Question: A main switchboard issue caused a power outage and short-circuited electrical appliances in some units. Are strata responsible for damages?
Recently, the power cable on the main switchboard came loose and overheated, causing a six hours power outage on the ground level and level 1 units. Multiple affected units reported that a few of their electrical appliances were short-circuited during the incident.
Some reported over $10,000 of damage and some only had minor damage. Is strata responsible for any damage that happened to the units on these two levels?
Answer: I recommend affected owners first check their contents insurance policies, as damage to appliances is typically covered under these policies.
Legal responsibility for damages in situations like this is typically determined by the courts based on the specific facts and circumstances surrounding the event. It is difficult to provide a definitive answer based on the information provided. Still, in general, the owners corporation (OC) may be held responsible if it can be demonstrated that the issue resulted from a failure to properly maintain or repair common property. Owners who believe the OC is liable need to submit a claim outlining their reasoning, for example, whether the OC was aware of any issues with the main switchboard and failed to act or if there was a lack of regular maintenance.
From an insurance perspective, I recommend affected owners first check their contents insurance policies, as damage to appliances is typically covered under these policies. If an owner’s insurer believes there is a valid claim against the OC, they may seek recovery against the OC. If the insurer is successful in recovering costs, the owner’s excess may also be refunded.
If a claim is made against the OC for damages, the OC’s Public Liability policy may respond, depending on the circumstances. The insurer will assess the claim and determine whether to defend or settle it. However, it is important to note that liability is not automatically accepted, and the insurer will only provide cover if they determine the OC was legally liable for the damage.
Given the potential complexity of this situation, affected owners may wish to seek independent legal advice to understand their options for recovery better.
This post appears in theApril 2025 edition of The NSW Strata Magazine.
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.
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