Owners become members of a Body Corporate, Owners Corporation, Strata Company, Community Association or other similar legal entity when they buy into a Strata or Community title scheme.
Owners have a share in both the assets and liabilities of the entity and a legal responsibility for maintenance, repair and overall management of the common property.
Owners should rectify defects, and action maintenance-related items, promptly. Insurers may not commence resultant damage repairs, or replacement/reinstatement, until defects or maintenance-related items causing that damage have been rectified.
Examples of routine maintenance include:
Cleaning of gutters and valleys to prevent water ingress.
Pressure testing of pipes to prevent burst pipes and water damage within walls.
Dry wall moisture testing to identify leaking washers on taps.
Roof inspections to check for cracked roof tiles and loose flashings.
Shower alcoves. Missing or loose grout can be a sign of failed waterproofing which in turn causes water ingress to walls and shower bases, particularly in multi-storey apartment buildings.
Air conditioners starting to show visible wear and tear.
Rusting of metal fittings, balustrades, footings and electrical components – including air conditioners and water heaters. Very probable in coastal areas due to air salinity and high winds.
Always use insured, licensed trades for maintenance and repairs. In this way all workmanship can be traced.
We suggest requesting a full written scope of works that includes deliverables and a timeline.
The following checklist provides a framework to support building inspection and maintenance plans.
As an Owner and member of a Body Corporate you have a Duty of Disclosure, under the Insurance Contracts Act 1984, to disclose all relevant information that could affect an insurers decision on the insurance cover they can offer. Defects and other maintenance items that remain unrepaired may fall into this category, and should be notified to your insurer. Your duty of disclosure applies when the contract is entered into, or renewed, extended, varied or reinstated.
A lack of maintenance can lead to defects that may not be covered under a Scheme’s strata insurance policy, meaning that in the event of a claim owners can be left with large, unforeseen exposures. Further, an ongoing lack of maintenance can lead to further claims which can result in higher Strata insurance premiums.
At Strata Community Insurance, we understand that your property is one of your largest and most precious assets. With our Strength of Experience, you can be assured that we understand the obligations and exposures of owners. Dealing exclusively in the Strata market, our products are designed by Strata experts for the Strata Community.
As an owner it’s very important to be clear on what is and what is not covered under your policy. The Strata Community Insurance Residential and Commercial Strata policies have exclusions for the cost of rectifying faulty or defective materials or workmanship, and relating to loss or damage caused by:
- non-rectification of insured property defects that you are aware of, or should reasonably be aware of;
- lack of maintenance or failure to maintain your insured property in a reasonable good state of repair;
This information is general in nature and does not constitute financial product or legal advice. References to policy terms and conditions are by way of summary only. For full details of policy terms, conditions, benefits and exclusions please refer to relevant the Product Disclosure Statement and Policy Wording, available from Strata Community Insurance.