In VIC, any waterproof membrane on a lot’s boundaries usually belongs to the lot and is therefore a lot owner responsibility to maintain. This is due to the Subdivision (Registrar’s Requirements) Regulations 2011 which states (for the typically specified Interior Face) that “Any internal coverings, waterproof membranes and fixtures attached to walls, floors, and ceilings are included within the relevant parcel;” The requirement applies to all lot wet areas including bathrooms and balconies.
This means that lot owners are often either fully or mostly responsible for leaking bathrooms and balconies. But it can depend on exactly where and how the leak occurs.
If it turns out to be a lot owner responsibility, how repairs are made is up to the lot owner. The lot owner can seek compensation from others including builders or insurers.
Compulsory strata insurance will not generally cover building defects. But it will often cover consequential damage. So while a balcony defect repair might have to be paid for by the lot owner, the damage caused by that defect to the lots or common property might be covered.