Question: A lot owner is a volunteer and looks after the gardens for free. If the body corporate pays this owner to paint the building, are there any insurance implications?
A lot owner in our building looks after the ground for free. To save costs, can we pay this person to paint the building? It would save the body corporate thousands of dollars. We are confident in their quality of workmanship.
Our treasurer is concerns about the insurance implications if we pay for work. Can work can be done voluntarily around the units? Are there different rules if we pay the lot owner for the work?
Answer: Is the body corporate covered in case of damage to the corporation property and injury to the lot owner providing the services?
This is a great question. Many lot owners perform work around the common property and do so voluntarily, or are reimbursed for expenses incurred.
A body corporate can authorise a person at a meeting to perform various maintenance tasks. If the lot owner is performing a task voluntarily on behalf of the body corporate, many insurance policies will provide cover in case of injury for voluntary workers. Some body corporates may purchase insurance cover for the lot owner to perform regular services for the body corporate. This will cover the lot owner as if they are a contractor providing services to the body corporate.
Other body corporates may just reimburse the lot owner upon providing a receipt for expenses. There are no set rules in how a body corporate handles this matter, however, there is an important factor to consider. Is the body corporate covered in case of damage to the corporation property and injury to the lot owner providing the services?
This post appears in Strata News #652.
Tyson D’Sylva
Ace Body Corporate Management
E: tyson.d@acebodycorp.com.au
P: 08 8342 1544
For the carpark-tree question, I would have thought the reasonable thing to do is to seek the advice of an expert arborist. The arborist might advise that the tree has no obvious defects and is no more likely to drop a branch than any other tree, which might make it reasonable to leave the carpark where it is.
Alternatively, the arborist might advise some risk-mitigation work, which should be undertaken, that would be permissible work on a regulated tree and that might also then make it reasonable to leave the carpark where it is.
Finally, the arborist might advise that the tree is near the end of its life and/or unsafe and you would have good grounds to apply for permission to remove it.
In the ACT at least, the Tribunal has made it very clear that the legal person who holds the insurance policy is responsible to pay the excess. Since the insurance on the building is a policy that the Owners Corporation is required to have, it is the OC that pays the excess. The wording of the ACT requires the property to be insured by the OC, plain and simple. No allowance is made for the partial insurance that every real-word policy is due to policies having excess amounts. So, to the extent that the OC is not insured, the amount of the excess, OCs have been told they must meet that cost from their own funds.
Thanks Peter. We draw our reader’s attention to the fact that strata legislation differs in each state of Australia.