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Do insurers 'police' strata schemes?
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BONNIE L
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14/04/2017 - 6:51 pm
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Hi all, Thanks everyone. Does anyone have experience of a strata insurance firm acting like the Police with regular checks made to strata manager on what I regard as non-urgent maintenance matters in a building?   A comment in a SC meeting was made to this effect.  I will stand corrected if that's not tommy rot. Any tips appreciated. Disclaimer:  In my experience as a householder, no insurance firm has ever checked up on me about my car or household content insurance. It's always been up to me to check on details as routine when renewing each year. 

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Lady Penelope
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14/04/2017 - 7:14 pm
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Unlike in a residential building holding Strata Insurance is mandatory under each state’s relevant strata legislation. Perhaps your strata insurance provider was concerned that your scheme was not complying with the legislation?

In general terms, an Owners Corporation is responsible for the following main insurances :

  • The main building and any outbuildings
  • Public liability
  • Workers Compensation
  • Voluntary workers cover

More info and links to the legislation is here: http://www.strataman.com.au/insure.html

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JimmyT
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15/04/2017 - 9:15 am
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BONNIE L said
Does anyone have experience of a strata insurance firm acting like the Police with regular checks made to strata manager on what I regard as non-urgent maintenance matters in a building?   

If an insurer is aware of an issue that would substantially affect the risk in a building, and where continued coverage on the current rates may be dependent on the problem being fixed, they may check up.

However, it is much more likely that they will warn the strata scheme managers (or not) and then be prepared to not compensate the owners for any damages that occur as a result of the problem not having been addressed.

Insurers tend to be more reactive than proactive. If you breach the terms of your insurance, then they simply won't pay. There are no StrataKops.

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Cosmo
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15/04/2017 - 9:50 am
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Hi Bonnie, just to reinforce what Jimmy said.  I have never heard of an insurance company being proactvie in the way you describe.  It is very much more in their interests just to not pay out when you claim.

Our strata had a problem with balcony railings.  The railings were compliant with the relevant safety codes when built.  However since then we had some work done on the exterior which affected them and this meant we had to bring the railings up to the current code.  

Some of our owners didn't want to spend the money and just wanted to ignore the issue.  It was pointed out to them that if (and it was a small if but isn't that why you have insurance?) there was an accident the first thing the insurance company would do was send out an inspector and our claim on our insurance policy would be void.  This would have left the OC and owners liable for any claim.  

The OC has a duty to the insurance company to keep the property safe and in good repair.  If the OC or individual owners know of a defect it needs to be addressed. 

If the OC or owners couldn't have reasonably seen the defect the policy would probably cover any claim.  But as in our case we did something to the exterior which we should have known affected the railings.

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supersleuth
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07/05/2017 - 3:03 pm
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Hi

I have a question related to this and short of starting a new thread, I hope people out there can be of assistance.

I am a member of a SC and there are members who go out and get their own quotes to have work done at the building.  We are now considering getting a drain installed at the back with sub surface excavation to take place.  Three quotes were obtained by a SC member without our or the strata managers knowledge. They are going to be put forward at the upcoming EGM.

I had heard that if SC members go and get their own quotes and the work is carried out, then the OC is not covered if something goes wrong.  Is this correct?

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Lady Penelope
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07/05/2017 - 3:55 pm
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supersleuth - SSMA 2015 Schedule 1, Part 2 Section 4:1 states that Any owner, or any person entitled to vote at a general meeting of an owners corporation, may require a motion to be included in the agenda of the next general meeting of the owners corporation.

It is not only the SC that is permitted to submit Motions. Any lot owner is within their rights to submit a Motion, including a Motion with alternative quotes, as long as they undertake the correct procedure indicated in Section 4. The written notice submitted by the owner must include an explanatory note of up to 300 words.

The obtaining of quotes is not one of the functions that may only be delegated to the SC (see SSMA 2015 [s13]). 

http://www.austlii.edu.au/au/legis/nsw/consol_act/ssma2015242/s13.html

Once the OC has selected the quote that they prefer out of the three presented at the EGM, and the OC has approved the quote at the EGM by the relevant voting method, then it is immaterial who proposed the quote.

If you are unhappy with the Motion then there is always an option to vote NO.

I am not sure whether this is the case in NSW but ... in QLD if the SC has a particular concern about an owner's Motion then the SC can recommend that the OC members vote NO to the Motion. The reasons for the SC's recommendation to vote NO can be presented to the OC members via Extra Material when the EGM notice is sent out to all owners. However, the SC must have decided to include this extra material via a majority resolution at an SC meeting prior to the EGM. The submitting of this extra material recommending a NO vote cannot be done on a personal whim - it must have the majority support of the SC and be properly Minuted. 

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Austman
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07/05/2017 - 6:31 pm
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BONNIE L said
 Does anyone have experience of a strata insurance firm acting like the Police with regular checks made to strata manager on what I regard as non-urgent maintenance matters in a building? 

I have. Well not "regular" checks - but checks none the less - possibly random ones.

In one of my stratas - this time in NSW - where I was the chairperson, we had our insurance company write to us, out of the blue, over a matter that concerned them.

They were concerned about a possible structural defect in the building and wanted a structural engineer's report about the matter.

We got a structural engineer's report (which stated there was no structural problem) and sent it to the insurance company and it was all was OK after that.

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