What does Duty of Care mean for Bodies Corporate?

There are two principal considerations when considering duty of care in relation to strata;

  1. Under common law; a Body Corporate has a duty of care and must take reasonable action to ensure that anyone, including owners, service providers, tenants, visitors and even trespassers who come onto the common property, are not injured.This is a non-delegable duty that applies to all owners and managers of property. Strata properties are particularly vulnerable to being legally pursued in relation to breach of these duties in cases of personal injury due to the lack of control over people entering the common property and statutory requirements to have large insurance protections and indemnities over common property for injury. Keeping the property in good repair, well-serviced, regularly inspected and financially managed are the first steps to mitigating the risks of injury on the common property.
  2. Under the Work Health and Safety Act 2011, a Body Corporate must consider their duties in regard to the health and safety of any workers engaged on their common property.Duties under the WHSA are prescriptive, requiring a person conducting a business or undertaking, so far as is reasonably practicable, to ensure that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking. Additionally, the Act requires that persons conducting a business or undertaking and persons in control of workplace premises identify and assess hazards and implement control measures to minimise or eliminate risks to the health and safety of workers. Control measures must be monitored for effectiveness on a regular basis.

Why do Sinking Fund Forecasts need to be updated?
The cost of building materials and labour continues to rise as does the associated costs of maintenance like scaffolding and adhering to safe work practices. Recently construction costs rose by an incredible 36% in one 12 month period and the Housing Industry Association’s trade cost  index continues to show that there is an undersupply in many trade areas keeping an upwards pressure on costs.

Eliminate future risks
Avoid any future legal hassles; there have been recent cases where new owners have taken previous owners/committee members to task for not fully budgeting for maintenance costs after large special levies have had to be struck. New financing requirements coming…
Fannie Mae and Freddie Mac with over 50% of the US mortgage market recently announced that it will now not lend money to Bodies Corporate (Home Owners Association) that do not have fully funded Sinking Fund Account as per the figures provided in a professional up to date Sinking Fund Forecast. It is only a matter of time before Australian financiers require the same.

How often should I update my Sinking Fund forecast?
Most buildings should update their Sinking Fund Forecast at least every 3 years to keep up with price escalation in buildings and other associated costs.

What needs to be done and which buildings must comply?
Owners and managers are now required to identify all Asbestos and Asbestos Containing Materials (ACM) within their buildings, include it on the onsite register and create an Asbestos Management Plan (AMP) – What’s your plan to ensure all of your buildings are compliant?

All buildings that were built before 1st January 2004 must comply. Why this date? It may surprise you to know that while asbestos in the form of Crocidolite was phased out from 1967, asbestos in the form of Amosite & Chrysotile (white) asbestos was used until late 2003.

What are the penalties if I do not comply with these regulations?
Under the Work Health and Safety Regulation 2011, the maximum penalty for non‐compliance is a $30,000 fine. However, if your failure to comply leads to a serious illness (mesothelioma), you may face a $3,000,000 fine, 5 years prison and/or damages from civil litigation.

Do residential buildings have to comply?
Yes. While the regulation has an exemption for residential buildings, the exemption is very limited and will not apply if you, your owners or your tenants engage in any work from home, direct any employee or contractor on the common property, or operate any commercial activity. This also means the exemption is inapplicable if your building has a manager, even if they are contractors that are off‐site. You also have a duty of care under
common law to ensure workers or visitors are not exposed to airborne asbestos fibres.

Who are the responsible person(s) under the legislation?
The legislation applies to persons conducting a business or undertaking, which may include:‐

  • The owner of the premises;
  • A person, who has, under any contract or lease, an obligation to maintain or repair the premises;
  • A person who is occupying the premises;
  • A person who is able to make decisions and changes to the structure and use of the workplace.
  • An employer at the premises.
  • A person with management control over the workplace, for example, a property management group or agent.

In most cases there will be more than one person with management or control. All share the responsibility and will be drawn into any fines or prosecutions for non‐compliance. It is hard to conceive that both a Strata Community Manager and the Body Corporate will not fit into one of the definitions above.

Who can I use to complete the survey?
Asbestos surveyors must have sufficient experience to conduct a thorough survey of your property. They must also:

  • Be properly trained to handle and take asbestos samples
  • Have the knowledge and experience to identify suspected asbestos
  • Be able to determine asbestos risk and controls measures
  • Be familiar with building and construction practices to determine where asbestos is likely to be present
  • Be able to determine that material may be friable or nonfriable asbestos and evaluate its condition.

Keep in mind that it is your responsibility to ensure the surveyor you engage is competent and meets their obligations under the law. The risk of asbestos remaining unidentified on your property remains with you.

How often does the common property need to be reinspected?
Every 12 months if asbestos is left intact onsite in a stable encapsulated state (rather than removing it). There are a number of reasons why including:‐

  • ACM is dangerous ‐ in fact, it is deadly and is a high risk for a building and must be monitored;
  • The ACM will be continually degrading and must be monitored;
  • ACM is often damaged by activities around a building.

What about the risk from civil litigation?
The biggest concern for Bodies Corporate and Managers is the Risk from a civil claim from a person who has contracted asbestosis, mesothelioma or some other life threatening illness as a result of residing in, working in, or visiting a building containing asbestos which has not been properly managed. For a Body Corporate to have any chance of defending itself from such a claim it would need to show that it had properly identified,
managed and where necessary eliminated any asbestos risks.

Step 1 – Get Surveys completed

  • Identify a competent survey company, like Solutions in Engineering
  • Order surveys for all buildings completed prior to 2004
  • It is strongly suggested you preorder the required onsite Asbestos register and management plan in the case where asbestos is found

Step 2 – Implement Survey Recommendations

  • Keep all asbestos documentation onsite
  • Ensure contractors are aware of asbestos documentation

You can rely on Solutions in Engineering’s competency and experience. We have been supplying you with Asbestos surveys for over a decade.