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Steps to Mediation

Thursday, 17th October 2013

It's a fact of life that we are not all going to get along and sometimes we will need a third party to come in and resolve a dispute for us. Community living unfortunately has more than its fair share of disputes as people either don't understand their obligations or they decide to ignore the rules.

With the help of NSW Fair Trading and  Angela Carruthers from Robinsons Strata Management find your steps to mediation. 

First you will hear from Angela Carruthers from Robinson Strata Management and then NSW Fair Trading will answers some questions.

Q: At what point in a dispute do you realise that you're going to need to escalate it?

A: Firstly, we need to be clear that strata managers don't escalate disputes.  The dispute resolution process is clearly outlined by the NSW Department of Fair Trading on the correct procedure to follow before putting in an order for mediation.

Generally once a complaint is received about a breach of by-law or a section of NSW Strata Schemes Management Act we issue a letter to the resident of the unit.  If that person is a tenant, a copy will go to the owners/property manager as well.

If they continue to breach then further letters will be sent and if after approximately three warning letters, the next stage would be issuing a Notice to Comply and this has to be approved at a meeting of the executive committee.  If they breach again within 12 months of receiving the Notice to Comply then another order can be issued but again it has to be approved at a meeting of the executive committee.  Once the second order is issued it goes to mediation.  It is up to the executive committee to advise on who attends that mediation session.

Q: Do you go straight to a mediator every time or do you file the matter with the Consumer, Trader and Tenancy Tribunal (CTTT) and then it goes to mediation?

A: The matter must go to mediation before going to the CTTT.  However one or both parties may not wish to attend.  At that stage a decision would be made for the order to be taken out for a fine or the CTTT may wish the matter to be heard at adjudication when the adjudicator would make a decision and issue and order/decision.

Q:  Have you ever used a private mediator?  Were they as successful as the CTTT mediators?

A:  I have recently had the executive committee request a strata lawyer act on their behalf at mediation and they successfully had the applicant cancel the proceedings.  This is unusual because generally because the CTTT is a tribunal, lawyers don't attend. In this case it was because the defendant was a repeat offender.

Q:  Are the CTTT mediators successful in most cases or do people really just want their day before the CTTT?

A:  In mediation that I have been involved with, have been successful and not gone to the CTTT, not always but certainly the majority can be settled.

Q:  What are the most common issues/disputes that are resolved by mediation in your experience.

A:  Common issues resolved at mediation would be parking, noise, attachment to common property (where people don't realise the wall or balcony does not belong to them exclusively) and generally the breach of the standard Section 47 by-laws.

NSW Fair Trading

Q:  What has usually occurred for a matter to end up at the Consumer, Trader and Tenancy Tribunal (CTTT)?

A:  There are as many reasons as there are strata schemes.  It may be a lack of communication, a breach of by-laws, unauthorised works to common property, a lack of understanding or strata legislation, a personality conflict or any other reason.

Q:  Do most situations reach a satisfactory conclusion because of mediation?

A:  About 70 percent of matters resolve at mediation.

Q:  What happens during a mediation session?

A:  The mediator facilitates a discussion of the issues to help the parties better understand each other's point of view.  They may also bring in a NSW Fair Trading officer who can provide information about strata legislative requirements.  This is often of great assistance as it may clarify such things as meeting procedures, levy obligation and repair responsibilities.  All parties getting this information at he same time can help to avoid misunderstandings of the Act.

The mediator will help the parties identify options and negotiate workable, realist terms of settlement.

Q:  How should a party prepare for a mediation session?

A:  The parties should obtain any relevant factual information to support their case eg. builder's reports, copies of the strata plan if common property is an issue, relevant photographs, copies of relevant by-laws.  They should also consider what would be a workable outcome for them.

Q:  Do you have an example of a highly successful outcome because of mediation and an example of one that dismally failed.

A:  An owners corporation applied against an owner who was parking on common property without permission.  During the mediation, the owner explained that their car space and training area was too narrow for their car (the underground car park was very tightly spaced).  After further discussion it became apparent that one of the executive committee members had a better placed car space that they were not using as they no longer drove a car.  An agreement was reached to swap car spaces - an agreement that no-one had foreseen and which restored harmony to the scheme.

An owner applied against the owners corporation for urgently needed repairs and maintenance to common property.  The scheme has a majority of owners who did not live at the scheme and rarely included themselves in meetings or any owners corporation decisions.  The mediation could not achieve an outcome as the strata managing agent explained that too many owners were not paying their levies or concerned about the management of common property.  The applicant decided to apply for a compulsory strata managing agent with full powers to manage the scheme and chase owners who were behind in levies.

Q:  What happens when mediation works (any further paper work etc)?

A:  The parties will sign a written agreement at the end of the mediation session that details the terms of their settlement.

Q:  What happens when mediation fails - next steps?

A:  If mediation is unsuccessful, the next step is for the applicant to apply for Adjudication before the CTTT.  This involves lodging an application for Adjudication which should have a written submission with it that provides the evidence to support the order being sought.  There is a one month period for parties to submit written submissions.  The Adjudicator will then make a written decision about four to six weeks after the end of that written submission period.

This story was supplied by BCS Strata Management.

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