Question: How can the owners corporation recover costs from an owner who repeatedly causes water damage to another lot?
An owner in our building has repeatedly allowed their bath to overflow, causing water damage to the ceiling of the apartment below.
We do not want to keep claiming on the owners corporation insurance because it may increase our excess and premiums.
Answer: The alternate course of action is for the owner of the damaged ceiling to seek compensation directly from the responsible lot owner.
There is no obligation for a strata corporation or a lot owner to make a claim on the strata insurance policy for damage caused by another lot owner’s actions. In fact, in cases where the issue is recurring or the claim value is relatively low, it may be more appropriate to pursue recovery directly from the responsible party to avoid potential impacts on the strata insurance premium or excess levels.
In this situation, where water damage has occurred to a ceiling due to a lot owner repeatedly allowing their bath to overflow, the alternate course of action is for the owner of the damaged ceiling (typically the lot owner below) to seek compensation directly from the responsible lot owner, instead of making an insurance claim.
The affected lot owner should write to the lot owner above, clearly setting out:
- The nature of the incident(s) – including dates and how the overflow is believed to have occurred.
- The extent of the damage – such as staining, plaster deterioration, or mould.
- The cost to repair – supported by invoices or quotes from contractors.
- Any other supporting evidence – including photos, witness accounts, or reports from plumbers or building professionals.
- A clear request for reimbursement of the repair costs.
This correspondence should also request a response by a specified date and make clear that, if no compensation is provided, the matter can be escalated to the NSW Civil and Administrative Tribunal (after a mediation process has occurred).
Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165
This post appears in the September 2025 edition of The NSW Strata Magazine.