Question: One owner of two lots in our 6 lot strata block refuses to pay their proportion of the strata insurance renewal. Is VCAT our only option? Where does this leave us regarding compliance with legislation?
I’ve recently purchased a unit in a block of 6. One owner organises strata insurance. 4 owners have paid their portion of our insurance renewal. The remaining owner of the other two units is refusing to pay their share. We’ve lodged two thirds of the payment for the strata insurance. What is our recourse here? Is VCAT the only option?
My bank has refused to insure just my property as it’s under a strata title, however, I’m not convinced that the strata insurance policy is valid, as the whole amount has not been paid.
Answer: An owners corporation must take out insurance for all buildings on common property.
In accordance with Division 6, Section 59 (1) of the Owners Corporation Act 2006, an owners corporation must take out insurance for all buildings on common property. Section 55 also states that nothing in the Act limits the right of an owner to effect a policy of insurance for their building and their interest in common property.
In regards to recovery of fees from the lot owner, please refer to Part 3, Division 1, Section 23 (1 c) where in an owners corporation may set annual fees to cover insurance. Please also refer to Section 30, 31 and 32 in regards to fee notices required.
An independent, professional owners corporation Manager would ensure that the levies are struck to cover the requirements of the owners corporation.
You may consider making application to VCAT as long as all the requirements of the Act have been adhered to.
This post appears in the September 2022 edition of The VIC Strata Magazine.
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