Question: Our committee suffered damage to common property due to faulty workmanship. Should the strata manager and committee instigate an insurance claim before recouping cost of repairs from lot owners?
Our Strata Manager and Committee approved a person unknown to the Owners Corporation to carry out a $90,000 Major Capital Works Job to replace 12 large Planter Boxes and a 300 sq meter courtyard. The contractor didn’t construct the stormwater runoff correctly and in a recent storm a unit was flooded.
The Strata Manager and Strata Committee then appointed a plumbing company the $30,000 job to remediate the tradesman’s mistake. They held an EGM stating all owners needed to contribute to the $30,000 invoice. There has been no mention of claiming the cost of the repair work against our strata insurance.
What were the options available to the Strata Manager and Committee? Are they required to pursue insurance claims before passing costs onto Owners?
Answer: In this instance an insurance claim would not be a viable option.
Strata insurance covers “sudden and accidental damage” and all policies I am aware of exclude costs associated with rectification of faulty workmanship.
In this instance an insurance claim would not be a viable option as the repair works are associated with rectifying faulty workmanship.
The committee may seek to obtain legal advice in relation to whether a claim may be made against the original contractor who installed the planter boxes.
This post appears in the April 2022 edition of The NSW Strata Magazine.
Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 07 3899 5129
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.