Who Pays for Remedial Work in a Strata Building? A Practical Guide for NSW Owners
Your building has concrete cancer in the balcony soffits. Or water is tracking through the podium slab into the carpark. An engineer's defect report is sitting on the strata manager's desk, and the scope of works runs into six figures.
The first question every committee member asks isn't "who do we hire?" — it's "who pays for this?"
After delivering $20M+ in remedial projects across 100+ Sydney strata buildings, we hear this question on almost every first call. The answer depends on three things: what's damaged, how old the building is, and whether the owners corporation has been setting money aside. Here's how it actually works in NSW — and what we've seen go wrong when committees don't understand the funding options early enough.
Common Property vs. Lot Property — The Line That Determines Everything
Under the Strata Schemes Management Act 2015 (NSW), the owners corporation is responsible for maintaining and repairing common property. That includes structural elements like concrete slabs, columns, beams, external walls, rooftop membranes, shared waterproofing, facades, and common area finishes.
Individual lot owners are responsible for anything inside their lot boundary — internal walls, fixtures, flooring, and (in most cases) the waterproof membrane surface on their balcony.
This distinction matters because the most expensive remedial work — concrete cancer repair, facade remediation, full-strip waterproofing, structural strengthening — almost always involves common property. That means the owners corporation pays. And that means every lot owner contributes.
The grey area? Balcony waterproofing. In many strata plans, the membrane serving the balcony above is common property (because it protects the structural slab), but the tiles and screed on top are lot property. When a balcony leaks, both layers are usually compromised. The practical result: the owners corporation funds the structural waterproofing, but the lot owner may be responsible for retiling their own balcony afterward.
If your strata plan doesn't make this clear, check the by-laws or get legal advice before scoping the work. Assumptions here cause disputes later.
The Three Ways Strata Buildings Fund Remedial Work
So who pays for remedial work in strata when the bill arrives? Most remedial projects in Sydney strata buildings are funded through one of three mechanisms — or a combination of all three.
1. The Capital Works Fund (formerly the Sinking Fund)
Every owners corporation in NSW is required to maintain a Capital Works Fund under the Strata Schemes Management Act 2015. This fund is built up through quarterly levies and is specifically intended for major repairs, renewal, and replacement of common property.
A well-managed scheme with an up-to-date 10-year capital works fund plan should have money earmarked for foreseeable remedial work — waterproofing renewal, facade maintenance, concrete repairs. In practice, many schemes are underfunded. A significant proportion of NSW strata schemes have capital works funds that would not cover a major remedial project without additional levies. (For a deeper look at how the April 2026 NSW reforms have tightened the standards for these plans, see our guide on what the 2026 Capital Works Fund changes mean for your remedial building budget.)
If your capital works fund can cover the scope, the committee can approve the expenditure at a general meeting and proceed. No special levy required. This is the fastest path to getting work underway.
2. Special Levies
When the capital works fund falls short — which is common for projects exceeding $250,000 — the owners corporation raises a special levy. This is an additional, one-off contribution from every lot owner, calculated based on unit entitlements.
Special levies for remedial work require approval at a general meeting. If the levy is calculated in proportion to unit entitlements (the standard method), it requires a simple majority. If the committee proposes a different allocation method, it requires a special resolution (75% of votes).
Here's the part committees don't always anticipate: special levies create financial stress for individual owners. A $300,000 waterproofing project across a 30-lot scheme could mean $10,000 per owner — more for larger units with higher entitlements. Some owners can't pay. That creates collection issues, delays the project, and compounds the damage.
This is why early diagnosis matters. A problem identified at $80,000 that's deferred for three years can become a $300,000 problem. The capital works fund might have covered the first number. It won't cover the second.
3. Strata Loans and Financing
Some owners corporations use strata-specific loan products to fund major remedial work without imposing a single large special levy. The loan is taken out in the name of the owners corporation and repaid through levies over 5–10 years.
The advantage: it spreads the cost, reducing the immediate financial burden on individual owners. The disadvantage: interest costs add 10–20% to the total project cost, and the scheme carries debt on its books, which can affect property valuations and resale.
Strata financing is increasingly common for projects in the $250,000–$1,000,000+ range where the alternative — a single special levy of $15,000–$30,000 per lot — would cause hardship.
What If the Building Is New? Statutory Warranties and Defect Claims
For buildings completed after 1 June 2020 under the Design and Building Practitioners Act 2020 (NSW), the builder and registered practitioners carry statutory warranties for defective work. Major defects have a 6-year warranty period. Minor defects have a 2-year period.
If your building is within the warranty period and the remedial work is needed because of defective construction — not wear and tear — the owners corporation may be able to claim against the builder, the developer, or their insurer.
The catch: defect claims take time. NCAT proceedings can run 12–18 months. Court proceedings take longer. Meanwhile, the building is still deteriorating. Water ingress doesn't pause because a legal claim is underway.
Many committees face a difficult choice: wait for the claim to resolve (and watch the damage compound), or fund the repairs now and seek recovery later. In most cases, the pragmatic answer is to fund the critical repairs immediately — especially waterproofing and structural work where delay multiplies cost — and pursue the claim in parallel.
A strata lawyer can advise on whether to lodge a claim with the NSW Building Commissioner, pursue NCAT proceedings, or negotiate directly with the builder. The defect report from your engineer is the foundation of any claim.
