body corp and insurance

Hi all,

I'm currently looking at insurance options for a unit I'm about to lease out and I seem to have run into a problem.

The unit is in a group of 4 with just a couple of driveways in between. It's part of an owner's(body) corp according to contract but since it was purchased there was no body corp management nor any fees. I assumed everyone just bought their own building/content insurance and so did I.

Now as I am looking into landlord insurance, I found that the usual insurers don't do building insurance on body corp or cover individual units in it.

So what are my options now?
Does a body corp(group of units) must by law be managed or covered by a single building insurance policy?
or is it still ok to get building insurance individually? if so from whom?

consumer affairs.com seems to suggest body corps only require insurance for the common property and individual lot owners can get further insurance themselves.

any advice is appreciated.

Thank you.
 
I'm no expert, but would assume body corp would have to organize insurance for the building and common areas, unless all units are freestanding, could be an exception.
Otherwise, how would you separate the values and come up with replacement cost for an individual unit?

Can you ask body corp if there is existing insurance in place?
Do you pay strata levies?
 
Hi all,
The unit is in a group of 4 with just a couple of driveways in between. It's part of an owner's(body) corp according to contract but since it was purchased there was no body corp management nor any fees. I assumed everyone just bought their own building/content insurance and so did I.

Now as I am looking into landlord insurance, I found that the usual insurers don't do building insurance on body corp or cover individual units in it.

So what are my options now?
Does a body corp(group of units) must by law be managed or covered by a single building insurance policy?
or is it still ok to get building insurance individually? if so from whom?

consumer affairs.com seems to suggest body corps only require insurance for the common property and individual lot owners can get further insurance themselves.

any advice is appreciated.

Thank you.

If there is common property then it is normally insured as a strata policy and the insurance premium bill is split between the owners.

This may be happening without you knowing it if you just purchased into the complex.

If there is no Corporate Strata Manager then a unit Owner may have been acting as the manager of the BC and getting each owner to contribute.

Regardless of whether there is common property or not , individual owners can insure their properties for Building and Contents and Public Liability, however, if there is common property and individual owners separately insure there will be a 'gap' in their cover (for the common property).

I suggest you do further checks and ensure you have cover for B,C&PL via your own policy or a strata policy and also take out a Landlord Policy as separate standalone cover.
 
Have a look at the Section 32 certificate as it should state the current insurance arrangements in the disclosure.

If nothing is in place then the 4 owners will need to take a Strata Policy to cover the buildings and common areas.

You can then take out a separate Landlords Policy to cover your tenancy.
 
there was strata insurance held by a single owner(owned all 4 units) at the time of the sale(sold all 4 at the same time), but that would've been expired since no fees were paid.

Regardless of whether there is common property or not , individual owners can insure their properties for Building and Contents and Public Liability, however, if there is common property and individual owners separately insure there will be a 'gap' in their cover (for the common property).

I think the easiest would be to just get our own, but I can't seem to find a insurer that'll insure individual units, any suggestions?

I will speak to the rest of the owners regarding insurance for the common property/liability (driveway, couple of mail boxes), don't know how that'll go since its been a few years without it. are the owners legally be required to pay for common property insurance? can they be forced to pay?
 
Seems like there is no active Body Corp set up.
You need to look into this.

What about sinking fees, there should have been a fund set up if all the 4 units were sold individually.
Do you have the strata subdivision details, copy of By-Laws, etc?
 
What about sinking fees, there should have been a fund set up if all the 4 units were sold individually.
Do you have the strata subdivision details, copy of By-Laws, etc?

There is an owner's corp certificate in the s.32. along with a few pages of standard body corp info. no sinking funds according to certificate, but did have owner's corp insurance at time of sale that's now expired.

I think the problem is none of the new owner's including myself understood/ or misinformed about that insurance to renew it. so basically just went our own way and got our own insurance, which I just found out its probably not valid.
 
What happens if there is a major plumbing issue which is connected to all 4 units?
Or somebody vandalises and destroys the letterboxes, fences, major roof problem, etc.

This needs to be covered under the Body Corp building insurance.
If no body corp insurance, who is going to pay for such repairs?
 
after a bit more research, there seems different types titles? strata plan and plan of subdivision? I suppose the question is how to tell which kind of title your property has?.

found some info here http://www.hayproperty.com.au/property.html
if that's correct, mine could be a subdivision of land rather than a strata title

mine has a Plan of subdivision (P.S) but I've seen some called a plan of strata subdivision... not sure if its the same.
 
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How the hell did your Solicitor not pick this up when undertaking the searches.

Sounds like you and the other 3 registered owners might need to be having an urgent chat.
 
In essence there should be a strata building policy in place regardless of whether there is a Body Corporate or not. If there is no Body Corporate this can be organised by one of the owners and a share recouped from each owner. This is definitely a far better option than trying to insure your portion of the building on your own, which would not only be more expensive but leave the common areas uninsured, which could lead to a legal minefield should there be an injury or some other loss.

If this was arranged then you can sort out your landlord insurance including your contents (carpets, curtains etc.) and liability inside your unit yourself.

If you like I can point you to someone to speak to, just let me know what State the property is in so taht I can steer you to the most logical person.
 
Hi woozie,

My understanding is by law a BC/Strata has to be set up.

I looked at a prop with 3 units and a 2 units.BC was setup,no BC fees and owners insured there own places and maintained there own props.Landlord insurance applicable if IP.

Common area was insured only ie:driveway.

Cheers Spades.
 
Hi woozie,

My understanding is by law a BC/Strata has to be set up.

I looked at a prop with 3 units and a 2 units.BC was setup,no BC fees and owners insured there own places and maintained there own props.Landlord insurance applicable if IP.

Common area was insured only ie:driveway.

Cheers Spades.
Don't quote me, I don't know the answer for sure, but someone else in our company said they needed to research a similar thing and in fact found that there is no actual requirement to set up a Body Corporate, but this could also vary by State.
 
Woozie, you need to be taking this to someone in your state that knows what the regulations are to assist. In a public forum, with people from other states, all well meaning, trying to answer questions that you may not even be asking correctly, could inadvertently be sending you in the wrong direction. We have recently sold properties, that were all held by the one owner, and could then give both parties some advice, on where to go to re-establish the body corporate correctly. Perhaps the selling agent could assist as well. But what ever you do, get advice as soon as possible. You do not want to be living in an uninsured property for one minute longer than you have to.
 
This is in Melbourne btw.

There is BC (now called owners corp, at least in VIC) on the property, it has to be setup when the block was subdivided.
The BC did have insurance on all buildings and common property at the time of sale.
Just that when the 4 units were sold off individually to separate owners at the same time, the RE agent told everyone that there's no BC/no Fees ect...

I guess no one understood or cared and just assumed we are to insure our own unit.
I have spoken with consumer affairs and that's actually ok as long as the common property is insured by the BC. Its a legal requirement, you cant sell the unit without it.

The hard part is to find an insurer that will insure a unit, most won't do building insurance on units with a BC. and getting money from each owner for the common property insurance is gonna be a pain.

I suppose this is a lesson for the first time buyers to use a good responsible solicitor to do the conveyancing.
 
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