Remember the importance of getting legal advice before you enter a contract

A Body Corporate was seeking to recover levies from one of its unit owners. The unit owner had been withholding payment of the levies while a leak in the roof remained unfixed.

The Body Corporate rules stated that the Body Corporate “shall repair…keep waterproof and maintain…the exterior of the building including the roof…” Given this, the Body Corporate believed it was liable to repair all parts of the roof because it was assumed that all the roofs were common property. Therefore, the Body Corporate reluctantly entered into a repair agreement with the unit owner to undertake (and pay for) the costs of re-roofing the units.

However, this assumption by the Body Corporate that it was responsible turned out to be false. After signing the agreement it subsequently got legal advice and discovered that under the unit title plan both the roof of the building and the balconies of the apartments were included in the units and therefore part of the unit owners’ property, rather then common property. So it was actually the unit owners who were liable for that part of the roof covering the balconies where the leak was situated.

The Body Corporate then decided to renounce the agreement and sought to recover nearly $50,000 in unpaid levies through the Court.

However, the High Court rejected the claim, and held that the Body Corporate was entitled to enter an agreement with the unit owner, and wasn’t allowed to now simply renounce that agreement just because the true position was known.

This is a good reminder to seek legal advice before signing any significant contract.