Strata Schemes Management Act 2015 No 50
Part 9 Insurance
Division 1 Owners corporation insurance obligations
160 Owners corporation to insure building
(1) The owners corporation for a strata scheme for the whole of a building must insure the building and keep the building insured under a contract of insurance, in accordance with this Division, that insures the building if it is destroyed or damaged by fire, lightning, explosion or any other occurrence specified in the policy (a damage policy).Maximum penalty—5 penalty units.(2) The owners corporation for each strata scheme for part of a building and any other person in whom is vested an estate in fee simple in part of the building that is not included in the parcel of the strata scheme must insure the building and keep the building insured under a damage policy.Maximum penalty—5 penalty units.(3) In any proceedings for an offence under subsection (2), it is a defence to establish that the defendant was willing to join in the insurance of a building under a damage policy but that the policy could not be taken out because another person specified in that subsection was unwilling to join in the application for that policy.(4) This section does not apply to an owners corporation for a strata scheme comprising 2 lots if—(a) the owners corporation so determines by unanimous resolution, and(b) the buildings comprised in one of those lots are physically detached from the buildings comprised in the other lot, and(c) no building or part of a building in the strata scheme is situated outside those lots.(5) A damage policy may consist of one or more policies of insurance.
161 Requirements for damage policy
(1) General requirements The damage policy for a building must be with an approved insurer, be in the name of the owners corporation, and any other person required to insure under section 160 and provide for the following—(a) the building is to be insured for at least the amount determined in accordance with the regulations,(b) if the building is destroyed, the building is to be rebuilt or replaced so that the condition of every part of the rebuilt or replacement building is not worse or less extensive than that part when new,(c) if the building is damaged but not destroyed, the damaged part of the building is to be repaired or restored so that the condition of the repaired or restored part is not worse or less extensive than that part when new,(d) expenses incurred in removing debris are payable,(e) the remuneration of architects and other persons whose services are necessary as an incident to the rebuilding, replacement, repair or restoration is payable.(2) Limited sum liability Instead of providing for work and payments being made if a building is destroyed or damaged, the damage policy may limit the liability of the insurer in that event to an amount specified in the policy. The amount must not be less than an amount calculated in accordance with the regulations.(3) Parts of building to be covered The parts of a building to be covered by a damage policy include the following—(a) owners’ improvements and owners’ fixtures forming part of the building,(b) a building consisting entirely of common property,(c) anything prescribed by the regulations as forming part of a building for the purposes of this section.(4) Parts of building not required to be covered The following parts of a building are not required to be covered by a damage policy—(a) fixtures removable by a tenant at the expiration of a tenancy,(b) owners’ improvements and fixtures comprising paint, wallpaper and temporary wall, floor and ceiling coverings,(c) anything prescribed by the regulations as not forming part of a building for the purposes of this section.
162 Insurance premiums where strata scheme is for part only of building
(1) This section applies if a requirement is imposed on an owners corporation for a strata scheme for part of a building and any other person to insure the building under a damage policy.(2) The premium for a damage policy is to be paid by the owners corporation or other person according to the proportion that the replacement value of the part (or parts) of the building subject to the strata scheme or held in fee simple by the other person bears to the replacement value of the whole building.(3) The Tribunal may, on application by an owners corporation or other person liable to pay a proportion of a premium, determine the replacement value and proportion payable. The determination is binding on each person liable to pay a proportion.(4) The Tribunal may, on application by any person liable under this section to pay a proportion of a premium, make an order adjusting the proportion payable by a person to reflect that the use to which a part of a building in which that person has the fee simple is put causes an insurance premium under this section to be greater than it would be if it were not put to that use.
163 Use of insurance money by owners corporation
(1) An owners corporation that receives money from an insurer for the destruction of or damage to a building must immediately apply that money in rebuilding, replacing, repairing or restoring the building.(2) This section does not apply to an owners corporation if the owners corporation determines, by unanimous resolution, that the money is not to be so applied.(3) This section is subject to any order made under the Strata Schemes Development Act 2015.
