Question: For our duplex with no common grounds, do we need strata insurance or can each owner take out building insurance?
Answer: It is a requirement the body corporate take out cover for the property and liability under a strata policy.
The Strata Titles Act 1998 requires that the body corporate for a strata scheme must take out and maintain:
- a policy of insurance for the buildings and other improvements (if any) on the site. “Site” is defined in the act as the whole of the land included in a plan (including lots and common property).
- public risk insurance (also known as public liability insurance) over the site for an amount at least equal to a minimum prescribed by regulation.
With the above in mind it is a requirement the body corporate take out cover for the property and liability under a strata policy.
Section 103 has the following provision in the event the body corporate is in default of the above requirements:
Default by body corporate in relation to insurance
- If a body corporate is in breach of its obligation to take out and maintain insurance, the owner of any lot may take out and maintain the required insurance.
- The insurance may be taken out in the name of the body corporate or in the owner’s name.
- The costs incurred by an owner under this section may be recovered from the body corporate as a debt (and may be set off against any liabilities of the owner to the body corporate).
If you are having difficulty getting the other lot to pay for their contribution for insurance, you may wish to contact Department of Natural Resources and Environment Tasmania for further advice.
This post appears in Strata News #562.
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.