VIC Owners Corporation - Common Water Dispute

[Hansell213]

Hi,

I am an owner of a unit in Victoria. The unit is one of several on a block of land which comprises common land that is managed by the Owners Corporation (OC).

A long-standing dispute with the water authority with the OC Manager and Water Authority over common water usage has come to a head. The OC manager has failed to pay the water accounts for 5+ years and not informed the owners of the status of the accounts. This was recently made known to each property owner from a legal firm who advised the total amount outstanding and a list of transactions.

The OC Manager's reason for not paying was because the accounts could not be justified because the reads on the main meter were for unused water. This related to water between the main and each check meter (one for each unit). Effectively, the OC Manager has a point, that is -- the water that has passed the main which is still in the main pipes is yet to be consumed by each residence, effectively billed twice.

In addition, there is no rhyme of reason as to most of the reads. Most exceed any reasonable level consumption. Approx $2000.00 of the total account relates to a water leak, which the authority should have been able to credit (so I am told).

My questions are:

1. The debt of over $5000.00 was first advised to each owner in Feb 2016. What duty of care does the water company have to advise the owners and outstanding account exists, before matters become legal?

2. Sundry costs totalling over $1800.00 have been included to the account by the water authority. Upon enquiry I found these amounts to be legal costs. Until recently, no owner has been made aware of the debt or the legal action. It appears there has been a lack of disclosure to advise owners of additional costs from the OC Manager and the water company/legal firm.

Is it appropriate for these charges to be imposed in the absence of formal advice?

3. The water charges are for consumption only. As a landlord not residing at the property, shouldn't this be charged to the tenants. Not sure if there needs to be a change in the OC rules, but can this be incorporated going forward and billed by the water company directly to each resident?

4. Are there caps on what a water authority can credit for a leak or is this discretionary?

I have only found limited information on water disputes for Owners Corporations, via the Water Act, Consumer Affairs Victoria, and the Ombudsman, so any help would be appreciated.

Regards

 

[Rod]

Is the OC managed by some owners, or a separate OC management company?

And who knew about the leak? When was it discovered, who by, when was it fixed? How long did this go on for?

Without all the facts it is hard to give accurate opinions. Probably need a lawyer to sort it out. At first glance, it seems as the owners are responsible for the water usage, possibly the OC for legal costs.

 

[Hansell213]

OC is managed by a Management Company who gets paid a fee. The leak was discovered by the Manager after water accounts escalated. He organised a plumber to fix it back in 2011. At the time the OC Manager put in a claim with the water company for unclaimed water use, due to the leak, however the water company has no record.

More recently, I found the OC Manager is well known to the same water company for not paying water accounts. Most are for similar reasons, some more extreme. Not sure if that is why the water company may be unwilling to co-operate, but that is the message I received from the OC Manager.

As far as how long this has been going; well the water account was never paid by the OC Manager since they was appointed back in early 2000's. From that time to mid 2010, the water authority kept inconsistent records on common water use. For example, usage was recorded but not charged for many years. In addition, adhoc credits were applied to the account. My understanding is the credits were in relation to the concerns the OC Manager had with unused water still in the mains.

I am aware the Water Act was amended in 2012 that gave water companies greater power to enforce water use by owners corporations, which is probably why they are able to do what their doing.

I tend to agree, the OC Manager should be responsible for the legal costs as it is their job to know what is going on with the account, but how do the owners enforce that. i.e. is that an issue that needs to be taken up with VCAT?

I relation to my earlier questions, I would really like to know the answer to 1 and 3.

1. The debt of over $5000.00 was first advised to each owner in Feb 2016. What duty of care does the water company have to advise the owners an outstanding account exists, before matters become legal? {is advice to the OC Manager sufficient?}

2. Sundry costs totalling over $1800.00 have been included to the account by the water authority. Upon enquiry I found these amounts to be legal costs. Until recently, no owner has been made aware of the debt or the legal action. It appears there has been a lack of disclosure to advise owners of additional costs from the OC Manager and the water company/legal firm.

Is it appropriate for these charges to be imposed in the absence of formal advice?

3. The water charges are for consumption only. As a landlord not residing at the property, shouldn't this be charged to the tenants. Not sure if there needs to be a change in the OC rules, but can this be incorporated going forward and billed by the water company directly to each resident?

4. Are there caps on what a water authority can credit for a leak or is this discretionary?


Thanks again.

 

[Rod]

Keep in mind my legal knowledge is limited and not always perfect Hoping someone with better property law knowledge assists here. But in the meantime this is my take on your problems:

1) None. The OC is a legal 'person' and the contract for the common water meter is with the OC, not the owners. It is the OC's responsibility to properly manage the water account. It is the owner's responsibility to appoint an OC management company who can actual manage and the owners should follow up with relevant questions at the AGM. The water company should not have to jump hoops and sing karaoke because both the OC and owners are not doing their jobs properly.
2) I suspect the OC was told to pay up or incur additional charges. The OC didn't pay, they incurred additional charges.
3) Unlikely. Common water usage has nothing to do with tenants and I doubt common water usage can be 'apportioned' to tenants. Hard to manage even if it could be.
4) No idea.

Sorry to be blunt. Managing OCs and OC committees can be like herding cats at times. It is a tough gig.