NSW: Can a two-lot strata have separate building insurance?

Question: Can individual lots on a 2-lot strata have individual building insurance if the buildings are not physically detached?

Answer: The owners corporation must insure the building as a whole.

Based on the Strata Schemes Management Act 2015, owners in a two-lot strata scheme generally require the owners corporation to insure the building. However, there is an exemption under certain conditions:

4. This section does not apply to an owners corporation for a strata scheme comprising 2 lots if—
   
   1. the owners corporation so determines by unanimous resolution, and
   2. the buildings comprised in one of those lots are physically detached from the buildings comprised in the other lot, and
   3. no building or part of a building in the strata scheme is situated outside those lots.

Given the information provided that the two-lot scheme’s buildings are not physically detached, the exemption does not apply. Therefore, individual lots in this scenario cannot have separate building insurance policies; the owners corporation must insure the building as a whole.

This post appears in the September 2024 edition of The NSW Strata Magazine.

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.