Stolfa: Building on Common Property Doesn't Make It Yours

A common townhouse scenario: an owner builds a pergola, paves an area, installs a shed, or extends a deck. Years later, they (or a buyer) assume the addition is part of their lot. The Stolfa case made clear: it isn't. Building on common property doesn't absorb the common property into your lot.

What Brereton J said

At paragraph [84], His Honour put it bluntly:

Stolfa relied on and applied the earlier NSW Court of Appeal authority of Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46, at 54E-F — the same principle stated 12 years earlier.

What this means in plain English

1. If you build something on common property — even with permission — the structure becomes part of the common property.
2. The owners corporation owns it. Not you.
3. Even if you have an exclusive use by-law over that part of common property, the area still remains common property in character. Exclusive use gives you rights to use it. It doesn't make it yours.

This applies whether the structure is a pergola, deck, planter, paving, a wall extension, a shed bolted to the slab, or anything else fixed to common property.

Why this matters for townhouses

Townhouse and villa schemes often have a long history of owners "tidying up" or "improving" common areas:

• Extending a paved area at the front of a townhouse
• Building a pergola over a balcony or courtyard
• Putting up a garden shed in a corner of common property
• Adding fencing or screening to common areas
• Hard-landscaping a previously turf area

Without a by-law, these works are typically unauthorised and the structures legally remain common property. That has real consequences:

• Maintenance: the OC is the legal owner, but in practice the original owner often maintains it — until it breaks, and then arguments start about who pays.
• Sale: when a lot sells, a careful buyer's conveyancer will ask "is this structure part of the lot or common property?" If the answer is unclear, it can hold up settlement.
• Removal: a future committee can decide to remove the structure (by special resolution) if it's no longer wanted — and there's no legal obligation to compensate the lot owner.
• Insurance: the OC may not have insured a structure it doesn't know about.

Trespass and encroachment

Bannermans Lawyers' commentary on Stolfa points to a less-known angle: if a lot owner installs something on common property without authority, that can be trespass on the owners corporation's property. And if a fixture from a lot extends into common property without authority, that's encroachment.

Either can give rise to enforcement action under Section 232 of the Strata Schemes Management Act, or even a claim for damages — though in practice, most schemes prefer to resolve historical works through a properly drafted by-law.