The Real Cost of Deferring Remedial Work
Committees defer remedial work for understandable reasons: the levy increase is unpopular, the AGM is months away, the damage "doesn't look that bad yet."
But remedial building work has a compounding cost curve. Here's what deferral actually looks like in dollar terms:
Concrete cancer (spalling repair): A localised patch repair of 10–15 spalling locations on balcony soffits might cost $30,000–$60,000 if addressed early. On a recent project in St Leonards, a committee deferred concrete repairs for four years. What started as localised spalling on 12 balcony soffits became full delamination across three levels — the scope grew from an estimated $55,000 to $320,000. The corrosion had spread through the reinforcement mesh, requiring full soffit remediation, not just patch repairs.
Waterproofing failure: A failed membrane on a single rooftop level, caught early, might cost $80,000–$120,000 to strip and re-waterproof. Left untreated, water tracks into the slab, corrodes reinforcement, damages internal linings in units below, and triggers insurance claims from affected owners. The remediation scope grows to include structural repair, internal make-good, and potentially temporary relocation — $300,000–$600,000+.
Facade cracking and deterioration: Hairline cracking in rendered facades can be sealed and coated for $40,000–$80,000. Once water penetrates behind the render, it corrodes wall ties, degrades insulation, and compromises the facade's structural connection to the frame. Full facade strip-and-rebuild: $500,000–$2,000,000+.
The pattern is the same every time: early intervention is a fraction of the cost of deferred remediation. The capital works fund can usually cover early intervention. It almost never covers the deferred number.
How to Get Your Committee to Approve the Work
If you're a strata manager or committee member reading this because you have a defect report and need to get remedial work funded, here's the practical sequence:
Step 1: Get a proper investigation. Not a visual inspection — a documented building investigation by a qualified engineer that identifies the root cause, not just the symptoms. This becomes the basis for accurate scoping and costing.
Step 2: Get at least two detailed quotes. Ensure they reference the engineer's specification, include methodology (not just a lump sum), and specify warranty terms. Comparing like-for-like quotes is the only way to give the committee confidence in the pricing.
Step 3: Present the cost of doing nothing. Committees respond to risk. Show the current cost versus the projected cost if deferred 2–3 years. Show the insurance implications. Show the compliance obligations under the Strata Schemes Management Act (the owners corporation has a statutory duty to maintain common property).
Step 4: Offer a funding pathway. Don't just present the total cost — present how it gets paid. Capital works fund contribution + special levy + potential strata loan. Break the per-lot cost into quarterly instalments. Make it digestible.
Step 5: Vote at a general meeting. The owners corporation must approve major expenditure at a properly convened general meeting. Ensure the agenda includes the scope, the cost, the funding method, and the consequences of inaction. Give owners the information they need to vote yes.
What to Look for in a Remedial Contractor
Understanding who pays for remedial work in strata is only half the equation. Once funding is approved, choosing the right contractor determines whether the money is well spent or wasted on a repair that fails in three years.
For any remedial work on a Class 2 building (residential apartment buildings over 3 storeys) in NSW, the contractor must be a registered building practitioner under the Design and Building Practitioners Act 2020. This isn't optional — it's a legal requirement. Ask for the licence number and verify it on the NSW Fair Trading website.
Beyond registration, look for a contractor who works to the engineer's specification (not their own shortcut), provides formal QA documentation on every project, offers a written warranty with a specific term (not "warranty provided" — ask for the number of years), and has demonstrated experience on occupied strata buildings where resident coordination, noise management, and staged access are part of the scope.
Remedial work in occupied buildings is operationally harder than in vacant ones. If your building is occupied — and most strata buildings are — make sure the contractor has done this before. Ask for project references in similar building types.
Frequently Asked Questions
Who pays for remedial work in a strata building in NSW?
The owners corporation pays for remedial work on common property, funded through the Capital Works Fund, special levies, or strata loans. Individual lot owners contribute based on their unit entitlements. For buildings within the statutory warranty period, the builder or developer may be liable for defective work.
What is a special levy for strata remedial work?
A special levy is a one-off contribution from all lot owners to fund major repairs when the Capital Works Fund is insufficient. It must be approved at a general meeting and is typically calculated based on unit entitlements.
How much does remedial work cost in a strata building?
Costs vary significantly by scope. Localised concrete cancer repair may cost $30,000–$60,000, waterproofing a single rooftop level $80,000–$120,000, and full facade remediation $500,000–$2,000,000+. Early intervention is typically a fraction of deferred remediation costs.
Can the owners corporation claim against the builder for defective work?
Yes, if the building is within the statutory warranty period (6 years for major defects, 2 years for minor defects under the Design and Building Practitioners Act 2020). The owners corporation can lodge a claim with the NSW Building Commissioner, pursue NCAT proceedings, or negotiate directly with the builder.
Does the remedial contractor need to be registered for strata building work?
Yes. For Class 2 buildings (residential apartment buildings over 3 storeys) in NSW, the contractor must be a registered building practitioner under the Design and Building Practitioners Act 2020. Always ask for the licence number and verify it on the NSW Fair Trading website.
Atomic Projects is a Class 2 registered building practitioner (Licence 360636C) specialising in remedial works for strata and commercial buildings across Sydney. We've delivered $20M+ in remedial projects across 100+ buildings. If you have an engineer's defect report and need a scope and quote for the remedial works, book a free site assessment.
