QLD: Q&A Who Pays for Repairs due to Common Property Defects Like a Leak?

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QLD Lot owner’s are wondering about who pays the excess on a Body Corporate insurance claim.

Table of Contents:

• QUESTION: We recently had a leak at out rental unit on the Gold Coast. We have been sent the invoice for payment with a detailed description from the plumber. Is this really our responsibility?
• QUESTION: Water ingress to a lower unit in our complex has occurred. The owner of the unit that has suffered water ingression wants to make a claim on the body corporate for loss of rent. Is our body corporate liable?
• QUESTION: Some residents are having problems with leaking roofs. Who is responsible for fixing the problem?
• QUESTION: I had a leak in the roof which was repaired, but I am wondering who is required to pay for the damage in the internal ceiling? I’m looking for an example where no insurance claim would exist.
• QUESTION: For a garage door that services only one lot, is it the body corporate or the lot owner who is responsible for any insurance excess related to a repair of the garage door?
• QUESTION: Storm damage has resulted in a water stain on my ceiling. The Body Corporate has advised me that I can claim through the Body Corporate insurance to have the ceiling repainted but I’m responsible for the excess.
• QUESTION: After my hot water system was repaired by a plumber, a connection blew and both my unit and the unit downstairs suffered water damage. Am I liable for the Body Corporate insurance excess?
• QUESTION: I’ve had a pipe leak in the bathroom leaving extensive damage that was covered by Body Corporate insurance. Who pays the water damage excess?

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Question: We recently had a leak at out rental unit on the Gold Coast. We have been sent the invoice for payment with a detailed description from the plumber. Is this really our responsibility?

We received an account from the plumber who attended our rental unit in a complex on the Gold coast in QLD recently. 

His account read: “Isolated water supply to unit and found the main isolation gate valve faulty. Isolated mains water supply to the entire complex. Removed faulty gate valve, supplied and installed new gate valve. Reinstated water supply..” 

Who is responsible for this? Is the repair our responsibility or should the body corporate pay?

Answer: Determining responsibility for a repair isn’t always straightforward

Determining responsibility for a repair isn’t always straightforward and in this instance the information provided probably isn’t sufficient in and of itself to make a final determination, albeit the description is a helpful part of the puzzle.

Without knowing any specific details of the scheme, you would have to consider factors such as the format, where the work took place, why the work was conducted and whether there were any specific by-laws in place that may affect responsibility.

Your body corporate manager would have these additional details and should be able to provide you with a rationale for how they would apportion responsibility.

Speaking more generally, plumbing issues tend to be some of the more difficult responsibility decisions to make. Broadly, plumbing works that service more than one lot would be considered Body Corporate responsibility while those that service one lot only, even if located on the common property, are the responsibility of the individual lot owner. However, that is only a starting point before considering all factors.

The Queensland Government website has some good general advice on repairs: Body corporate maintenance: Queensland Government – Body corporate maintenance

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in Strata News #466.

Question: Water ingress to a lower unit in our complex has occurred. The owner of the unit that has suffered water ingression wants to make a claim on the body corporate for loss of rent. Is our body corporate liable?

Water ingress to a lower unit in our complex has occurred.

It has been inspected by an engineer and a full report submitted. The bottom line is that the patio tiles on the two units above need to be removed and re tiled after the new waterproofing seal is installed.

In addition, flashing on the roof has been identified also as a possible cause. The body corporate has made arrangements for repairs to be carried out by qualified contractors.

In the meantime, the owner of the unit that has suffered water ingression wants to make a claim on the body corporate for loss of rent.

It is unknown whether or not he has Landlord and Tenant insurance on the property in question.

Is our body corporate liable for the loss of rental income for the involved unit.

Answer: Owners will have loss of rent cover that can be considered on two policies – Landlords Content Insurance & Strata Insurance.

Owners will have loss of rent cover that can be considered on two policies – Landlords Content Insurance & Strata Insurance.

Loss of rent cover under Landlords Contents Insurance is only considered when the contents insured by the policy is damaged and this causes the property to be uninhabitable. For example carpet damage is generally considered to be contents (not covered by strata) so the Landlords contents insurance is the policy that should cover loss of rent associated with damage to carpet.

