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I DIDN’T REALISE THAT MY STRATA UNIT WAS ALREADY INSURED!

In Victoria when you purchased your unit you will have received an Owners Corporation Certificate in your Section 32 documentation. This provides all the current insurance details. If the owners corporation (or body corporate in the old language) is not professionally managed you should certainly enquire as to the status of insurance.
Unfortunately, all too often owners purchase their unit and immediately take out building insurance, only to discover that their unit is already comprehensively insured. Not only have they spent money unnecessarily, but have created a potentially dangerous ‘double-insurance’ situation.
The Owners Corporations Act (2006) requires that your strata takes out specialist strata insurance on all the buildings on the Plan of Subdivision. This insurance automatically includes a minimum of $20 million of Public Liability insurance over the common property, which includes the driveway (s).
This comprehensive insurance policy taken out with one specialist insurer ensures the safest and the most cost-effective insurance option. You should be aware that there are some obvious risks if duplicate insurance policies exist.

  • The potential for these insurance companies to dispute which company is liable, holding up repairs for a lengthy period.
  • The specialist policy will have replacement cover whilst the second policy may simply offer a payout, resulting in that owner having to arrange their own re-building.
  • A range of scenarios which can affect two units with a common wall where conflicting insurance policies result in dispute and difficulty.
  • Such scenarios are entirely unsatisfactory if the buildings are connected by common property, resulting in the buildings not being rebuilt at the same time, and disputes about who pays for the adjoining walls and services.
All of the above depend on the buildings being adequately insured. If any of the joined buildings are under-insured then the owners may not get their full pay out, meaning they can’t afford to rebuild.
If in doubt, you should contract a strata specialist for advice.
 

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THE COMMITTEE WON’T DO ANYTHING ABOUT MY NEIGHBOURS CAR

Strata communities generally have either a formal committee, or at least a group of active residents who take on the task of resolving problems that invariably occur in their Owners Corporation. If the strata complex does not have an experienced strata specialist in place, problems can arise if the owners’ committee can not (or will not) agree to deal effectively with such problems.
Unfortunately it is a fact of life that complaints can occur, and managers and committees must have policies and procedures in place to manage and resolve such complaints and disputes.
Disputes within an Owners Corporation are far more common than many people realise. Complaints occur for a number of reasons, most generally involving vehicle parking and noise, however it is impossible to predict the issues that can arise and cause problems. And when nobody is prepared to act to resolve the problem… it generally escalates. This is where the experience and skills of a strata specialist can be invaluable in calming the situation and ensuring that the needs of all residents are heard and communicated .
A strata specialist will initially recommend that basic communication is common sense. Sometimes residents who fail to obey the rules sometimes simply do not know the rules. As a starting point, your committee should ensure that all lot owners and tenants are provided a copy of the Owners Corporation rules. As a follow-up, the committee should encourage neighbours to talk about their concerns to resolve disputes.
If this strategy fails, then the strata specialist will know how to take communication to the next step, which can be arranging for mediation or conciliation, made in good faith by all parties, or if all else fails, applying to VCAT to make a legally binding decision about how the dispute is to be settled.
 

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Sharing cost of building insurance


28 Apr 2023

How do I find out who owns the other unit in our duplex so we can share the cost of our building insurance?

 

I own a duplex. We have always divided the building insurance for the duplex between both owners. A few years ago, I put my unit up for rent. As I no longer live at the address, I’ve only just discovered that my next-door neighbour sold their unit and the new owner rents out their property as well. Our renewal for building insurance is due and I am trying to locate the details of the new owner.

Is there some way to find out who owns the property so I can contact them about the insurance? In the meantime, what do I do to ensure the property is sufficiently insured?
If I pay the insurance in full, how do I recover the proportion owed by the other owner?
 

Do a Land Titles Search.

 

The best way to identify the owner of a property is to do a Land Titles Search. A title search shows the information held in the Victorian Register of land at the time the search is made. This includes registered proprietors’ names and addresses, mortgage details and information about other encumbrances affecting the land. There is a cost to undertaking a search.

Land Victoria holds this information and manages the process. For information on how to do a Land Titles Search go to Land Victoria’s website and follow the link: Find land title information.

Alternatively, you could approach the tenants or the real estate management agent and ask them for them to pass on a message to the owners explaining that you would like to contact them.

Regarding insurance, as the owner of a duplex you are part of a two lot or Tier Five Owners Corporation, which is exempt from many of the legislated requirements of more complex owners corporations, including the requirement to take out reinstatement and replacement insurance or public liability insurance. This means that there is no obligation on owners to take out insurance and therefore no avenue for you to recover any money that you choose to spend on joint insurance.

Nevertheless, it is a good idea to take out joint insurance where you share any common property, such as a shared wall, shared driveway or shared services. Joint insurance in such circumstances is generally cheaper than individual insurance. Also, where you insure individually, it can be difficult to get coverage for those shared areas. However, if you cannot contact your neighbour or they choose not to take out joint insurance, you should discuss with your insurance broker about insuring your own property.
 

Gary Howell | MBCM Strata Specialists