During the recent hailstorm in Sydney one of the two storey townhouses in our complex suffered damage to a skylight.
A generic by-law for the installation of skylights exists which states “… the Owners Corporation confers on the Owners the exclusive use and enjoyment of those parts of the common property the demolition removal or replacement of which is comprised in the work which will become common property subject to the following conditions.” Then there are a number of clauses relating to position, workmanship etc and “the Owners shall be responsible for the maintenance, upkeep and – whenever necessary – renewal or replacement of those parts of the common property the subject of this by-law.
The owner sought to claim on the Strata insurance policy but the SC referred him to the wording of the by-law (that he was responsible for replacement) and that he should claim on his insurance policy.
The owner contacted his insurance company (contents insurance) and was told his policy did not cover building items as these were covered under the Strata insurance. It appears that an owner cannot have an insurable interest in any item which forms part of the common property.
Even if responsible for its maintenance, it’s doubtful that a lot owner could insure the skylight even if they wanted to.
Compulsory strata insurance covers buildings regardless of if parts of them are common property or lot property or if they are a lot maintenance responsibility or not. It also usually covers lot fixtures, fittings and improvements.
So if the cost to repair/replace the skylight is less than the Strata insurance excess, the owner should be required to pay?
It depends on the specific wording of the by-law that allowed the skylight to be installed in the first place. But if it passes the cost of repairs etc to the lot owner, then, yes, the lot owner should pay the balance.