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Topic
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We (the Owner’s Corporation) lodged a claim under our Home Owner’s Insurance Policy (HOW) on a 7 year old apartment building.
The HOW Insurer has agreed to rectify the defects (mainly leaks in roofs and walls) and has nominated a builder.
The Insurer wants:
Us to enter into a contract with the Builder.
Us to approve the work in stages (Insurer will then pay the Builder).
Us to sign a waiver releasing the Insurer from all further liability.
We are concerned that:
We are not qualified to inspect and approve the work.
If we enter into a contract with the Builder and sign the Waiver, if at some time in the future the leaks re-occur the Insurer will wash its hands and say “go and see the Builder”.
We do not want to employ a Consultant to inspect, as this would cost us considerably and if the work was not done properly we would finish up pursuing both the Builder and Consultant.
We therefore want the Insurer to employ the Builder, inspect and approve the work carried out and take responsibility if the leaks re-appear.
The questions are:
1. Can the Insurer force us to enter into the arrangements it proposes under any Legislation (Our policy is silent on this issue).
2. Is there any convention or Legislation that we can put to the Insurer to argue our position.
Your opinion would be much appreciated.
Regards – Synergy
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Replies
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I was about to write that the obvious thing to do here is to hire a building consultant but you have tied your own hands behind your back by not wanting to use a one.
A building consultant or project manager would not only provide you with the professional expertise and experience but the best of them will have professional indemnity in case of anything going wrong.
Allowing the insurer to choose the builder and then expecting them to ‘police’ them is just giving up too much control for the sake of not wanting responsibility (for something you rightly recognise is not in your area of expertise). Tell the insurer you want them to cover the cost of a “project manager” too, if cost is an issue.
At the risk of being accused of playing favourites (again), your next step should be to click on the IBC ad at the top of the page and talk to Chris Mo’ane about what your options are and how much they will cost.
You have had a big win – getting the remedial work done properly should be your priority.
On the question of the waiver, I don’t think that’s particularly fair as more defects could be revealed when the remedial work is being done. But, once again, you really need someone in your corner who has been down this road hundreds of times before and knows what can and can’t be done. Click on the ad – it won’t cost you a cent.
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.
My block received a payment from HOW for repairs of defects by the builder. The block is about 12 years old.
the insurance payment was about 3 years ago. the money ahs all been spent. Some defects of the same type that were agreed to be covered in the insurance payment, have since come to light in other units. These units weren’t iidentified in the original scope of works.
is there a standard time limit on variations to a payment for defects under HOW?
thanks
Yes. For policies issued before 1 July 2002, the time period in which you can lodge a claim is 7 years after completion of works. For policies issued after that it is 6 years in relation to structural defects.
I am not an expert but if these defects weren’t in the original scope of the claim, then you couldn’t add them on to the original claim. From what you have said, that claim has been finalised.
Jimmy T,
I note your reply to this question – building consultant – project manager? The good ones are few and far between.
I’ll give you an example – I have just tendered on a re-insurance job, they paid out $336k for repairs written by a consultant that wouldn’t have a clue and it failed within the 1st month of work completion.
I have just submitted a report on remedial failures with the scope of work written by the same consultant.
I would suggest to all that they seriously take a look at whom they engage to doo their inspection.
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