There’s no such thing as coincidence in strata, we reckon, just a convergence of circumstances and probabilities.  Or, to put it another way, we are all in the same boat with the same problems and sometimes they all come together.

So it was no surprise when a question from a Flatchatter about water damage from one flat to another arrived the same time as the following excellent guide to flood damage between units, from the Unit Owners Association of Queensland (UOAQ).

The UOAQ is the Queensland equivalent of the southern states’ Owners Corporation Network (OCN) and even though they operate under different legislation – and suffer the legalised corruption of the pre-sale of management rights, which is illegal in other states – most of their rules and regulations are pretty similar if not exactly the same.

This week they have sent members a summary of what to do when a flood in one unit affects another area of the building, be it one or multiple lots, or common property.

It’s well worth a read to explain the basics, but if you are not in Queensland, and you have a leak or flood issue, check with local sources before you type the first letter of your next angry email.

Water on the Brain

Water damage claims account for around 40 percent of strata insurance claims, yet they remain one of the most misunderstood issues for committees and lot owners.

When water travels from one lot to another, or into common property, confusion often arises around who is responsible, what insurance covers, and who ultimately pays.

Why this is often misunderstood

In many cases, water damage is linked to maintenance issues such as:

• Aging pipes or flexi hoses
• Failed waterproofing membranes
• Roof leaks
• Gradual deterioration or wear and tear

Not all of these issues are visible or preventable, which is why disputes between owners can arise even where no one intended the damage.

Maintenance vs insurance

A key distinction in strata is:

• Maintenance is the responsibility of the lot owner
• Insurance is the responsibility of the body corporate

If a leak originates within a lot:

• The owner is responsible for fixing the source of the leak
• This cost is generally not covered by strata insurance

However:

• Resulting damage to insured building elements may still be claimable under the strata policy

What actually happens when a leak affects another lot

Where water damage impacts another lot or common property:

• The originating owner must repair the cause of the leak
• The damage to building property can be addressed through a strata insurance claim

What does insurance cover?

Typically covered:

• Sudden and accidental damage
• Resulting water damage to insured building elements

Not typically covered:

• Repair of the failed component itself
• Wear and tear or deterioration
• Gradual damage over time

A common misconception is that negligence voids a claim. This is not correct. Many claims still respond where the event is sudden and accidental, even if greater care could have been taken.

Who pays the excess in Queensland?

Queensland legislation provides specific guidance on this issue.

Where a claim affects:

• Two or more lots, or
• A lot and common property

The body corporate is responsible for paying the excess.

However, the legislation also allows for:

• The committee to determine it is reasonable for an owner to pay the excess, often where the leak originated from that lot

This decision is typically made based on the circumstances of the claim and the cause of the damage.

What if the damage is below the excess?

If:

• No claim is made, or
• The damage falls below the policy excess

The matter becomes a private issue between owners.

This may involve:

• Direct negotiation
• Insurance claims under contents or landlord policies
• Tribunal or legal processes if agreement cannot be reached

Do you have to lodge a claim?

No — you are not required to lodge an insurance claim.

If your lot has been damaged due to a leak from another lot:

• You may choose to repair the damage yourself, and
• Seek recovery from the owner where the leak originated

This approach can lead to delays and uncertainty:

• The other owner may dispute responsibility
• Their insurer may deny liability, for example, where the event was sudden, unforeseen, and could not have been prevented — such as a burst pipe in a concealed space
• The owner where the leak originated may have an insurable interest in the strata policy and choose to lodge a claim anyway
• Recovery is not guaranteed

Where damage has occurred to insured property, it is generally recommended to lodge a claim under the policy that insures the property, such as strata insurance.

This can help:

• Progress repairs faster, and
• Avoid delays associated with liability disputes

Strata vs Contents Insurance

Simple rule:

• Strata = Building
• Contents = Personal property

Example: Dishwasher or washing machine leak

• Damage to walls, cabinetry, flooring → Strata insurance
• Damage to carpet, furniture, belongings → Contents insurance

In many cases, both policies may respond.

Common Examples

• Damage within one lot (below excess): A leak occurs in your lot causing minor damage — you fix the leak and generally cover the building damage yourself.
• Damage within one lot (above excess): A leak occurs in your lot causing significant damage — you fix the leak, lodge a strata claim for building damage, and are typically responsible for the excess.
• Damage to an adjoining lot (below excess): A leak occurs in your lot and damages an adjoining lot — you fix the leak, and the affected owner may seek recovery from you for building damage. You may refer this to your contents or landlords insurance for a liability claim.
• Damage to an adjoining lot (above excess): A leak occurs in your lot and causes significant damage to an adjoining lot — you fix the leak, a strata claim is typically lodged, and the body corporate may require you to pay the excess.
• Damage to multiple lots or common property: A leak occurs in your lot causing widespread damage — you fix the leak, a strata claim is typically lodged, and the body corporate pays the excess, which may be recovered from you depending on the circumstances of the leak.

Final thought

Water damage between lots is rarely straightforward.

Understanding the difference between maintenance and insurance, and knowing how excess and responsibility are determined in Queensland, can make a significant difference to how smoothly these situations are resolved.

Disclaimer

This guide is intended for general informational purposes only. It provides a high-level overview of common principles relating to water damage claims in strata, but does not take into account specific circumstances, legislation, or policy variations. All claims are assessed on their individual merits and in accordance with the relevant insurance policy terms, conditions, and exclusions. Nothing in this guide should be interpreted as providing certainty of cover or a guarantee of claim outcomes. Where uncertainty exists, professional advice should be sought.

If you would like a review of your building insurance [in Queensland], then contact he**@******rg.au.

Please participate in the UOAQ financial study by sending your latest AGM notice of meeting to he**@******rg.au, such that you can review a comparison of your scheme finances, including insurances, with other similar schemes.

Send an email to the Attorney General at at******@*****************ov.au and request that any reform of the BCCM Act should follow the ACCC recommendations to eliminate the 20% insurance commissions and move to a fee-for-service model.