These questions are about strata insurance for common driveway.
Table of Contents:
- QUESTION: In a group of 3 villas, do we need to have a strata committee? Do we need shared strata community insurance?
- QUESTION: We currently pay Strata Insurance but we do not share a common driveway. We have no other common property. Can we arrange our own strata insurance?
- QUESTION: Where do we stand for Strata Insurance for the common driveway? Are we able to separately insure the common driveway without having to take out insurance for the whole strata plan?
Question: In a group of 3 villas, do we need to have a strata committee? Do we need shared strata community insurance?
I am the owner in a group of 3 units. We have a shared driveway for the middle and back villa).
We have always paid strata community insurance by all being sent the invoice and splitting the bill by 3. I have now been told by the insurer that we need to have a strata committee and he can only speak with the strata chair, and we should all be paying it together. If there are less than 4 villas, is it a requirement the have strata meetings, committee, AGM’s, etc.
In a group of 3 villas, do we need to:
- have a strata committee?
- shared strata community insurance?
Should we change insurance companies?
Answer: Strata Schemes of 3 to 5 lots can have by-laws exempting them from certain requirements
Under section 140 of the Strata Titles Act 1985 Strata Schemes of 3 to 5 lots can have by-laws exempting them from the following:
- Having an administrative fund,
- Keeping accounting records and preparing a financial statement,
- Keeping minutes,
- Having a designated Strata Letterbox, and
- Keeping a roll of owners.
In the case of a three lot scheme such as yours, all owners automatically form the council of owners.
If you are not sure if your strata company has such by-laws in place it might be worth seeking guidance from a strata specialist.
In relation to insurance there are a number of factors to be considered. These factors are:
- If your strata scheme is a single strata scheme (no lot above or below another lot) or a multi-tier scheme,
- If your scheme is a survey strata plan or strata plan.
Single tier strata schemes may dispense of its insurance obligations (Insurance of insurable assets that are common property and insurance in respect of damage to property, death, bodily injury or illness for which the owners of lots in the scheme could become liable in damages as holders of the common property) by passing a resolution without dissent (no vote against). It is important to be aware that one owner can revoke the resolution.
From your question I gather that your strata scheme has a strata insurance policy and the arrangement you have is for the premium to be divided and paid by each lot owner. This arrangement in my mind is fine for a three lot strata scheme. In terms of changing insurers I would suggest that this is done by seeking terms from alternate insurers prior to renewal. An insurance broker would be able to assist you with this process. It is important to ensure that you compare coverage between the different policies to ensure that you understand any differences and that the chosen policy meets the requirements for your three owners.
This post appears in Strata News #454.
Question: We currently pay Strata Insurance but we do not share a common driveway. We have no other common property. Can we arrange our own strata insurance?
I have a question regarding strata insurance when we don’t have a common driveway. We live in Western Australia and I am currently the owner of one of two property on a strata plan. There is a total of 2 single storey properties and each of us has our own driveway. There is a fence dividing our respective property and we pay for our own utilities bill etc so that there is no common property or shared invoices.
The only expenses we shared is the strata insurance. This has been the case since we both of us purchased from the original owners. I was wondering if we need strata insurance or can we pay for our own building and content insurance as we do not share a common driveway.
Answer: The Strata Titles Act 1985 provides different insurance requirements for the different types of strata plans, hence it will depend on the type of strata plan that you have.
The Strata Titles Act 1985 (STA) provides different insurance requirements for the different types of strata plans, hence it will depend on the type of strata plan that you have.
Sometimes, common property can exist without you realising it. As you have described it may fall under the section of the STA – Lots in Single Tier Strata Scheme s53B. Within this section it provides an option that enables a Proprietor to insure, or the Strata company to determine to jointly insure. In the first instance, any determination made by the Strata Company (ie the two lot proprietors) must be in accordance with the requirements of the STA.
Generally, strata insurance is accepted as a cost-effective way to obtain broad coverage, further with the knowledge that both buildings are insured. You may wish to refer to a strata lawyer or consultant for specific advice regarding your strata plan and on how to achieve your desired outcome, whether it be to jointly insured via the Strata Company or to separate the insurance and take care of such as individuals.
This post appears in Strata News #223.
Question: Where do we stand for Strata Insurance for the common driveway? Are we able to separately insure the common driveway without having to take out insurance for the whole strata plan?
I own the end villa of a 3 villa strata plan in Western Australia. From the time I bought my villa, individual owners were responsible for their own insurance coverage of their respective villas. The front villa has its own street frontage and driveway. The middle villa and my villa share a common driveway.
I discovered that because each villa is insured individually by their respective owners, the common driveway shared by the middle villa and my villa is not currently insured.
My questions about the strata insurance for common driveway are:
- Are we able to just insure the common driveway, without having to take out insurance for the whole strata plan? Each owner is happy with the current situation where we are individually responsible for our respective building and contents insurance.
- Is there a required level of insurance that common driveways should be insured for?
- What insurance companies deal in strata insurance for the common driveway? I tried a couple of the mainstream insurers, and they all basically said the only way is for all the owners to insure the strata plan.
Answer: Obtaining insurance for common property only is difficult but can be arranged in certain circumstances.
Obtaining insurance for common property only is difficult, but can be arranged in certain circumstances. Understanding the strata plan is important when considering the insurance arrangements.
In terms of individual insurance for your unit, this is allowable under the Western Australian Strata Titles Act 1985 (STA) only in certain circumstances and you should obtain advice in this regard. It is important to understand your strata plan boundaries.
There a required level of insurance that common driveways should be insured for. STA requires you insure for a minimum of $5,000,000 legal liability. In our current strata insurance market, this is considered a very low amount, as legal liability claims can amount to much higher limits, given they usually take a long time to settle and involve injury or harm to people or property. The new strata reforms around Australia and moving to much higher limits of $20,000,000 legal liability, as minimum amounts.
There are limited companies that deal with insuring common driveways and it very much depends on the circumstances of the strata plan and its boundaries. The most complete and best way to insure strata properties is where all owners take on residential strata insurance for the strata plan. For strata and common property insurance arrangements, you should seek advice from a qualified insurance broker or your strata manager to help you understand your strata plan and insurance requirements.
This post appears in Strata News #176.
Have a question about strata insurance for a common driveway or something to add to the article? Leave a comment below.
The above is a general response only to questions asked, not taking into account personal circumstances and is not legal advice. See General Advice Warning.
General Advice Warning
This advice has been prepared without taking into account the client’s objectives, financial situation or needs. Because of that, before acting on the above advice, the client should consider its appropriateness (having regard to their objectives, needs, and financial situation).
If the advice is related to the acquisition of an insurance contract, the client should obtain a Product Disclosure Statement relating to the product before deciding whether to acquire it.
Please note this advice was provided prior to the proclamation of the new strata title amendments and will be updated in due course.
- WA: Q&A What insurance do I need for a strata property?
- Landgate: Insurance and strata
- WA: Insurance for Common Property & Your Lot Explained
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