In this episode, Reena and I are tackling these tough questions:

and many more.

Links mentioned:

3 Responses

  1. Hi Amanda,

    Interesting concept you raised regarding damage to fixtures and fittings and an owners corporation refusal to lodge an insurance claim.

    Firstly, section 161 3 (a) of the SSMA, requires an insurance policy to insure against damage to lot owners fixtures and improvements forming part of the building.

    Section 160 1 goes on to advise an Owners corporation must insure the building if it is destroyed or damaged by fire, lightning, explosion or any other occurrence specified in the policy. Given most strata specialist policies are broad form accidental loss or damage policies, this means that all damage to the building (inclusive of lot owners fixtures and fittings required to be insured per section 161 3(a) are insured for damage unless otherwise excluded from cover.

    In the case your podcast raises specifically, damage caused to a lot owners fixture by another lot owners exclusive use hot water boiler is considered insurable damage under the strata insurance policy. There are no exclusions relating to this kind of event.

    Interestingly, section 174 then goes on to say that by application, the tribunal may order an insurance claim be made any person who is entitled to the benefit of insurance taken out under the Act.

    This concept also dives into complexities of the insurance contracts act, however to keep this simple, a lot owner is a third party beneficiary to the contract and under the insurance contracts act is entitled to make a claim on the owners corporations insurance. I would expect that section 174 gives the tribunal the power to order this claim as opposed to having to take the necessary action under the ICA (federal legislation).

    I’m sure you can draw the conclusion I am getting at here is that lot owners fixtures and fittings are required to be insured against damage, unless specifically excluded from the damage policy and that the owners corporation should be making the appropriate claim to save unnecessary NCAT action along with liaison with the other lot owner, which is unlikely to lead to any results for the affected party

  2. I have searched a few of your podcasts around insurance and cannot find something that might help with this as it is probably another grey area. In short, my son owns a unit, let it out to someone who turned out to be psychotic despite all the usual financial checks. My goodness he was also a doctor. The guy did damage to the common property. Garage door damaged and paint in the hall way. The son has LL insurance but could not get property insurance as the Owners Corp have that. He was presented with a bill for $30k for damage and video surveillance. How does a LL cover themselves against this?

    1. Hi Sue, good question. Where did the $30K bill come from? If the owners corporation, what do they say entitles them to send a bill to your son for damage done by someone else? (maybe they have a by-law that allows them to do this…)

      Amanda.

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