Professionally managing Defects and Maintenance & Repairs now take up a considerable portion of Strata Manager’s time, at an increasing cost to Owners.

Over the past fifteen years there has been a significant increase in non-compliant building practices (i.e. works not meeting the Building Code), and more recently non – compliant building products (for example the much published imported Cladding, fitted to thousands of buildings throughout Australia.

Keeping on top of your property insurance and being pro-active in your strata corporation can lead to some very welcome savings when you’re an apartment investor. This article was authored by CHU and shows their top five money-saving tips for landlords.

A broker has recently made some public statements of concern with how StrataRatings operates and this post will respond to each of these concerns. The original comment can be found here.

Let’s firstly identify the flow of cash to understand any financially driven biases.

Broker: Gets paid commission (usually 20%) when an Owners Corporation places a policy through them. Therefore, are incentivised to encourage schemes to use their Broking services.

StrataRatings: Gets paid a flat licencing fee ($1,250/qtr) from insurers when they use StrataRatings logos in their marketing. No incentives exist as to who with and how schemes place their policies.

Since the 2018 StrataRatings awards many strata insurers have taken it upon themselves to update their policies which is fantastic news for consumers.

In the Residential category, 32% of policies were updated and in the Commercial category a whopping 38% of insurers went ahead with upgrades.

When a dispute between a unit owner and Owners Corporation arises, it is easy for the Strata Committee to cease communicating with the unit owner once they have made their decision. After all, it’s a painful task to continue to talk about a ‘resolved’ (in the eyes if the OC) issue.

From the unit owner’s perspective however, getting stonewalled by the Committee doesn’t mean the issue goes away. It’ll usually bring forward the realisation that they have little option other than to take legal action.

Strata Insurance in Australia provides cover not only for common property but also for items owned by unit owners. Each state’s strata legislation defines a minimum of what is to be covered and all policies on the market will include this and then some.

Some unit owner items that are covered include kitchens, bathrooms, internal doors and walls, built-in cupboards, shelving and essentially anything else within a unit that is permanently attached to the structure. Some exclusions do apply however.

Owners Corporations that have identified their building contains flammable cladding, whether proactively or by Council inspection are placed in a tough predicament.

In most cases the cost to tear down this cladding and replace with non-flammable cladding is substantial so many schemes will consider two options:

1.       Accept the higher risk of fire spreading and take no action.

2.       Burden the scheme with significant debt and rectify the issue.

The recently released National Strata Data Report published by UNSW gave us a few figures to help understand some values and costs of strata insurance.

They found the following:

CHUiSaver have recently provided its customers with the option of an additional section titled ‘Lot Owners’ Fixtures and Improvements’.

But wait, does this mean that the fixtures in my unit are not covered by the strata policy unless this box is ticked?!

From March 1st, if you insure your residential strata property with CHU you will do so under their newest policy wording.

CHU’s summary of key changes can be found here but please, for the love of strata, take the time to read the full wording!

In this article we will outline the five changes that will have the biggest impact for policy holders.