Question: My hot water system ruptured and caused damage to the kitchen cupboards. My landlord insurance says to contact the body corporate. My body corporate says it is a landlord insurance issue. Can you help?
I have an apartment in a Queensland body corporate. My hot water system, located in the kitchen cupboard, ruptured and leaked. I have landlord insurance, but the insurer says they are not responsible because the kitchen cupboards are part of the building, and they are not responsible for covering building issues. They suggested I refer the matter to the body corporate.
The body corporate says their insurance does not cover “kitchen, bathroom and bedroom cupboards”. I feel stuck. Can you help?
Answer: Various regulations apply to body corporates depending on which regulation module your scheme is registered under.
The definition of a building under a strata policy is generally worded along the lines of: Building means buildings as defined in the strata legislation applying where your building is situated. Permanent fixtures such as built in cabinetry are considered part of the building and only insurable under a strata policy.
A strata insurance policy can’t provide coverage for a building that does not meet the requirements of the applicable legislation. In Queensland, there are various regulations that apply to body corporates, depending on which regulation module your scheme is registered under. However, the intentions are all the same. I have referenced the Body Corporate and Community Management (Standard Module) Regulation 2020 as an example.
Part 6 Insurance – Act Section 1898 (195)
Part 6 Insurance – Act Section 1898 (195) defines a building as:
building includes improvements and fixtures forming part of the building, but does not include—
- temporary wall, floor and ceiling coverings; or
- fixtures removable by a lessee or tenant at the end of a lease or tenancy; or
- mobile or fixed air-conditioning units servicing a particular lot; or
- curtains, blinds or other internal window coverings; or
- carpet; or
- mobile dishwashers, clothes dryers or other electrical or gas appliances not wired or plumbed in.
The above list of excluded items does not include built in cabinetry. Therefore, the act requires it to be insured as part of the building under the strata
insurance.
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.
This post appears in the December 2024 edition of The QLD Strata Magazine.
Hi Andrew
There are a few things to understand:
1. The BCCM Act state that “For an event affecting only 1 lot, the owner of the lot is liable to pay the excess unless the body corporate decides it is unreasonable in all the circumstances for the owner to bear the
liability.”
2. Insurance policies are for replacement value only (like for like);
3. if the repairs to your dishwasher are not an insurance claim (i.e. maintenance) you are responsible for maintaining all items that form part of your lot.
Tyrone
Hi Andrew.
I have responded to your question in the above article.
Interesting, 3 aspects here to this dilemma ?
1 does that mean dishwasher forms part of entire building insured value? And thus insured only under building damage (and warranty?). That means when the dishwasher is retired that Body Corp sinking fund levies must replace with same model? Well, that many be difficult many years on.. So is a replacement model and value bylaw required here?
Or
2 Does lot owner have contents insurance as you suggest that covers all fixtures and fittings, and body corporate insurance only looks after all common property assets which includes roofing over all lots, lifts and fire doors, AND utility services to each lot as are common property access services like sewerage, water, power and tv?
3 So is the BCCM act here is at fault for not thinking through the practicalities of said dishwater et al?
I guess the thing to ask is, should the rest of the owners help pay for my dishwasher or at least the Excess on the insurance if claimable.
What if I insist my dishwasher has to be a $4,000 smeg and the person in the unit next door only has a $300 westinghouse.
Would the OC cover only up to $300 value?