Question: In our small strata scheme, every year when the strata insurance premium is due, we have difficulty collecting payment from all owners. Do you have any tips on how to do this? Will the insurance company take part payment?
I’m the voluntary strata manager for a small unit complex in Perth. I’ve been in this role for 15 years and dislike it immensely, but I am the only one who will take on the role.
Every year when the strata insurance premium is due, I have immense difficulty securing payment of their portion from two of the owners.
We always end up OK by the due date, but I hate the anxiety associated with chasing up the money.
Is there an easier way? I’ve played the “I’ll quit if you don’t make your payment on time” card a couple of times.
Do strata insurance companies accept partial payments if some unit owners are tardy in meeting their obligation?
Answer: Advise all owners that, in future, all payments will be required 2 days prior to the policy expiry date.
The Strata Company (all owners) have an obligation under the legislation to insure for full replacement value of the complex. As a voluntary manager you are only trying to ensure the Strata Company meets it’s obligations.
Some insurers, especially if you have a history with them, will allow a 28 day extension on the policy. If the due date is an issue, this may provide you with the confidence that the policy will be paid regardless and takes the onus off you as a volunteer to ensure the funds are received on time. It would be worth asking your insurers if they would allow this. Even 14 days would take the pressure off. This information does not need to be advised to all owners as this is an extension and is only there if required.
In relation to dealing with the other owners, it may be worth advising them that, in future, all payments will be required 2 days prior to the expiry date. On the day prior to the insurance renewal date, you will be providing the insurer with the instructions to place the policy to ensure it is in place prior to expiry. This will hopefully ensure the owners have their money to you in advance.
The insurers will not normally accept partial payments – they will insure to the limit that the funds will allow and this may leave the Strata Company under insured.
This post appears in the August 2022 edition of The WA Strata Magazine.
Shelley Fitzgerald Emerson Raine E: shelley@emersonraine.com.au P: 9330 3959