QLD: Who pays if one lot’s activities increase strata insurance premiums?

Question: Can a body corporate recover higher insurance costs from a lot owner if a commercial tenant, such as a massage parlour, increases the scheme’s premium?

We’ve had a significant increase in insurance premiums. The insurer advised our strata manager that the increase is partly due to one commercial lot now operating as a massage parlour. The business holds the required licences, but some committee members believe it increases the building’s risk

Can an insurer increase the scheme’s premium based on the type of business operating in a lot, and does the body corporate need to disclose this use to the insurer? If the premium has increased because the lot operates as a massage parlour, can the body corporate recover the additional insurance costs from the lot owner?

Answer: If an insurance premium increases due to the presence of a massage parlour, the body corporate can pass a resolution at a general meeting to add the amount of the increased premium to the lot owner’s ledger.

Insurers are tightening their stance on personal‑services businesses, particularly massage parlours, due to concerns about regulatory compliance, increased liability exposure, and the potential for criminal activity targeting specific premises. Even when a massage parlour operates legally, its presence can influence how insurers assess the scheme’s overall risk profile.

Bodies corporate may face:

• higher premiums or restricted cover if insurers consider the scheme to have a higher‑risk massage parlour tenant;
• greater scrutiny of claims, especially those involving fire, vandalism or malicious damage linked to the premises; or
• stricter disclosure obligations, where failing to inform the insurer that a lot is being used as a massage parlour may jeopardise cover.

If an insurance premium increases due to the presence of a massage parlour, the body corporate can pass a resolution at a general meeting to add the amount of the increased premium to the lot owner’s ledger.

This post appears in the April 2026 edition of The QLD Strata Magazine.

Brooke Cunningham
Mathews Hunt Legal
E: admin@mathewshuntlegal.com.au
P: 07 5555 8000