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I am looking for advice on the body corporate paying for the damages ($7500) that resulted from water ingress in February 2020.
I am in Brisbane and understand this is covered by laws – in the legislation of Body Corporate and Community Management Act 1997 (Sections 152 and S281) and subsequent case law. In my case it is the responsibility of the body corporate due to failed external wall membrane.
- The costs for the damage are – $7500
- Remove and cleanup and mould treatment $1500
- Replace carpet with tiles $2500
- Replace furniture $2000
- Lost rent and tenant motel accommodation $1500
They are ducking and diving about only paying what their insurer is perpared to cover ($500). Do you have any advice other than going to a lawyer for assistance.
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Given that something similar to what happened to you is used as an example in the Queensland Act, I’d say you were on pretty solid ground. I’m not sure how these things work in Queensland but if this was in NSW I’d be telling the committee that they can do this this hard way – fight it, lose and have to pay costs (from which you would be excluded) – or come to a mutually acceptable compromise over the costs.
Just because your body corporate is under-insured doesn’t mean you should have to pay.
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In 2019 our Brisbane unit was flooded when a pipe in the ceiling space burst, causing damage to walls, ceiling, carpets, rugs and underlay. The building manager contacted the Body Corporate insurer and work proceeded in quickly containing the problem and starting the drying and repairing process – all of which was subsequently completed satisfactorily. The company employed by the insurer determined that the carpets etc were damaged beyond repair. The body corporate contacted the body corp’s lawyer, who opined in writing that the body corporate was responsible for all damage. However, in spite of that advice, it decided at the next meeting to put a motion at the AGM asking residents to pay for our replacements by means of a levy. Not surprisingly, the motion was rejected, although we did argue strongly that the motion was out of order, especially in the light of the body corp’s legal advice, along with several other considerations.
We continued arguing our case but to no avail, so we then applied to the Commission to have the matter conciliated. An appointment was arranged and the secretary and chairman were appointed to attend. My wife and I are aged. Up to a day or two before the arranged meeting we had spent many, many hours in composing letters etc, as well as enduring several sleepless nights. The emotional pressure was intense, especially because we believed that our case had been misrepresented to the other residents. Their fallacious argument was that it was our responsibility to insure against such an event; in effect that the body corp was only partly liable !
Then, two days before having to front the Commission, the body corp’s insurer offered an ex gratia payment, an amount which covered our total costs. The latter were, of course, the financial costs only – we aged considerably in the drawn-out process.
What this farce illustrates is the play-off between insurance companies. Wall to wall carpets are really a FIXTURE, but home insurance policies do not usually cover claims such as ours, saying they are fittings. However, they often pay the claims and then, I suspect, claim against the building insurer. Unit owners are encouraged to claim against their insurer and quite often the body corporate then refunds the owner’s excess paid. Al very neat and simple.
In the light of our experience, we urge any unit owner(s) who suffer flooding as a result of common property failure to resist being talked out of making a legitimate claim – the body corporate is responsible and has to pay for repairs, even if their cover is inadequate.
More details of the event are needed.
But negligence of the OC/BC has to be established for it to be legally liable. Eg if the OC/BC knew there was a common property defect but failed to address it, that would be negligence. If the failure of the OC/BC to maintain common property to the required standard caused the event, that would be negligence. But if the event occurred without the OC/BC’s prior knowledge of any defect, that’s unlikely to be negligence. So it really depends on the details of the event. And to make it even more complex, there can situations where contributing negligence means partial liability…
Insurance is another matter. The OC/BC’s compulsory strata building insurance might cover some of the damage caused by the event regardless but that in itself doesn’t make the OC/BC legally liable. If the OC/BC is found to be legally liable, it’s strata liability insurance will hopefully will cover all of the damage else they would have to pay for it themselves.
Lot contents are never covered by OC/BC compulsory strata building insurance unless the OC/BC is found to be legally liable. That means lot carpet, curtains, furniture etc and tenant accommodation are not covered. Loss of rent might be covered by some policies.
So I’m not sure the OC/BC would always lose at a Tribunal/Court. It really depends on the details of the event and the circumstances around it.
Have a look at the response from Oldmabb below. A real world experience rather than hypotheticals.
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