This question about responsibility for insurance within the area under an occupation authority has been submitted by a Queensland lot owner.
Question: Our caretaker has an occupation authority that grants exclusive use of a structure on common property. Who is responsible for the insurance of this area?
Our caretaker has an occupation authority that grants exclusive use of a structure on common property. The contract clearly states the wording of exclusive use of the occupation authority areas.
The dictionary in the contract states that common property is defined in the Act and is located on the common property but excludes any part of the common property in respect to which any person has a lease or exclusive use.
Is the caretaker or the body corporate responsible for the insurance within this occupation authority?
Answer: The key issue in determining responsibility for insurance within the area under an occupation authority depends on the specific terms of the occupation authority and the contract.
From an insurance perspective, the body corporate is required to maintain public liability insurance for the ownership and management of common property, including any property owned by the body corporate but used under an occupation authority. This is mandated by the Body Corporate & Community Management Act 1997.
The key issue in determining responsibility for insurance within the area under an occupation authority depends on the specific terms of the occupation authority and the contract. Since the contract grants the caretaker exclusive use of the structure on common property, the caretaker may be considered to have a degree of control over that area. As a result, the caretaker should also carry public liability insurance to cover any incidents or claims arising from their use of the area.
In the event of a claim, legal liability is determined by solicitors and judges based on the circumstances of the incident. Both the body corporate and the caretaker could potentially be drawn into a claim, similar to how both a property owner and tenant might be involved in claims related to leased property.
Therefore, it is advisable that both the body corporate and the caretaker hold their own public liability insurance. This way, either party can refer any claims to their respective insurers, minimising the risk of financial exposure.
Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.
This post appears in the September 2024 edition of The QLD Strata Magazine.
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Read next:
- QLD: Q&A Management Rights – Caretaking and Letting Agreement + Extensions
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