Loss of rent under a strata building applies when property insured by the policy (i.e. Building) is damaged by a claimable event and the property is uninhabitable. In the case of water damage stated below if the damage is to ceilings and walls, the strata insurance policy is the policy that should be considered for loss of rent claims.

In the event of a claim that involves contents & building, insurers generally share rental costs which is an agreement by insurers after assessing the facts.

The body corporate has a responsibility to arrange an insurance policy and most policies will cover loss of rent – we recommend a claim is referred to the strata insurer and provided the loss of rent event is claimable the strata insurer will be liable for the costs (not the body corporate).

If the loss of rent is not covered, the body corporate is generally liable in the event of negligence, in which case, further consideration should be placed on referring a claim to the public liability section of the strata insurance policy.

Tyrone Shandiman
Strata Insurance Solutions
T: 07 3899 5129
E: [email protected]

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. This information is designed as a basic guide with relation to cover and you should refer to your Policy Schedule and Product Disclosure Statement for all terms and conditions related to cover under any insurance policy. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in the February 2021 edition of The QLD Strata Magazine.

Question: Some residents are having problems with leaking roofs. Who is responsible for fixing the problem?

We live in a complex of 56 townhouses and villas. Some residents are having problems with leaking roofs (they are colourbond) where they butt up to the firewalls. This is caused by two things.

1. The firewalls (which are not between every dwelling) extend above the roofline and are allowing water to penetrate at the top and sides of the wall due to deterioration from age (25 years old) and;
2. The flashing that abuts the firewalls (it is also colourbond) of the affected roofs is lifting. Once again due to age and the elements.

The water is seeping down the walls into the affected dwellings causing water damage and mould.

Who is responsible for fixing the problem. It is not covered by the owner’s insurance policy and the Body Corporate are saying it is not their problem either. Our insurer’s say that it is the responsibility of the Body Corporate. Who is right?

Answer: This is always based upon the particular circumstances of the building in question.

Tyrone Shandiman

From a coverage perspective, water damage claims are our most disputed claims as there is often a component that is maintenance and consequential water damage. Long term water damage spanning over many years or not is a common point of contention for insurers. Each water damage claim poses a different set of circumstances and are therefore considered on a case by case basis.

It is not the insurer’s responsibility to advise who is responsible to maintain property for damage not covered by an insurance claim. It follows the body corporate is responsible for determining responsibility in accordance with building plans and applicable strata legislation (Such as section 159 Body Corporate and Community Management (Standard Module) Regulation 2008).

Chris Irons

I know that people always prefer a definitive, clear-cut answer to the question of ‘who is responsible?’ in a body corporate context. The reality is that such an answer is rarely, if ever, that self-evident. It is always based upon the particular circumstances, the building in question, its plan of subdivision and myriad other factors including the advice of experts. Disputes about responsibility for maintenance are usually the most disputed-above matters in the Commissioner’s Office.

If the body corporate state it is not their responsibility then one presumes they have an expert basis on which to say that, e.g., a report. If so then you should be able to see that and then assess if you agree. If you don’t, the onus is on you to evidence otherwise. That may mean getting a quote or obtaining your own expert advice. Ultimately if your positions remain opposed you may need to enter into dispute resolution.

Given that each situation is different, one way to get a guide is to research adjudicators’ orders on the topic. You can search them at Australasian Legal Information Institute and see if there are any which are consistent with your particular circumstances.

Tyrone Shandiman
Strata Insurance Solutions
T: 07 3899 5129
E: [email protected]

Chris Irons
E: [email protected]
P: 07 3193 0500
W: Hynes Legal

This post appears in Strata News #392.

Question: I had a leak in the roof which was repaired, but I am wondering who is required to pay for the damage in the internal ceiling? I’m looking for an example where no insurance claim would exist.

My unit is one of 4 under a small lots module.

I had a leak in the roof which was repaired, but I am wondering who is required to pay for the damage in the internal area resulting from the water ingress. The ceiling is the area with the remaining damage.

I’m looking for an example where no insurance claim would exist.

Wouldn’t section 281 of the BC Act suggest that if a BC as a maintenance issue or lack of it, such as the roof leak that damaged the inside unit, wouldn’t the BC also be responsible for the internal damage. Why would that become a unit owners issue where a building format plan exists.

I don’t understand why the BC responsibility would be limited to the roof fix as the boundary. The roof leak caused internal damage. This scenario is also under a BC in the small lots module in QLD.

