Question: Can a townhouse on land subdivided off the original block be insured separately if it is a service-only OC with no common area? How can this be done?
We have two older units with a common driveway and a separate townhouse built on a block of land on the front of the block. It was subdivided off the original block but does not share any common property. There is a secondary ‘services only’ owners corporation between the two units and townhouse which was set up purely for Water easement.
Can the townhouse be insured separately as it is a service-only OC with no common area?
Answer: By unanimous resolution, an owners corporation may resolve that, if there is no common property, each lot owner must arrange for the lot owner’s own insurance.
Section 59 of the Owners Corporation Act requires the owners corporation to insure “Buildings”. Section 54 defines an insurable building as:
Building includes any building on the plan of subdivision and—
(a) any improvements and fixtures forming part of the building; and (ab) any shared services; and (b) anything prescribed as forming part of a building—If the lot owner homes do not form part of the plan of subdivision, they can be insured separately, otherwise, the only other exemptions for the requirement to arrange insurance are:
- Section 63: By unanimous resolution, an owners corporation may resolve that, if there is no common property, each lot owner must arrange for the lot owner’s own insurance.
- Section 64: This Division does not apply to an owners corporation if the land affected by the owners corporation is affected by another owners corporation which has the insurance required by this Division.
This post appears in the September 2022 edition of The VIC Strata Magazine.
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.