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Can anyone advise if the EC/OC face OFT mediation, it can be reimbursed by the strata insurance? If so on what basis is it reimbursed?
Many thanks
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The Application Fee is $76 and representation is not normally permitted (or necessary) so in the absence of further detail I’m uncertain about what your O/C would be seeking a reimbursement of (?). If you can elaborate I’m sure that the forum posters will assist.
It all depends on what it says on the policy and/or the inclination of the insurer. Some insurers will pay for things that aren’t specifically covered by the policy as an act of goodwill. There is no law against it.
But, for instance if an Owners Corp was taken to the CTTT by an owner and the insurance covered legal fees, then that would be perfectly legitimate.
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.
It will be obvious that I do not know anything about Strata insurance, but, I know that if I make a $76 claim against my home or car insurance policy, my insurance cost would skyrocket when the renewal date came up.
Maybe O. C.’s pay the highest premium all the time because there are always claims?
Just wondering.
We had the misfortune to have to attend a mediation where the other party brought along two lawyers, so we had to bring one too. That was a complete waste of time and money. It wasn’t covered by insurance.
It is difficult to answer your question without knowing what the mediation was about. Usually insurance doesn’t cover general legal costs, but it does cover specific instances including office bearers’ liability and OHS claims. As Jimmy said, an insurer may make a smaller one-off payment, but that can contribute to higher premiums.
There should be something in the EC minutes re the mediation, as the EC has to resolve to attend the mediation and those attending have to be authorised to agree to whatever is agreed there.
I am not so sure reimbursement of legal costs would be accounted for as revenue.
Justsaying – So your query is actually about how the matter of a legal expense and any resultant reimbursement arising from an insurance claim for that is shown on your Plan’s Accounts.
As a Chartered Engineer who used to know something about chemical manipulations as opposed to those of the accounting variety, I can only tell you how I would show that on our Plan’s Accounts, and that’s by showing the amount spent as what it is, in your case “legal costs” under Expenses, and the amount of any reimbursement as “insurance claim” under Income. The difference in the amounts would be calculated by readers (but not shown) as the Excess on the insurance claim.
The costs for the Strata Manager (we don’t have one) to “administrate” in the example you gave would I imagine be shown under “disbursements” on the Plan’s Accounts and not be included in the “Contract” (i.e. the Strata Management Agency Agreement).
Just a brief follow-up with regard to your O/C’s proceedings at the Tribunal. I’ve been down that road on 4 occasions and have never come across any legal people, including the Adjudicator, and so far as I’m aware legal or indeed any other “representation” for the Parties is actively discouraged.
So I don’t know why your O/C was represented at that stage of the proceedings, but I do know that save any ex-gratia or other discretionary arrangements, our Plan’s Insurance only covers a legal defense, involves a much higher Excess (x 5), and is only claimable if the Insurer’s been advised in advance of an intent to engage the lawyers AND they’ve been provided with a copy of the Minutes of an E/C or O/C Meeting that approved the expense IF that’s estimated to exceed the lesser of $12.5k or $1k/Lot as prescribed in the Act (in NSW).
thanks very much Whale! You understand the situation very well and that is exactly how I expect the annual statement to appear…. Both SM and EC has had a “please explain”…. typically no response.
The mediation was simple. After years of requesting work to repair a property it went to mediation. The EC (2) appeared with legal representation. I assume it was because of the lack of knowledge by the EC to understand their obligations and to avoid it if possible. Certainly their lawyers tried their best to limit the work.
P.S only one section was repaired leaving part of the area not only not repaired but a damaged section because of the standard of work by the contractors….no amount of protest made a difference, the EC still refuse to attend to their obligations under the Act.
I can understand why owners attend to their own maintenance etc when clearly some of these “willing and well meaning volunteers” simply make it impossible. It’s cheaper, quicker and less stressful to pay for the work then to fight with some ECM
cheers
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