This article answers the question Why should I pay for damage to another person’s property?
Question: An owner who experienced water damage to their lot expects all owners to contribute to repairs. Why should I pay for damage to another person’s property?
In our body corporate, we are all on individual lots and appear to own the land allocated to lots under the survey plan. We do not share common walls but have an insurance policy in common. I believe we are governed by the standard format. Can we opt out of an insurance policy in common, where each owner is responsible for their insurance, and the body corporate is responsible for common property insurance?
An owner suffered damage to their roof and interior water damage. Due to high excess, an insurance claim may not be feasible. The owner expects all lot owners to contribute to repairs if the insurance claim does not proceed. I cannot understand why I should pay for damage to another person’s property.
Answer: If the damage appears to affect only one lot, the body corporate is not automatically responsible for contributing to the repairs unless it decides otherwise.
Based on the details provided, it appears that the scheme is governed under the standard format plan (SFP), which generally requires the body corporate to insure buildings when they share a common wall.
However, where there are no shared walls, and each lot is freestanding, lot owners may be able to opt out of the body corporate’s building insurance, with each owner responsible for their building insurance and the body corporate responsible for insuring the common property.
Regarding the roof and interior water damage to one unit, if a claim under the body corporate insurance is not feasible due to high excess, the lot owner is typically responsible for covering the cost of repairs to their lot.
If there was a claim, as per Section 197 of the Body Corporate and Community Management (Standard Module) Regulation 2020, when an insurance claim is made for damage affecting only one lot, the owner of that lot is responsible for the excess, unless the body corporate determines it is reasonable to cover the excess in the circumstances.
In this instance, as the damage appears to affect only one lot, the body corporate is not automatically responsible for contributing to the repairs unless it decides otherwise. If the insurance claim does not proceed, the affected lot owner would generally be responsible for the full cost of repairs.
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 March 2025 edition of The QLD Strata Magazine.
Have a question or something to add to the article? Leave a comment below.
Read next:
- QLD: Essential water ingress tips for strata properties
- QLD: Damage to property – Section 281
- QLD: Q&A Who is responsible for cleaning solar panels on a townhouse roof?
Visit Maintenance and Common Property OR Strata Legislation QLD.
Looking for strata information concerning your state? For state-specific strata information, take a look here.
After a free PDF of this article? Log into your existing LookUpStrata Account to download the printable file. Not a member? Simple – join for free on our Registration page.
Leave a Reply