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NSW Post.
I’ve noticed the proposed NSW Strata Schemes Management Bill 2015 (yet to commence) does not advise the frequency of insurance valuations.
Presumably the yet to be advised Regulations will provide the frequency (currently 5 yearly min.), and who is qualified to complete such reports.
Any details appreciated.
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LGA – I think that the original requirement for 5 yearly valuations by a Registered Valuer in the current Act was repealed (at sect 85?), but nonetheless the original “exposure draft” of the NSW Strata Schemes Management Bill (2015) released around July 2015 stated at Sect 163:
163 Valuations to be obtained for the purposes of insurance(1) A valuation of a building that is required to be insured under this Division must be obtained at least once every 5 years by the person or persons required to take out a damage policy for the building.(2) The valuation must be carried out by a person who has the qualifications prescribed by the regulations.(3) The proportion of the cost of a valuation that is payable by an owners corporation or other person is the same as the proportion of the premium for the damage policy that is payable by the owners corporation or person in respect of the building concerned.However the currently available release of the Bill (2015) states at Sect 161, and with reference to the requirement at the preceding Sect 160 regarding compulsory building insurance;161 Requirements for Damage Policy(1) General requirementsThe damage policy for a building must be with an approved insurer, be in the name of the owners corporation, and any other person required to insure under section 160 and provide for the following:(a) the building is to be insured for at least the amount determined in accordance with the regulations.So like you, I assume that a requirements within the original “exposure draft” of the Bill are to be reflected in the Regulations that are currently being drafted, or perhaps that it’s intended for “approved insurers” to prescribe at what frequency valuations are to be conducted, and by whom.PS – I’ve done a bit more research on this and have confirmed that Sect 85 has indeed been repealed, that the draft Regulation (2016) will not prescribe periodic valuations, and that the insurer of our Plan, who is oblivious to the situation, would only comment upon the dire impacts of under-insurance about which I’m already aware.Call me a cynic, but it seems to me that this is yet further evidence of Governments’ desire to get out of everything “regulatory” unless it generates net revenue, and to instead permit self-regulation and private certification, thereby facilitating the free-for-all that will surely result — this time by some Owners Corporations not arranging regular valuations of their properties, because they won’t have to!There will be no compulsion to review insurance under the new legislation.
Here is the definitive answer, from a Ministerial spokesman:
Section 83 (2) of the Strata Schemes Management Act 1996 required strata scheme buildings to be insured for at least the value of the building indicated by the last valuation obtained for the building. Section 85 required property valuations for the purpose of insurance under the Act to be obtained at least every five years. Both of these sections were repealed on 5 November 2015 by the Regulatory Reform and Other Legislation Repeals Act 2015. The repeal of these sections related to the de-regulation of the property valuer profession in NSW.
These provisions were not therefore included in the Strata Schemes Management Act 2015, and it is not intended to address the issue in the forthcoming Regulations.
Clause 9 of Schedule 1 of the Strata Schemes Management Act 2015 requires that the particulars of each insurance policy taken out by the owners corporation must be included in, or accompany, the notice given to lot owners of each annual general meeting. This enables lot owners to assess the need for any adjustment of the amounts the property is to be insured for. The owners corporation can obtain a property valuation at any time they wish.
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