c. Breach of the Deed of Mutual Covenant and the Building Management Ordinance

c. Breach of the Deed of Mutual Covenant and the Building Management Ordinance

A breach of the Deed of Mutual Covenant (“DMC”) is a common cause of action in water seepage disputes, often pleaded together with private nuisance and negligence. The DMC is a private contract binding all owners in a building and regulates their respective rights and obligations. 

Common DMC obligations in water seepage cases 

While specific clauses vary, most DMCs contain several standardised obligations for flat owners and building managers: 

• Duty to maintain private units: Owners are typically required to keep the interior of their units, including exclusive-use pipes, sanitary fitments, and waterproofing layers serving only their unit, in good repair and condition. 
• Prohibition of nuisance: Express covenants usually forbid owners from doing or permitting any act that may become a nuisance, annoyance, or cause damage to other owners or occupiers. 
• Indemnity clauses: Many DMCs require an owner to indemnify the building manager and other owners against claims for loss or damage caused by his negligence or the overflow of water from his flat. 
• Management of common parts: The DMC, often in conjunction with section 18(1) of the Building Management Ordinance (Cap. 344), imposes a duty on the Incorporated Owners or the building manager to maintain common parts like roofs and external walls in good condition. 

Despite some clauses being framed in negative terms (e.g. “not to permit nuisance”), the obligation to stop seepage may be interpreted as a positive duty to maintain pipes and waterproofing to prevent seepage. 

Statutory duties 

Duties under the DMC are supplemented by the Building Management Ordinance (Cap. 344). 

• Individual owners (section 34H): If a DMC is silent on a particular owner’s maintenance duty, section 34H imposes a statutory duty on owners who have exclusive possession or enjoyment of a part of a building to maintain that part in good repair and condition. This may apply to private pipes, sanitary fittings, waterproofing membranes, and other facilities serving only that owner’s unit. 
• Incorporated owners (section 18): The Incorporated Owners have a statutory duty to maintain the common parts in a state of good and serviceable repair. 
• Misuse of common parts (section 34I): Section 34I prohibits the use of common parts in a way that unreasonably interferes with the enjoyment of those parts by other owners or occupiers. Any contravention of this prohibition is deemed to be a breach of the DMC. This allows the plaintiff to bring a claim for breach of covenant. 

Determining liability 

Liability for a breach of the DMC or the Building Management Ordinance in seepage cases depends on whether the defect originated from a common part or a private part. If the seepage originates from a private unit or facilities serving only that unit, the individual owner may be liable. If the seepage originates from common parts, the Incorporated Owners or building manager may be liable. For the distinction between common parts and private parts, please refer to “Sources of water seepage”. 

The courts have held that maintenance duties under the DMC and section 18(1) of the Building Management Ordinance are not absolute or strict. Unless the specific language of the DMC provides otherwise, owners, building managers, and Incorporated Owners are generally only required to do what is fair, just, and reasonable or “reasonably necessary” in the circumstances. 

The relevant party is typically not liable for a defect until they have actual or constructive knowledge of it and subsequently fail to take appropriate remedial steps within a reasonable time.  

Once this duty to abate a nuisance arises, it is non-delegable. The defendant may remain liable even if they hired a competent independent contractor who failed to eliminate the leakage. 

Breach by individual owners 

Liability for an individual owner is typically established under the DMC or section 34H of the Building Management Ordinance if the plaintiff proves the seepage originated from the defendant’s flat due to: 

• Defective private facilities: Failure to maintain or repair internal water facilities, such as fresh water supply pipes, seawater flushing systems, U-traps, or leaking sanitary fitments like bathtubs and toilet bowls. 
• Failed waterproofing: Deterioration of the waterproofing membrane or sealant (such as silicone seals) in “wet areas” like bathrooms or kitchens. 
• Unauthorised building works: Installing unapproved structures, such as additional toilets, sinks, or water tanks, that subsequently cause seepage or damage the building's structural integrity. 
• Failure to abate: Continuing to allow water to leak after being notified of the problem by neighbours, the management office, or the Joint Office for Investigation of Water Seepage Complaints. 

Breach by the Incorporated Owners 

The Incorporated Owners may be found in breach of the DMC and section 18(1) of the Building Management Ordinance if seepage originates from common parts.  

Breaches include: 

• Failure to maintain common facilities: Neglecting communal systems such as communal water tanks, fire service tanks, or main drainage pipes that serve the building as a whole. 
• Neglect of the building fabric: Failing to repair defective waterproofing layers on the roof, external walls, or structural concrete slabs after receiving complaints or statutory orders from government departments. 

• Misuse of common parts: Permitting or failing to prevent the unauthorised conversion of common parts for private use (violating Section 34I of the Building Management Ordinance), such as allowing additional drainage pipes to be connected to communal systems.