- This topic has 2 replies, 3 voices, and was last updated 9 years, 10 months ago by .
-
Topic
-
Our 32 unit strata has received a multi million dollar insurance payout for building repairs.Some owners think that each owner should be credited with 1/32 of the total sum.I believe that ALL owners should all be credited with amounts based on unit entitlements, which vary considerably, as the amount of repairs to each area require.Much of the repair work has been completed.My wife and I wish to sell our unit and think that, as we paid the insurance premium as per our unit entitlement, 40/1000 then we should receive insurance cover as per our unit entitlement 40/1000.Clearly, a two bedroom, one bath, one car space, must be less unit entitlement, than a three bedroom, with spa, en suite to main with walk in robe, two car lock up garage and private roof top area.We know that ALL of the money must be spent on building repairs and remain in the strata fund even if we sell our unit and NOT be paid out to owners.To me it seems that any money remaining for future unfinished repairs should stay with our property title and be passed on to the new future owner, if we find a buyer.
-
Replies
-
Congratulations on achieving that result!
The payout belongs to the owners collectively, i.e. the owners corporation. It is the owners corporation that has the insurance, not the owners severally. Therefore the owners corporation receives the money.
We received a home warranty insurance payout some time ago after an experience with a dodgy builder, it just went into the OC’s funds.
Unit entitlements are not relevant to the apportionment of the money, the money would be spent on the repairs as they are required – to that extent you are correct, the money must be spent on those repairs. However, that would not be determined by entitlement, but by the repairs needed. For example, a smaller unit may need more repairs than a larger unit and if that is the case then those repairs have to be carried out.
If there were any money remaining after repairs had been effected, that would remain in the owners corporation’s funds, and would benefit all the owners as it would offset any future liabilities. In that respect you could say that that benefit would accrue to each owner differently, in accordance with their entitlements.
Scotlandx’s answer is 100% right.