Do you know who should pay the insurance excess in your strata property? It’s the responsibility of the owners’ corporation as a whole, but there are exceptions.
Your strata unit must be insured by law in Australia, but when something goes wrong and repairs need to be made, who pays the insurance excess? The Unit Titles Management Act of 2011 allowed for provisions that state owners corporations must pay the excess, unless the regulation changes.
There are protections within your own strata unit regarding damages caused by tenants, and that will often mean you can use the bond money to pay for the insurance excess. However, general upkeep and building-wide repairs might mean every strata owner in the building must pay for the excess. Is this really fair?
Managing strata property is a team effort
If every owner of strata in your building was not liable for the insurance excess in the repairs process, do you think they would all contribute evenly to the general upkeep of your investment? Apportioning the responsibility evenly across every owner encourages them to maintain their unit to a reasonable standard.
In the event that one particular unit incurs significantly more damage than others (due to water run-off or tree roots impacting the foundations, for example), the owners corporation can claim debt from the owner of that unit based on wilful negligence.
Overall, having all owners responsible for the insurance excess of the strata property as a whole means everyone makes the effort to maintain their property – and there are laws in place that protect owners from irresponsible actions. For more information about insurance in your strata property, get in touch with your Civium strata Manager today.