Can a lot owner refuse to pay levies because they have taken out their own building insurance?

VIC

Levies & Finance

A new non-resident owner states that by taking out their own building insurance, they have fulfilled their requirements for insurance and are not required to pay levies. Is this correct?

I have recently taken on the self-management of our strata scheme of 19 semi-detached homes. A new non-resident owner states that by taking out their own building insurance, they have fulfilled their requirements for insurance and are not required to pay levies. Our previous owners corporation manager left us in debt, so the majority of our levy funds will have to go to the insurance renewal.

The new owner is adamant that everyone should take out their own insurance. Is this owner entitled to stop levy payments because he has arranged his own insurance?

The lot owner is still responsible for contributing to the owners corporation’s expenses, including insurance costs, even if they have their own insurance.

The lot owner cannot refuse or opt out of paying owners corporation fees or the insurance premium cost. Section 28 of the Owners Corporations Act 2006 ("Act") states that "The owners for the time being and any purchaser in possession of, and any person entitled to receive the rents and profits from, a lot are liable to pay any outstanding fees, charge, contribution or amount owing to the owners corporation in respect of that lot."

The simple answer to the query is that the lot owner is still responsible for contributing to the owners corporation's expenses, including insurance costs, even if they have their own insurance. Without a valid unanimous resolution to insure separately (which may not always be feasible and depends on the plan of subdivision), the lot owner is obliged to contribute towards the owners corporation's insurance policies, regardless of any additional insurance they may hold.

If the issue continues, the owners corporation may consider seeking further legal advice.