Question: I had to have timber floors repaired in my unit due to water damage. I was wondering whether the excess was my responsibility given the damage was a strata insurance claim?
I had to have timber floors repaired in my unit due to water damage caused by water seepage under the door from the common property walkway.
Strata claimed insurance for the repair work, however, I was asked to pay the excess.
I was wondering whether the excess was my responsibility given the damage was a strata insurance claim?
Answer: As legislation is silent on this issue, we firstly recommend reviewing the by-laws of the strata company to see if there is guidance on excess in the strata corporation by-laws.
The Strata Titles Act 1985 (WA) is silent on who is responsible for payment of excess. We understand Queensland legislation is the only legislation that specifically provides guidance around excess.
As legislation is silent on this issue, we firstly recommend reviewing the by-laws of the strata company to see if there is guidance on excess in the strata corporation by-laws.
Failing this, we generally advise clients that for claims effecting one lot only it is usually paid for by the lot owner unless the strata corporation decides it is fair in the circumstances for the body corporate to bear the cost and for claims effecting two or more lots or one lot and common property it is usually paid for by the strata corporation unless the strata corporation decides it is fair for one lot owner (or a number of lot owners) to bear the cost.
As the water damage has come from a leak on common property it may be reasonable to expect the strata corporation to pay the excess – particularly in cases of negligence.
I am aware of cases in other states whereby the applicable legislative body has found the payment of an insurance excess attracts the benefit principle. It is money paid out to effect a repair, and as such consideration should be given to the person or persons who benefit. In this case you may suggest the strata corporation are receiving the benefit. Not because common property was damaged and requires repair, but because the source or cause of the damage arose from common property. In effect, the strata corporation is receiving the benefit of not having to pay the full cost of the damage.
Tyrone Shandiman
Strata Insurance Solutions
E: tshandiman@iaa.net.au
P: 07 3899 5129
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 Advisernet Australia AFSL No 240549, ABN 15 003 886 687.
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