QLD: Unmaintained shower caused hallway damage — who pays, and how is the insurance claim handled?

Question: Lack of maintenance to a shower caused damaged to a hallway. Is the owner responsible for the repairs to common property? How is the insurance claim handled?

An owner of a unit ignored obvious grout issues in their shower. The shower is on the same wall as the hallway and the skirting in the hallway began to rot and crumble. 3 months ago, the cause of the leak and damage was established as the unsealed shower but the owner still hasn’t carried out any repairs. The skirting damage continues to spread.

After watching this webinar with Tyrone Shandiman I have a few questions: Water Damage Insurance Claims.

Does the body corporate send the bill for the resulting repairs to the common property to the owner? Is it up to the owner to decide if they want to lodge a claim under the building insurance?

Answer: There are 2 options available to the body corporate.

If the body corporate believes the owner is responsible for the damage and does not want to cover costs associated with the owners failure to fix the known issues, there are 2 options available to the body corporate:

1. Letter of Demand to Owner: If due to the owners failure to maintain their property in good condition, common property has been damaged, the body corporate can send a letter of demand to the owner. The owner will then have the option to lodge a public liability claim on their contents insurance or a strata insurance claim.
2. Lodge a claim on strata insurance – it should be noted that:
   
   1. The insurer may apply exclusions associated with failure to rectify know building defects, errors or omissions – likewise damage must be from a “sudden and accidental” event.
   2. The owner should be liable for the excess.
   3. The leak would be required to be fixed (with evidence such as a repair invoice confirming this) before the insurer considers cover for the consequential damage.

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.