Question: Who is responsible for cost of repairs to damage caused by a burst or leaking pipe behind a shower wall in a lot?
If there is a burst or leaking pipe behind a shower wall in a lot and any resulting damage only affects that lot, is this the unit owner’s responsibility under their own insurance because the pipe work is entirely within the lot and services only that lot.
If the leak also causes damage to common property, is the owner responsible to repair the common property under their own insurance? Or if the common property is repairable under body corporate insurance, is the owner responsible for paying the body corporate excess?
Where it is found that the leak only affects that lot, is the owner responsible for paying for the investigative work to locate the source of the leak? And is the owner responsible for all repairs unless it can be confirmed that the failing in the waterproofing membrane caused the leak?
Answer: There is a strata insurance policy that the owner has an insurable interest in and they can make a claim.
It is a common misconception in insurance that you need to understand firstly the difference between the duty to maintain and the duty to insure common property and what is and isn’t covered by insurance. An owner is responsible to maintain everything inside their lot, and possibly if there is damage that occurs from that, then legally they may be responsible for that damage. But you need to look at the fact that there is a strata insurance policy that the owner has an insurable interest in and can make a claim.
So what would the strata insurance policy pay for? Keep in mind, anything that is a permanent fixture inside a lot is insured by strata insurance. It cannot be insured under any other policy, including contents. In this instance, if the pipe in that lot solely services the lot and is inside the boundaries of the lot, it is the owner’s responsibility to maintain that pipe and the pipe itself won’t be covered by strata insurance.
Also, in the majority of cases, the exploratory costs associated with finding the pipe won’t be covered by insurance. But the consequential water damage that comes from that claim, will be covered by strata insurance as will the damage to other property as well.
Allow the owner to make a claim under insurance (I mentioned earlier that they do have an insurable interest in the policy so they can claim under the insurance) and anything that’s not covered by insurance should be considered the lot owner’s responsibility unless the property is owned by the body corporate.
Tyrone Shandiman
Strata Insurance Solutions
E: tshandiman@iaa.net.au
P: 07 3899 5129
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.
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