Is this a BC responsibility or lot owners?

Answer: You’d need to firstly demonstrate the body corporate had failed in responsibility to maintain common property.

You’d need to firstly demonstrate the body corporate had failed in responsibility to maintain common property. That is no easy task and is rarely as straightforward as it sounds. You need evidence to back up any assertions – it’s not enough to simply say “it’s body corporate responsibility” and leave it at that.

With that in mind, generally speaking yes, the body corporate is responsible for maintaining common property and it follows that if they haven’t maintained then they can be responsible for resultant damage. An adjudicator can order either that repairs get carried out or that a payment be made to for reimbursement to the applicant for repairs they carried out, under section 281. There are monetary caps in either case.

You say you are ‘looking for an example’. You can research for examples – there are several – of this kind of thing on the Australasian Legal Information Institute.

A quick note on the term ‘damages’ – there’s no capacity for an adjudicator to make an order in relation to something such as loss of rent in an investment lot or ‘damages’ for loss of income. Those will require legal proceedings. The adjudicator’s power is limited to repairs.

Chris Irons
E: [email protected]
P: 07 3193 0500
W: Hynes Legal

This post appears in Strata News #357.

Question: For a garage door that services only one lot, is it the body corporate or the lot owner who is responsible for any insurance excess related to a repair of the garage door?

Our garage door is on a boundary separating the lot from common property. If it’s the Body Corporate’s responsibility to maintain the garage door, whose responsible for the payment of any insurance excess related to a repair of the garage door? In this instance, the garage door services only the lot so is it the Body Corporate or the Lot owner who pays the excess?

Answer: 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.

Working under the assumption your body corporate is a “Standard Module” Section 184 of The Body Corporate and Community Management (Standard Module) Regulation 2008 would apply.

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.

Tyrone Shandiman
Strata Insurance Solutions
T: 07 3899 5129
E: [email protected]

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. This information is designed as a basic guide with relation to cover and you should refer to your Policy Schedule and Product Disclosure Statement for all terms and conditions related to cover under any insurance policy. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in Strata News #341.

Question: Storm damage has resulted in a water stain on my ceiling. The Body Corporate has advised me that I can claim through the Body Corporate insurance to have the ceiling repainted but I’m responsible for the excess.

I have recently had storm damage resulting in a water stain on my ceiling.

The Body Corporate has been advised and has repaired the roof and guttering. It has advised me that I can claim through the Body Corporate insurance to have the ceiling repainted but I would be personally responsible for the excess.

Is this correct? Because they have taken responsibility for the roof repair but not the resulting interior damage I thought they would pay the excess?

Answer: The legislation is pretty clear about the liability for the excess and if it’s only for your lot, it’s your responsibility.

Section 184 of the Standard Module (equivalent provisions of the other Modules) provides for excess. The key provisions are subsections (3) and (4). Subsection (3) provides 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’.

The section gives an example immediately afterwards to illustrate this further, which provides some guidance on these concepts. Examples in legislation are exactly that – examples. Not literal gospel. What is ‘reasonable’ and thus, ‘unreasonable’, will always depend upon the particular circumstances.

To look at this another way: the legislation is pretty clear about the liability for the excess and if it’s only for your lot, it’s your responsibility, but if you feel it’s unreasonable to do so you can ask the body corporate to reconsider the liability for the excess. That might happen by writing to the committee or if necessary, putting a motion to a general meeting.

Either way, the responsibility will be on you to demonstrate why you shouldn’t pay the excess, and based on your particular circumstances.

This post appears in Strata News #329.

Chris Irons
E: chris[email protected]
P: 07 3193 0500
W: Hynes Legal

Question: After my hot water system was repaired by a plumber, a connection blew and both my unit and the unit downstairs suffered water damage. Am I liable for the Body Corporate insurance excess?

My hot-water system was replaced by the building’s preferred plumber. After he completed the works and left, a connection blew and water flooded my unit. There was damage to carpets, furniture, curtains etc that is being covered by my contents insurance. There is also some damage to built-in shelving and bubbling/flaking of wall paint. Water also caused some damage to the unit below mine. I don’t know what the value of this damage is.

