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.
This post appears in the April 2025 edition of The QLD Strata Magazine.
William Marquand Tower Body Corporate E: willmarquand@towerbodycorporate.com.au P: 07 5609 4924