Flat Chat Strata Forum Two-unit strata Current Page

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  • #9529
    Bean16
    Flatchatter

      Just wondering about house insurance in a 2 lot strata scheme where each lot’s unit of entitlement is 10/20. I own Unit 2 which is 77m2 inside and the lot is 194m2 overall. Unit 1 is 119m2 inside and their lot is 156m2 overall. At the moment I am paying exactly half of the total house insurance per year. Should I be paying half as my unit of entitlement is 10/20 or should I be paying less than unit 1 because my portion of the house is smaller? Or should I be paying more because my total lot is greater than theirs? Thanks in advance!!

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    • #21677
      Jimmy-T
      Keymaster

        You are paying the correct amount according to strata law because you are paying your share according to your unit entitlements.

        If unit entitlements were based solely on the area of the lot you could have an argument that the UEs are wrong and you should be paying 194/350ths (which is your share of the combined area).  Apart from the fact that you would end up paying more, so there is no benefit in raising the issue, UEs are not based on lot area but on a complex calculation allied more closely to unimproved value. 

        For instance a larger property on the ground floor might have lower UEs than a smaller property upstairs because the higher one could have views. However, even if you got an estimate of real estate potential sale values done now, it would not be accurate because it would include additions, improvements and upgrades.

        This is one sleeping dog that I would let lie.

        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.
        #21682
        Bean16
        Flatchatter
        Chat-starter

          Thankyou Jimmy! That clears that up very nicely. This little dog will definitely lie down on this one! Thanks again for your prompt answer! Cheers!

          #54469
          2lotAU
          Flatchatter

            Just came across this reply and wanted clarification for my own 2 lot.

            Is strata insurance paid based on unit entitlements e.g. 60/40 or 70/30 or its paid 50/50 in a 2 lot residence?

             

            Thanks

            #54471
            Jimmy-T
            Keymaster

              Is strata insurance paid based on unit entitlements e.g. 60/40 or 70/30 or its paid 50/50 in a 2 lot residence?

              It’s based on unit entitlement, which also means that the person who pays more gets to choose the insurer.

              There are exemptions to compulsory strata insurance for two-unit schemes under Section 146 of the Act  provided both owners agree and the buildings are not attached.

              For instance, you might have a an allencompassing insurance policy – car, home and contents, building etc – that would be cheaper than your share of strata insurance.  In that case you’d talk to your neighbour.

              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.
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            Flat Chat Strata Forum Two-unit strata Current Page