This article discusses how an NSW shut off valve installed by an owner affects (or does not affect) their levy liability when insurance excess is raised for common-property pipe damage.
Question: If a common property pipe bursts and causes damage, can I oppose a special levy for the insurance excess if I installed a shutoff valve to reduce that risk?
A burst water pipe caused damage, and the owners corporation accepted responsibility because the pipe was on common property. The owners corporation is raising a special levy on all lots to pay the insurance excess.
I install a valve or automatic shutoff device in my lot to prevent or minimise water damage from this type of incident. Can I rely on that risk-reduction step to oppose any special levy being charged to my lot when the excess is raised?
Is there anything in the legislation or case law that supports a lot owner arguing that they should not have to contribute to the excess (via a special levy) in these circumstances, or that the levy should be apportioned differently?
Answer: Installing your own shut-off valve is a great preventative measure, but it does NOT change the OC’s statutory responsibility for common property or the way contributions are shared.
If the water damage comes from a burst common-property pipe, the owners corporation (OC) is responsible for repairs under section 106 of the Strata Schemes Management Act 2015. The insurance excess forms part of the OC’s repair costs, and the OC can raise levies to cover those expenses.
Installing your own shut-off valve is a great preventative measure, but it does NOT change the OC’s statutory responsibility for common property or the way contributions are shared. Unless a registered by-law allows the OC to recover excess from a specific owner, or the owner caused the damage, the excess remains a shared cost paid by all owners according to unit entitlement.
You may vote against the special levy, but if it is validly passed, all lots (including yours) must contribute.
Recommendations:
Here are constructive steps that may help:
- If your building is prone to bursts, you may propose adding shut-off valves or pressure-limiting devices as a building-wide preventative measure.
- Ask for a review of insurance policy settings.
- Review the capital works fund plan
- If repeated bursts occur, the issue may relate to ageing plumbing, which should be reflected in future planning rather than relying on repeated special levies.
Abe Ayoubi W: Senior Strata Manager (NSW) E: abe.strata@gmail.com
This post appears in the February 2026 edition of The NSW Strata Magazine.
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