Strata laws in Australia are so full of quirks, loopholes and grey areas, you’d be forgiven for thinking they were written with the sole intention of keeping lawyers in work interpreting them, and former lawyers in clover adjudicating on them in Tribunals.
Take the question of the use of a strata lot resulting in an increase in insurance premiums. Specifically, it’s what happens when the fact that here’s a strip club in the building has tripled the insurance premium.
Section 82 of the NSW Strata Schemes Management Act says this:
- If the use to which a lot in a strata scheme is put causes an insurance premium for the strata scheme to be greater than it would be if it were not put to that use, so much of a contribution payable by the owner of the lot as is attributable to insurance premiums may, with the consent of the owner, be increased to reflect the extra amount of the premium.
Seems fair – if the use of a lot causes an increase in insurance premiums, the lot owner or their tenant should cover the extra cost. But wait a minute – it says “with the consent of the owner”. Is any sane person going to consent to paying the difference. Ah, but part two of the section says this:
- The Tribunal may, on application, make an order for payment of contributions of a different amount to one or more contributions levied or proposed by an owners corporation on an owner if the Tribunal is of the opinion that the owner’s consent has been unreasonably refused under this section.
Okay, so all you have to do is to show the Tribunal that the way the lot is being used is increasing the premiums. But there is another problem – commercial lots have a bigger unit entitlement than most residential lots so they could theoretically, potentially block the strata committee from taking this to NCAT.
Maybe, but then there’s part 3.
- An application for an order under this section may be made by the lessor of a leasehold strata scheme, an owners corporation, an owner of a lot or a mortgagee in possession.
So any owner can raise this at a tribunal, if they don’t want to be subsidising the insurance costs for a commercial operation. Which is all well and good, but shouldn’t it be the other way round?
Shouldn’t the default be that the commercial lot owner pays the difference and if they object to that, then they should have to go to the Tribunal, not the other way round? You can read about the strip club and the insurance dilemma HERE.
Elsewhere on the Forum
- Do I really need a by-law when I’m only moving some pipes in a Laundry reno? That’s HERE.
- Tassie strata owners’ call to action. That’s HERE.
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Tagged: by-law, club, forum, Insurance, premium, reno, Strata, Tasmania
What can owners do when the fact that there’s a strip club in the block causes insurance premiums to triple?
[See the full post at: Forum: Strip club poser for strata scheme]
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
› Flat Chat Strata Forum › Current Page
› Flat Chat Strata Forum › Current Page