This QLD article is about insurance increases due to building defects such as cladding.
Table of Contents:
- QUESTION: When repairing waterproofing failures in an older building, must works comply with current building codes? How does this affect strata insurance expectations?
- QUESTION: How can lot owners be certain the committee informed the insurer of all known structural damage before the renewal? Is the strata manager responsible for ensuring the insurer is fully informed?
- QUESTION: Regarding cladding on QLD strata buildings, what is the compliance if a building was constructed in 1980?
Question: When repairing waterproofing failures in an older building, must works comply with current building codes? How does this affect strata insurance expectations?
Our building was constructed in 1992 and is assumed to have been built to the code of the time. Over the years, there have been multiple instances of waterproofing failures, including those involving flashing around roof penetrations. Would a strata insurance company expect repairs to fix the waterproofing or to bring the property up to current code?
Answer: Insurers expect the body corporate to seek professional advice on how to resolve issues and to implement those measures.
There are a number of considerations that insurers take into account when looking at building defects or maintenance issues. While your building may have been constructed to the building code applicable at the time (1992), this does not mean issues cannot arise subsequently that increase the risk profile of the building. Insurers generally expect that where problems develop, such as water ingress or flashing failures, the body corporate will take appropriate action to rectify them.
Depending on the severity of the leaks, insurers may require a report from a suitably qualified building professional, such as an engineer, outlining the cause of the problem and recommendations for repair. If such a report is obtained, the insurer will normally expect the body corporate to act on those recommendations in a timely manner.
As a general principle, if new leaks or defects emerge, insurers expect the body corporate to seek professional advice on how to resolve them and to implement those measures. Provided the body corporate follows the recommendations of the appointed professional, insurers will not usually require works to bring the building up to current codes, unless that is specifically what the professional has recommended.
Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
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 Strata News #762.
Question: How can lot owners be certain the committee informed the insurer of all known structural damage before the renewal? Is the strata manager responsible for ensuring the insurer is fully informed?
At insurance renewal time, how can lot owners be confident all information is disclosed? What are the committee’s obligations on behalf of the body corporate to ensure the building insurer is informed of known structural defects?
The scheme has timber rot, water ingress and termite damage. These issues are outlined in various reports. The insurer also requested that maintenance, as described in a structural report, be completed before renewing the next policy. At a recent AGM, the body corporate passed motions to do some of the work. However, most of the needed repairs were not on the agenda. Lot owners were unable to put forward motions as the deadline had passed.
Will the insurance policy be renewed or will lot owners face a massive premium increase? As the body corporate manager receives an insurance commission, what is their role in ensuring the insurer is fully informed? What can lot owners do to ensure insurance policy requirements are adhered to?
Answer: The committee and manager undertake a duty of care to lot owners and they are bound by codes of conduct.
All owners are entitled to access body corporate records. If you want to see the details of what has been presented to the insurer, ask for that. If the body corporate is not forthcoming in providing you with this information, you can arrange a search of the books and records and the information should be there. If necessary, you could contact the broker or insurer for your scheme and ask them what information has been provided.
The rest of your questions are more complicated as, essentially, you are asking what to do when you don’t trust the body corporate committee or manager. That’s hard because they are the delegated and appointed parties responsible for your scheme and will play a major role in resolving any issues at your site.
In undertaking those roles, the committee and manager also undertake a duty of care to lot owners. They are bound by codes of conduct. And, insurance policies require that accurate declarations be made. In theory, there are safety rails to ensure the right steps are taken, but in practice, these rails offer no guarantee this is happening.
There may be a reasonable plan in place. Maybe detailed communications are missing on how this works. You could write to the body corporate stating your concerns and asking for communication to all owners that details how the issues will be resolved. For what it is worth, the first step towards resolution would often be expert reports on what needs to be done, which it seems your scheme has undertaken.
However, you may need to escalate if you think the matter is not being taken seriously. You could issue the committee with a motion to force votes on the repairs. If you have enough concerned owners (25 %), you could requisition an EGM. You could seek legal assistance or maybe you could go to the commissioner’s office to seek orders on the matter.
From the outside, we can’t say the best options but you may need to start demanding or forcing some action to get others to show urgency.
William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924
This post appears in the April 2025 edition of The QLD Strata Magazine.
Question: What’s been happening with cladding in Queensland body corporate buildings?
Answer: Yes, the QBCC is out there enforcing orders.
The three stages of the cladding process had deadlines. Those deadlines have passed and the QBCC is going out, somewhat surprisingly, and enforcing those deadlines. We’ve had situations where summons are issued against bodies corporate and owners of buildings. The QBCC has been issuing fines because bodies corporate haven’t done what they were supposed to do.
Body corporate managers who were on the ball really actively managed the repairs knowing this was a big risk and they protected their clients. Well done to all those who have gone through the process and finished, and this was probably due to the professionalism of those body corporate managers. So, yes, the QBCC is out there enforcing orders.
Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753
This post appears in Strata News #642.
Question: Regarding cladding on QLD strata buildings, what is the compliance if a building was constructed in 1980?
Answer: The rationale for the cladding laws was that this type of cladding appeared in the mid 90’s or so – which is why buildings built before then don’t need to worry about it unless they went and did something to their building needing a development approval after 1994.
Frank Higginson
Hynes Legal
E: [email protected]
P: 07 3193 0500
This post appears in Strata News #587.
Read Next:
- Safer Buildings: understanding the combustible cladding legislation
- Q&A Can non-fire rated Aluminium Composite Panels comply with National Construction Code
- Strata Finance: The guide for Owners Corporations
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