This article discusses strata legal fees insurance, examining whether lot owners can obtain cover for legal costs when disputing maintenance and repair failures by an owners corporation.
Question: Is there any insurance cover a lot owner can take out to cover legal fees when the owners corporation fails to adhere to their legal obligations to maintain and repair common property?
I am a lot owner in a strata scheme of 13 lots. I had to file an application with NCAT. The building insurance covered the legal costs for the owners corporation. As a lot owner, I had to pay all legal fees myself. This made the application process and multiple court hearings at NCAT impossible to afford.
The owners corporation did everything possible to drag the matter out, hoping I would give it up. Is there any insurance cover a lot owner can take out to cover legal fees when the owners corporation fails to adhere to their legal obligations to maintain and repair common property?
Answer: Legal expenses policies in the market provide cover for pursuing legal claims, but these policies are primarily designed for commercial businesses and may be cost-prohibitive.
An owners corporation insurance policy is designed to protect the primary interests of the owners corporation, but notwithstanding, it covers lot owners’ property in accordance with the act.
With this in mind, strata insurance does not cover claims made by lot owners against the owner’s corporation.
Legal expenses policies in the market provide cover for pursuing legal claims, but these policies are primarily designed for commercial businesses and may be cost-prohibitive.
NCAT is a jurisdiction where it is often assumed people self-represent and is less formal than other courts. If legal representation is cost prohibitive, self-representation may be a consideration depending on the type of claim made and how important the outcome is to you.
This post appears in Strata News #663.
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.