The BC Manager has advised that if I submit a claim to the Body Corporate’s insurer, I will be required to pay the Body Corporate insurance excess of $2,500, as the cause of the damage to other property originated in my lot. I will be advised in due course whether the claim has been processed once the claim form is submitted and whether the Body Corporate insurance excess is, in fact, payable.

It seems to me the damage was caused by the plumber’s actions, either due to negligence, accidental or other.

Will I have to pay the Body Corporate insurance excess by just submitting the claim form, regardless of whether the insurer processes the claim or not?

Is it likely I will I have to pay this large excess even though it is not my fault? I don’t know if there is even $2500 damage to my shelving and walls.

Am I liable for the damage to the unit below?

Would the BC insurer likely claim all of the damage to both lots off the plumber, and me not pay the Body Corporate insurance excess?

In other words, I don’t know if it is financially worth my while to submit a claim with BC insurer given the large excess.

Answer: It will be a matter for the body corporate to decide on the payment of the Body Corporate insurance excess.

Section 184 of the Body Corporate and Community Management (Standard Module) Regulation 2008 provides a specific reference to who is responsible for the excess. (see below)

As the claim has caused damage to 2 lots, the owner of a lot is only liable to pay the excess if the body corporate decides it is reasonable in all the circumstances for the Body Corporate insurance excess to be paid for by the lot owner. If the owner has not already done so, they may wish to put a case forward to the body corporate outlining why they believe in the circumstances it is not reasonable for them to pay the excess, (for example the claim was from an unforeseen event following an upgrade of a water system). Ultimately, however, it will be a matter for the body corporate to decide on the payment of the Body Corporate insurance excess.

Excess payments are usually made in the following ways:

• The payment is either deducted from any settlement the insurer pays; or
• If the insurer engages a builder/contractor, the excess is payable to the builder/contractor before works start.

If repairs are below excess, the insurer will close the claim without proceeding and the owner can request to see a copy of the quotes before the excess is paid.

If the insurer believes the contractor who installed the water system is liable for the damage, they will pursue a recovery action against the contractor and usually the insurer will refund the excess if they are successful in their recovery – we recommend checking this with the insurer or strata manager as policies will differ from insurer to insurer with regard to Body Corporate insurance excess.

This post appears in Strata News #271.

Tyrone Shandiman
Strata Insurance Solutions
T: 07 3899 5129
E: [email protected]

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. This information is designed as a basic guide with relation to cover and you should refer to your Policy Schedule and Product Disclosure Statement for all terms and conditions related to cover under any insurance policy. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.

Question: I’ve had a pipe leak in the bathroom leaving extensive damage that was covered by Body Corporate insurance. Who pays the water damage excess?

Recently I’ve had a pipe leak in the bathroom leaving extensive damage that was covered by body Corporate insurance. However, the $500 excess had an extra $200 water damage excess.

Is the water damage excess covered by the body corporate or the individual lot owner? The water leak was not a hot water pipe.

Answer: If the pipe and damage is within 1 lot, the excess would usually be paid for by the lot owner.

In Queensland, Section 184 of the Body Corporate and Community Management (Standard Module) Regulation 2008 provides a specific reference to who is responsible for the excess.

1. 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. Example — If a shower screen is damaged in a lot and an insurance claim is made under the body corporate’s reinstatement insurance, the owner of the lot would be liable under subsection (3) to pay the excess unless the body corporate decides it is unreasonable for the owner to be required to pay it. However, if there is a fire within a lot caused by a short circuit in electrical wiring located in an internal partition, the body corporate might decide it would be unreasonable for the owner to be required to pay the excess.
2. For an event affecting 2 or more lots, or 1 or more lots and common property, the body corporate is liable to pay the excess unless the body corporate decides it is reasonable in all the circumstances for the excess to be paid for by the owner of a particular lot or to be shared between owners of particular lots, or between the owner of a lot and the body corporate, or between owners of particular lots and the body corporate.

If the pipe and damage is within 1 lot, the excess would usually be paid for by the lot owner.

Tyrone Shandiman
Strata Insurance Solutions
T: 07 3899 5129
E: [email protected]

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. This information is designed as a basic guide with relation to cover and you should refer to your Policy Schedule and Product Disclosure Statement for all terms and conditions related to cover under any insurance policy. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in Strata News #249.

Have a question about body corporate insurance excess or something to add to the article? Leave a comment below.

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