Question: A townhouse has a hot water leak under the foundation slab. If the leaking pipe is the owner’s responsibility, can they submit an insurance claim to cover the cost of repairs?
There is a hot water leak under the slab inside one of the townhouses in our four-lot complex. The pipe with the leak is not common property, but deep under the slab.
Who is responsible? If this is the owner’s responsibility, can they lodge an insurance claim?
Answer: If the pipe exclusively services the lot and is within the lot’s boundaries, it is typically the lot owner’s responsibility to maintain.
The question of who is responsible for a burst pipe in NSW is best directed to the strata manager. However, as a general rule, if the pipe exclusively services the lot and is within the lot’s boundaries, it is typically the lot owner’s responsibility to maintain.
From an insurance perspective, a lot owner can make a claim on the strata insurance policy. That said, in the vast majority of cases, burst pipes are not covered due to common policy exclusions. These exclusions often include issues such as lack of maintenance, rust, oxidation, wear and tear, corrosion, gradual deterioration, developing flaws, building defects, or rectification of faulty workmanship.
If the cause of the burst pipe is excluded, most strata insurance policies will not cover the cost of locating and fixing the leak. This includes accessing the pipe through the slab and restoring the slab after repairs.
However, the strata insurance policy may provide cover for consequential water damage caused by the burst pipe (e.g., damage to walls, floors, or other property resulting from the leak).
For clarity, I recommend discussing this matter with the strata manager and speaking with your insurance adviser or reviewing the specific strata policy to confirm the extent of cover.
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.