9 September 2025
September 2025 – STRATA INSITE
In the September 2025 edition we cover: FEATURED ARTICLES: NSW: A New Era for Strata Contracts: Unfair Terms Now Banned in NSW QLD: Disclosure or Exposure? Navigating the legal traps…
The other week, we explored section 23A(3)(a) of the Owners Corporations Act 2006 (Vic) (the Act), a mechanism for recouping insurance costs, like excess or premium increases, when a lot owner’s culpable or negligent conduct causes damage.
This week, we turn to a different (but equally important) tool: section 23A(3)(b).
When common property is damaged, the first question is often: “Is it covered by insurance?” But what if the answer is no?
Section 23A(3)(b) empowers an Owners Corporation (OC) to levy a lot owner for damage to common property caused by the lot owner or their tenant when:
It’s a clause that reads simply but applying it is another matter entirely.
What does this mean in practice?
If a lot owner’s actions cause a pipe to burst, a door to shatter, or a balcony to leak, and the cost of fixing it is:
…the OC can levy that lot owner directly to recoup the repair costs.
Unlike section 23A(3)(a), no finding of fault or gross negligence is required under 23A(3)(b). The key is causation, not intention, fault, or foreseeability.
That makes it a powerful statutory tool for recovering low-value, high-frequency damage costs, especially those that fall into the growing “insurance gap.”
More Than Meets the Clause
At face value, 23A(3)(b) looks like a pragmatic fix: “If someone causes minor damage, and insurance won’t cover it—just bill them.”
But in practice, it opens a can of procedural and evidentiary worms:
Without clear answers or a documented process, even low-value disputes can escalate quickly.
Practical Considerations
To rely on section 23A(3)(b) effectively and fairly, OCs and managers should:
Final thoughts
Section 23A(3)(b) is quietly becoming a key tool in OC governance and risk management. It fills a critical, and often overlooked, gap: dealing with damage that’s too minor to claim, but too costly to absorb.
When applied carefully and transparently, it strikes a fair balance between individual responsibility and collective financial stewardship.
© Bugden Allen Group Legal Pty Ltd. This is general information only and not legal advice. You should not rely on this information without seeking legal advice tailored to your specific circumstances.