Understanding NSW Strata Mediation and Adjudication


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Understanding NSW Strata Mediation and Adjudication

When there’s a disagreement in your strata scheme, whether between lot owners and the strata management, corporate body or owners corporations, and the people involved are unable to resolve the dispute through discussion or the governance and decision making powers of the owners, then these disagreements may need to follow a more formal process to get resolved. Understanding NSW Strata Mediation and Adjudication is important if you have a strata related issue that can’t be resolved.

Common Types Of Strata Disagreements

When many people live close together in a strata complex where they also share common areas, disagreements can occur. Sometimes these disagreements can’t be resolved through one-on-one discussion and need to be addressed through a mediation or adjudication process. Some examples of the more common issues that are addressed in NSW Strata Mediation include:

  • Noise complaints
  • Parking on common property without approval
  • The unauthorised keeping of pets
  • Alterations made to common property.

Other Matters That Are Suited For Mediation

There are many matters which can be taken to mediation. Some of the more common ones can include:

  • Issues with repairs and maintenance
  • Problems with water penetration
  • Air conditioners
  • Disputes relating to by-laws
  • Validity of strata meetings
  • Matters relating to insurance
  • Issues or problems with building managers.

What Is Strata Mediation?

Mediation is an informal process where a neutral and independent mediator assists those involved in a dispute (or strata dispute) to achieve a mutually agreeable resolution. Mediation is one of the most effective and efficient ways of resolving disputes in strata complexes. It’s important to note that all matters that are discussed during mediation remain confidential. This will encourage a full and honest discussion to help find a resolution. Mediation sessions can last up to 3 hours.

When Is Strata Mediation Needed?

It’s ideal for all concerned to get disputes resolved quickly, cheaply, and out of court. The Strata Schemes Management Act 1996 (“Strata Act”) outlines a process for resolving most types of strata disputes. This typically involves steps such as strata mediation, followed by strata adjudication, and then an appeal to the NSW Civil and Administrative Tribunal.

Usually one of the parties involved (e.g. an owner or owners corporation) will apply to the Mediation Services Unit of the NSW Office of Fair Trading for mediation which essentially offers a free mediation service for resolving strata disputes.

What Is Strata Adjudication?

If mediation is unsuccessful, then the next step is for one of the persons involved to make an application to the Strata Schemes Adjudicator. Adjudication is a procedure for resolving disputes without resorting to lengthy and expensive court procedures. Adjudicators make a wide range of orders including orders to comply with by-laws or the Strata Act. This process can take around 3 or 4 months to complete.

Steps Of Strata Adjudication

The basic steps involved in strata adjudication are as follows:

  1. One of the persons involved in the dispute applies for orders from a Strata Schemes Adjudicator. They will submit all their information in writing which includes all/any facts relating to the case.
  2. Interested parties including the owners corporation, can then lodge written submissions either supporting or opposing the application. NB: The interested parties aren’t required to appear in front of anyone in person.
  3. Once the submission period closes, the application is referred to a third party Adjudicator who will consider all the submitted information before handing down a written decision on the case.

While it is not as lengthy as a tribunal hearing, which would be the next step if matters aren’t resolved, the whole adjudication process takes around 3-4 months and can become quite costly.

Differences Between Strata Mediation and Adjudication

Strata mediation is one of the first and most important steps to resolving disputes between owners or owners and the strata or corporate body. Mediation is a shared process where two parties work with a neutral party, with the goal to try and resolve the issue in person.

Adjudication differs in that the adjudicator refers to formally lodged (written) documents and arguments relating to the dispute. They will then make a decision based on this information without meeting any of the interested parties in person.

How To Choose Between Strata Mediation or Adjudication

The first step in any dispute is to try and have a respectful and open discussion. The power of talking an issue out, listening to and sharing ideas and perspectives, will help those involved to understand both sides of the story. An amicable resolution usually means some sort of compromise from both sides of the fence. For this to happen, both parties need to listen to each other’s point of view and try to reach an agreement. Being respectful and calm will hopefully lead to a fruitful outcome.

When this process is unsuccessful, then the next step is to bring in a neutral party (the mediator) to assist the discussions with the goal of reaching a mutually agreeable solution. This process is cost effective and won’t take up too much time (sessions are around 3 hours long). However, when this fails, or if a third-party is unlikely to make any difference in the discussions or opinions of those involved, then adjudication is the next likely step.

After this, if either party wants to dispute the decisions from the adjudication, they can then lodge an appeal to the NSW Civil and Administrative Tribunal.

Cost Comparison Between Strata Mediation vs Adjudication in NSW

Strata mediation is a less expensive process than adjudication. The Mediation Services Unit of the NSW Office of Fair Trading will appoint a person to oversee the process and this is typically provided free of charge. 

The adjudication process will take quite a bit longer. Costs include adjudicator fees, expenses and the Authorised Nominating Authority (ANA) fees. Keeping issues simple and submissions clear, concise and complete can minimise fees. The claimant and respondent pay equal adjudicator fees unless the adjudicator decides differently. If you engage a lawyer, then additional legal costs could potentially go as high as $5,000.

NSW Strata Mediation Process and Benefits

The NSW Strata Mediation process has been well defined by the NSW Government in the Strata Schemes Management Act 1996 (“Strata Act”). The goal of the act is to resolve disputes out of court which will save time and money, and avoid unnecessary stress for all involved.

How NSW Strata Mediation Works

The Mediation Services Unit of NSW Fair Trading will invite the involved persons to participate in a mediation session in the Sydney CBD. Attendance at these sessions is voluntary. That is, the persons who are invited do not have to agree to attend the mediation session. Normally the disputing parties should attend if there is a possibility of some common ground being found to give the dispute the best chance of being resolved.

Benefits of Using Mediation for NSW Strata Disputes

Mediation is normally a free service that is available through the Mediation Services Unit of NSW Fair Trading. There are many benefits to using mediation including:

  • Getting disputes resolved quickly
  • Much lower overall cost than adjudication or tribunal hearings
  • Disputes are more likely to be resolved to the satisfaction of all involved
  • Parties can work together to reach a common agreed solution.

Mediation is a proven way to resolve most disputes. Strata adjudication can offer a simple and relatively low cost way to finalise a dispute when mediation doesn’t work or is not sought. After this point the costs and times to resolve a dispute will increase significantly as lawyers and courts will need to get involved.

Preparing for Strata Mediation in NSW

You should be fully prepared for your mediation session. This means bringing any relevant information such as plans, documents or photographs relating to the issue along to the meeting. This also includes getting your own legal or other advice before the session if you desire.

Next Steps If Mediation Or Adjudication Doesn’t Work

If either person isn’t happy with the outcome of an adjudication, they have the right to appeal against the Adjudicator’s decision to the NSW Civil and Administrative Tribunal. The appeal is a more formal process than adjudication, and operates more like a typical court case. The appeal normally takes six to twelve months to get to a final hearing where the parties will appear before a tribunal member either in person or through a lawyer. Witnesses can be cross-examined at this time and oral submissions are usually made to the tribunal member. The tribunal member normally reserves his or her decision and then issues a written decision several weeks after the hearing. This process can take up to 12 months.

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