Question: A tenant’s overflowing basin caused a major water inundation problem in our building. Owners are unhappy that the OC paid for repairs. Can the money be recovered?
Over a year ago, a tenant caused a major water inundation problem in our building. They left a tap running in a blocked laundry trough, and water leaked into common property and apartments four floors below. The tenant vacated, and the owner now lives in the lot.
Many owners are unhappy that the owners corporation paid the high cost of repairs. Can the owners corporation recover the amount? Is insurance the only solution? Is the owner responsible? What about the tenant?
Answer: Accidents can happen, which is precisely why strata insurance exists.
Strata insurance typically covers damage to the building caused by sudden and accidental events. Believe it or not, an accidental event, such as an owner or tenant leaving a tap on, is something that many insurers will cover. Accidents can happen, and this is precisely why strata insurance exists.
In situations where a tenant has left a tap on, they may be considered legally responsible for the resulting damage. However, pursuing the tenant directly for damages can present challenges, including delays in repairs, potential exacerbation of the damage, and no guarantee of recovery.
The recommended approach is first to lodge a claim under the strata insurance policy. This allows for repairs to commence promptly, minimising disruption and further damage. Once repairs are completed and the full costs are known, the insurer may decide to pursue the tenant for recovery if they believe there are grounds to do so.
It is important to note that in recent years, some insurers have chosen not to pursue tenants for damages, particularly in cases of significant losses where the tenant does not have insurance. This shift follows public concern about the fairness of such recoveries. Even when recoveries are pursued, there is no guarantee of success.
Accidents like this are an unfortunate reality of strata living, where the unintended actions of one individual can affect others, including claims history and insurance premiums for all owners.
This post appears in the February 2025 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.
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