
Yes, Grimshaw & Co are experts in scheme applications. We have successfully applied for many repair schemes in relation to a variety of unit title developments and repair processes. We are available to advise and assist your body corporate in relation to any repair scheme.