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  • #74592
    shedsrus
    Flatchatter

      Our six lot strata is up for insurance renewal for which our Strata manager gained a number of quotes.

      One of our owners asked about the need for disclosure of the two (2) holiday lets within our complex, which led to our manager going to the quoting insurance companies to ask their opinion.

      Result: all quotes off and new quotes to be supplied with a rough estimate given by one company of an increase of potentially 25% to the cost.

      My understanding from previous years has been that there was no additional charge based on useage, as holiday lets were considered as normal ‘residential’ use. And certainly the legislators have said OC’s cannot discriminate against STHL lots in any way.

      Does anyone have any recent experience with hefty increases due to STHL activity undertaken by lot owners?

      Where do I find further information on this?

      Has STHL now become a ‘commercial activity’ different to residential letting?

      • This topic was modified 1 month, 1 week ago by .
    Viewing 12 replies - 1 through 12 (of 12 total)
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    • #74616
      Jimmy-T
      Keymaster

        And certainly the legislators have said OC’s cannot discriminate against STHL lots in any way.

        Where did they say this? I don’t recall STHL properties being given such blanket immunity from costs associated with their usage.  I’d be grateful if you could point this out.

        On the other hand, the Act (Section 82, below) says if the change of use of apartments causes your insurance premiums to rise, the owners can agree to pay the difference or may be compelled to do so by the tribunal on application by the OC or another owner.

        It seems you have clear evidence that the Airbnbs have caused your insurance to increase, so the ball is in your OC’s court. If I were an owner in your block, I’d be filing my application for mediation as soon as I got the inflated insurance quote.

        82   Individual contributions may be larger if greater insurance costs

        (1)  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.

        (2)  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.

        (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.

        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.
        #74628
        UberOwner
        Flatchatter

          I think you’d be approaching the owners first to get their agreement. There’s no need to pay for mediation or the Tribunal if the owners agree to stump up the extra costs. They might choose to do that rather than fighting you through the Tribunal (or mediation) which takes time and additional money, especially if they are supplied with a copy of that section of the legislation. 

          #74630
          Jimmy-T
          Keymaster

            I think you’d be approaching the owners first to get their agreement.

            Yeah, I skipped that option, exposing my misanthropic tendencies. That would indeed be the first and best approach. Interesting, though, that there is this widespread and mistaken belief that you can’t do anything about Airbnbs in your block.

            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.
            #74758
            Small strata wiz
            Flatchatter

              Recently I looked at alternative quotes for our Strata Insurance. Some friends recommended a company, well known, but only new to strata insurance. They sounded competitive, and they only insured strata complexes with 10 or less units. Perfect for us.

              Then I saw, very clearly highlighted on their website, the following statement:

              “WE DON’T COVER: We don’t cover your building if the building, or a unit, is used for short term rental, holiday rental or house sharing. This includes if a unit is available through Airbnb or Stayz.”

              That should ring a few alarm bells.

              #74756
              ianjones
              Flatchatter

                The problem here is how the extra premium is defined and on what scale. There are numerous variables when it comes to underwriting strata insurance and this scenario could be applied to commercial tenancies which may attract a higher rate of premium. It is unusual that a strata insurer would blatantly increase a premium by 25% because of a few short term lettings or an Airbnb and insurers do have a tolerance for such matters when they rate the property in the first place. I have never come across that scenario before and if an insurer dictated an increase in premium for a portion of short termers I’d get it removed, look at an increased excess option for short termer claims or use another insurer. Some insurers do not even ask about short term rental/holiday let or Airbnb.

                #74899
                TrulEConcerned
                Flatchatter

                  A year ago in NSW I asked one owner if he’ll pony up the additional premium if we renew the strata insurance noting he is engaged in STHL.

                  My inquiries with several insurers revealed that (a) STHL, for any period of time, will increase the premium charged and (b) the quantum of the increase is directly related to the number of lots engaging in STHL.

                  #74905
                  Jimmy-T
                  Keymaster

                    Just as an observation, increasing the insurance premiums because there are Airbnbs in the block makes perfect sense.  Wear and tear and damage is likely to increase and with a turnover of strangers so is the likelihood of accidents and personal injury.  Can anyone name an insurer who does this?  The floor is open on this one.

                    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.
                    #75026
                    shedsrus
                    Flatchatter
                    Chat-starter

                      In this instance, I approached one of the STHL owners on the subject and they immediately removed their property from all sites as they were moving into it full-time. This brought us below the 20% nominated threshold and thus the original quotes were reinstated.

                      Problem solved…..for now.

                      During this process I became aware of a strata in our area which had indeed, created bylaws covering this insurance topic and adding an additional one requiring owners to nominate their lot as their principal place of residence in order to STHL it.

                      All this seems to be a perfect result but our strata manager has provided legal opinion that indicates there are problems with these bylaws and as far as is known none have been challenged to a tribunal to prove one way or the other.

                      Bottom line is…..there is no bottom line as yet.

                      • This reply was modified 1 week, 3 days ago by .
                      #75033
                      Jimmy-T
                      Keymaster

                        For some reason I no longer get notified of responses to my FlatChat post, even though the box is ticked, as has happened previously and I therefore assumed the topic was of no interest. Also, I no longer receive my weekly update email of new topics and stories.

                        No idea what has happened but it sounds like your email address may have been lost or corrupted at this end or your email server has misidentified emails from us as spam.  I will investigate.  If anyone else has had this issue, please let me know. meanwhile I have sent you a password update link.

                        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.
                        #75041
                        shedsrus
                        Flatchatter
                        Chat-starter

                          Please see attached article on Bannerman’s view on how far can we go with STHL bylaws.

                          My interpretation is, every level of government appears to have the ability to create a regulation, which can then be nullified by each and/or every other level if they see fit, with it being not until we get to a tribunal that any sort of a precedence is created to give it validity.

                          Or have I got that wrong?

                          • This reply was modified 1 week, 3 days ago by .
                          #75046
                          Jimmy-T
                          Keymaster

                            During this process I became aware of a strata in our area which had indeed, created bylaws covering this insurance topic and adding an additional one requiring owners to nominate their lot as their principal place of residence in order to STHL it.

                            I don’t understand this.  If the owner is using the lot as their residence, then they can only be listing some rooms but not the whole property for STHL.  If they are letting the whole property as STHL but saying they are living there to by-pass by-laws, state laws or insurance rules, then they are providing false information.  And none of that will amount to a hill of beans until another resident complains that the property is being let illicitly or, even worse, a substantial insurance claim is made and the insurer turns around and says the scheme misled them on the STHL usage and the whole cover is invalidated.

                            The Bannerman piece is absolutely clear – if you want your airbnb property to side-step STHL rules, laws or by-laws, you have to live in it while you have guests.  Also, have a listen to our other strata legal sponsor David Sachs in our podcast this week where he discusses this subject in depth.

                            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.
                            #75047
                            Jimmy-T
                            Keymaster

                              There’s a general principle that Strata Law is inferior to all other legislations and regulations (although that may be a little broad in its sweep). For instance, you can create a by-law that people must not leave their vehicles on common property but other laws say you can’t move offending vehicles and the police won’t do anything even though they can if a car is blocking a private driveway.  We are at the very bottom of the legislative totem pole.

                              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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