This question about reimbursement for out of pocket expenses relating to water leaks has been answered by Leonie Milonas, PSC Property Lync Insurance Brokers.
Question: Water leaks have resulted in loss of rent and repair costs. Shouldn’t we be reimbursed for our out of pocket expenses from the insurance and the Council of Owners?
I have a common interest with my son in one of 14 apartments in Fremantle. The apartment is rented out as an Airbnb.
Mid last year, a renter rang complaining that the power kept tripping. My son went down to investigated and discovered the ceiling was leaking in the kitchen lounge. We refunded the renters money and contacted the Strata. Initially, the Strata were extremely helpful and organised an electrician to attend quickly and then return on to finalise repairs.
On this follow up visit from the electrician, they discovered a water leak. A plumber was organised and the leak was repaired. We received the electrical safety certificate. The whole process ended up taking around two weeks.
We made a claim from the insurance for compensation for lost income for the two weeks, as we were unable to let the unit until the repairs had been completed.
The insurance company agreed to reimburse only part of the lost income and this doesn’t seem fair to me.
Also, when the plumbers were fixing the ceiling in the lounge and kitchen they discovered the ceiling above the shower was leaking. This was not related to the same burst pipe. We were advised it was a leaking shower from the unit above. This was finally fixed about one month later. The Strata advised they would submit the invoice to the Council of Owners for their consideration. Weeks later we are still waiting for an update.
From my understanding, all walls, floors and ceilings are common property and should be maintained by the Strata. Is this correct?
Answer: You are entitled to have the decision reviewed by the insurer’s Internal Disputes Resolution Team.
As I am not your insurance broker I am unable to comment about the specifics of your claims, other than to offer some general information about your rights and ideas on how to proceed.
Loss of Rental Income
Your insurer’s Product Disclosure Statement, as you would be aware, provides reimbursement following an insurable event accepted by the insurer, for Loss of Rent or Temporary Accommodation, when your lot /common property is made unfit for its intended purpose.
Under the Financial Services Review Act, you are entitled to have the decision reviewed by the insurer’s Internal Disputes Resolution Team. See attached an extract from the Longitude PDS for your information.
Leak in the bathroom
As this involves another Lot Owner’s shower recess area, such as waterproofing or re-grouting etc., sometimes it is a little more of a complex matter for the Council of Owners to work through depending on your strata plan and boundary definitions etc.
This part of your query relates to strata management, not insurance and I would suggest you speak to your Council of Owner members or your strata manager to understand the procedure and steps involved to get this matter resolved. Generally, the cause of the water ingress to your ceiling has to be fixed before repairs to the ceiling are undertaken.
Hopefully, this is of assistance to you or maybe contact your strata’s insurance broker for more information.
This post appears in Strata News #269.
- WA: Maintenance Planning and Insurance: The Strata Titles Amendment Act 2018 (STAA 2018)
- WA: Q&A Plumbing Problems in My Unit. Who pays for Investigating the Cause?
T: 1300 127 503
The responses to the above questions are prepared for informational purposes only, and is not legal advice and should not be relied on as legal or insurance advice. You should consult with a qualified insurance or legal advisor.
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