When “Exclusive Use” Isn’t So Exclusive: A Costly Lesson from WASAT

leigh_oliver
Apr 17
3 min read

A recent decision of the State Administrative Tribunal highlights a critical issue in strata management: you can’t assume an exclusive use by-law exists just because the wording suggests it might.

The case — Silverview Holdings Pty Ltd v The Owners of Reflections Waterfront Apartments West Tower — involved a high-value dispute over who pays for nearly $1.9 million in building defects.

The Background

The dispute centred on a penthouse lot in a waterfront development in East Perth. Over time, significant water ingress impacted:

The penthouse (Lot 71)
Apartments below
Common property

The root cause?A combination of defective design and workmanship — in other words, an inherent defect.

Naturally, the big question became:👉 Who pays? The lot owner, or the strata company?

The Strata Company’s Position

The strata company argued that By-law 19 shifted responsibility to the lot owner because:

It granted exclusive use of certain common property (e.g. windows, doors, tiles)
Therefore, under the Strata Titles Act 1985 (WA), the owner should:
- Maintain it
- Repair it
- Pay for it — even if defective

This included structural elements contributing to the water ingress.

The Lot Owner’s Argument

The owner pushed back hard, arguing:

There was no valid exclusive use by-law
No evidence of written consent (which is required)
Even if there were — it shouldn’t extend to structural components

And this is where things got interesting.

What the Tribunal Found

The Tribunal ultimately ruled:

Lot 71 was not subject to a valid exclusive use by-law.

Why?

The decision turned on a surprisingly technical — but crucial — issue:

🔑 1. No Identified Lots

The by-law failed to clearly state which lot (or lots) were granted exclusive use.

That’s a fundamental requirement.

🔑 2. Consent Was Missing (and Couldn’t Be Assumed)

Exclusive use by-laws require written consent from the affected owner(s).

No evidence of consent existed
And critically — the Tribunal said this defect could not be “fixed” by legal presumptions

🔑 3. Poor Drafting = Big Consequences

The by-law was drafted in a way that:

Assumed consent would happen in the future
Didn’t properly confer rights at the outset
Created ambiguity around responsibility

The result? It simply didn’t operate as an exclusive use by-law at all.

Why This Matters (A Lot)

This case reinforces a key principle:

👉 The default position is that the strata company is responsible for common property — including defects.

Even serious ones. Even expensive ones.

And even when it feels like a particular owner should be responsible.

Key Takeaways for Strata Managers & Councils

✔️ 1. Don’t Rely on Assumptions

Just because a by-law looks like an exclusive use by-law doesn’t mean it is one.

✔️ 2. Check the Essentials

A valid exclusive use by-law must:

Clearly identify the lot(s)
Clearly define the area/property
Have written consent from affected owners

✔️ 3. Drafting Matters More Than You Think

Poorly drafted by-laws can shift millions of dollars in liability.

✔️ 4. Inherent Defects Don’t Change the Rules

Under the legislation, the strata company must repair common property:

Even where damage arises from inherent defects.

Final Thought

This decision is a timely reminder that in strata:

If you want to shift responsibility — you need to do it properly.

Because if the by-law fails…👉 the cost doesn’t disappear — it just lands back on the strata company.

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