This Q&A article is about the insurance implications around lot owners gardening and maintaining common property.
Table of Contents:
- QUESTION: One of our lot owners sometimes mows the lawn in front of their unit. If they hurt themselves while mowing and gardening on either their lot or common property, could they sue strata?
- QUESTION: Are there any Strata laws that stop me from doing work in the garden or in a common area if I have approval from the executive committee?
- QUESTION: A lot owner suggests he is paid to carry out caretaker duties. He does not have a business name or insurance. Can he be paid? What are the insurance implications for the strata scheme in case of injury?
Question: One of our lot owners sometimes mows the lawn in front of their unit. If they hurt themselves while mowing and gardening on either their lot or common property, could they sue strata?
Answer: There can be a number of factors that can change the outcome of any liability claim.
Liability claims are considered on a case by case scenario by insurers, solicitors & judges (if the claim ends up in court) and for this reason, it is not possible to give a “one size fits all” answer to a hypothetical scenario as there can be a number of factors that can change the outcome of any liability claim.
If the grass is on their lot, there are low prospects of a successful claim as it is not common area property.
If the grass is on common property, you may be drawn into a claim if the lot owner can demonstrate negligence by the strata.
Some strata policies have a “voluntary workers” cover which is designed to cover prescribed injuries paying a specific amount for the events listed in the policy (for example disablement, loss of sight) for a volunteer. Volunteers are generally considered to be persons engaged for work solely on behalf of the strata without the promise of reward or remuneration .
I trust this assists.
Question: Are there any Strata laws that stop me from doing work in the garden or in a common area if I have approval from the executive committee?
Can I garden on the Common Property? I would like to do things like trim the edges of the garden, clean up the dead leaves etc, all normal garden duties. Are there any Strata laws that stop me from doing work in the garden or in a common area if I have approval from the executive committee?
Is doing the gardening against Strata Laws for common property?
Answer: If minuted by the executive committee – go beautify and enjoy!
Karina Heinz: That’s an easy one – no.
It is common property, so you do need approval.
The committee is charged with administering the common areas unless there is a legislative or EGM resolution preventing them on a particular point. So, if minuted by them – go beautify and enjoy!
Tyrone Shandiman: From an insurance perspective, policies do not contain exclusions for volunteers working on common property – in fact, they support voluntary work.
A strata insurance policy may provide cover for volunteers in two ways (subject to the policy terms conditions and exclusions):
- Public Liability sections in some policies extend to cover volunteers engaged solely in work or duties on behalf of the owners corporation and without reward or remuneration for personal injury or property damage they become legally liable for;
- Strata policies may also contain a Voluntary Workers section which is designed to cover listed injuries and death.
Owners corporations should seek advice from their insurance adviser about cover applicable under their specific policy.
It is recommended that prospective volunteers get written agreement from their owners corporation so that they can show documented evidence of agreement for volunteering to work on common property.
This post appears in Strata News #333.
Question: A lot owner suggests he is paid to carry out caretaker duties. He does not have a business name or insurance. Can he be paid? What are the insurance implications for the strata scheme in case of injury?
I live in a small (3 units) self managed strata building.
One of the lot owners has suggested he is paid for maintaining some common property around the building. This would be very basic caretaker duties.
He does not have a business name or insurance. Is he able to be paid for this “work”? What are the insurance implications for the strata scheme in case of injury?
Answer: The main consideration would be the level of cover provided by the strata insurance policy.
Strata insurance policies do not place restrictions on who the owners corporation can engage for maintenance of their property. So to answer the writer’s specific enquiry, yes, the owner is able to be paid for work.
The main consideration for the owners corporation, however, should be the level of cover provided by the strata insurance policy. We will write our response on the basis the owner is not an employee of the owners corporation, but instead is contracting their work to the owners corporation.
All insurance policies will vary to some degree and as always should be read individually. However, despite individual wording differences, most strata insurance policy wordings will contain an extension in the public liability section of the policy which is intended to provide cover for voluntary workers. Voluntary Worker does not in the basic interpretation mean employees, contractors or any person who receives payment, reward or remuneration for their services. Due to this, Strata policies generally will not extend to provide any cover for owners who undertake paid work for the body corporate.
The first consideration is injury or property damage caused by the owner to other parties. In the event the owner injures or causes property damage to another party, the policy would not extend to cover claims for compensation made against the owner as they are not deemed to be a volunteer and they are therefore not insured by the policy. In order for the owner to have cover, they would need to take out a separate public liability insurance policy. Where the owners corporation are drawn into claims due to the actions of the owner, the policy will respond to cover the interests of the owners corporation only and it should be noted that both the owners corporation and the owner conducting the work can be held jointly liable in the event of a claim – for example, the owner could have a 70% contribution & the owners corporation a 30% contribution to compensation.
Secondly, consideration should be placed on injury the owner sustains while conducting work for the owners corporation. The public liability section of a strata insurance policy is designed to cover the owners corporation where they become legally responsible to pay compensation for personal injury or property damage. While there is no specific exclusion for claims made against the owners corporation for owners who are paid for their work (provided they are not an employee), the insurer will assess the owners corporation responsibility/negligence at the time of a claim. For example, the owner decides to clear gutters and erects a ladder at no direction of the owners corporation and the owner sustains injury from falling off the ladder. While the question of legal responsibility is best answers by legal professionals, the insurer may decide there are grounds to defend the claim as the owners corporation did not instruct the owner to use the ladder and therefore they were not negligent. If the insurer is successful in defending the claim the owner could be left to manage the financial impact of a major injury without grounds for compensation.
Strata insurance policies have a separate Voluntary Workers cover in their policy which is designed to provide payments for death and specific injuries for volunteers while that are engaged solely in work or duties on behalf of owners corporation. This cover is event based and does not have a specific requirement of the owners corporation being negligent for the injury. This cover is not available for owners who are paid for the work they do and the equivalent cover for owners conducting paid work would be a personal accident insurance policy.
While there is no specific requirement placed on the owners corporation or owner to take out insurance, we recommend consideration is placed into public liability and personal accident insurance specifically for instances where the owner is engaged in paid work.
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 Advisernet Australia AFSL No 240549, ABN 15 003 886 687.
This post appears in Strata News #313.
If you have a question or something to add to the article, leave a comment below.
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