164 Other mandatory insurance requirements for owners corporation
(1) An owners corporation must take out the following insurance with an approved insurer, in addition to any other requirements of this Part—(a) insurance in respect of any occurrence against which it is required by law to insure, including any insurance required by the Workers Compensation Act 1987 and the Workplace Injury Management and Workers Compensation Act 1998 to be taken out,(b) insurance in respect of damage to property, death or bodily injury for which the owners corporation could become liable in damages,(c) insurance against the possibility of the owners becoming jointly liable because of a claim arising in respect of any other occurrence against which the owners corporation, in accordance with a special resolution, decides to insure,(d) insurance against any damages for which the owners corporation could become liable because, without fee or reward or any expectation of fee or reward, a person acting on behalf of the owners corporation does work in a building or on the common property in the strata scheme,(e) insurance of any other class prescribed by the regulations for the purposes of this subsection.Maximum penalty—5 penalty units.(2) Insurance taken out in accordance with subsection (1) (b) must be for a cover of not less than $10,000,000 for each event for which any claim or claims may be made or, if the regulations provide for another amount, that other amount.(3) The regulations may provide that the amount is to be calculated or determined in the manner prescribed by the regulations.
165 Owners corporation may take out other insurance
(1) An owners corporation may insure any property that it is not required to insure by this Part and in which it has an insurable interest.(2) An owners corporation may take out insurance, at its own expense, in respect of any of the following—(a) damage to property, death or bodily injury for which a person holding the office of chairperson, secretary or treasurer of the owners corporation or of a member of the strata committee of the owners corporation could become liable in damages because of an act or omission, committed or omitted in good faith, in performing the functions of that office,(b) misappropriation of money or other property of the owners corporation.(3) Any insurance taken out under this section must be taken out with an approved insurer.
166 Strata managing agent to obtain insurance quotations
A strata managing agent must provide the owners corporation with not less than 3 quotations from different providers for each type of insurance proposed by the agent to the owners corporation or provide written reasons to the owners corporation if less than 3 quotations are provided.
Division 2 Insurance claims and other matters affecting insurance
167 Part does not limit owner’s insurance rights
(1) This Part does not limit any right of an owner of a lot in a strata scheme to take out insurance.(2) Insurance taken out by an owner of a lot in a strata scheme does not affect, and is not to be taken into consideration in determining, the amount payable to an owners corporation under a contract of insurance entered into between it and an insurer in accordance with this Part. This subsection has effect despite anything contained in the relevant contract of insurance.
168 Insurable interests
(1) A person (including an owners corporation) is taken to have an insurable interest in the subject-matter of a contract of insurance entered into by the person in accordance with this Part.(2) The owner of a lot is taken to have an insurable interest in a building comprised in the lot while the building is subject to a determination referred to in section 160 (4).(3) This section applies despite the provisions of section 23 of the Imperial Acts Application Act 1969 or any other law relating to insurance.
169 Insurance of mortgaged lot
(1) An owner of a lot in a strata scheme may take out insurance in respect of damage to the lot for an amount equal to the amount secured at the date of the contract of insurance by mortgages of and any covenant charges affecting the lot.(2) The following provisions apply to the payment of an amount under the contract (subject to the terms of the contract)—(a) any payment to be made by the insurer in respect of damage must be made to the mortgagees and any covenant chargees whose interests are noted in the contract in order of their respective priorities,(b) the amount must be the amount stated in the contract, the amount of the loss, or an amount sufficient, at the date of the loss, to discharge mortgages of and any covenant charges affecting the lot, whichever is the least amount,(c) if the amount paid by the insurer equals the amount necessary to discharge a mortgage of the lot, the insurer is entitled to an assignment of that mortgage,(d) if the amount paid by the insurer is less than the amount necessary to discharge a mortgage of the lot, the insurer is entitled to a sub-mortgage of that mortgage to secure the amount paid on terms and conditions agreed on as provided by subsection (3) or, failing agreement, on the same terms and conditions as those contained in the mortgage by the owner.(3) For the purposes of subsection (2) (d), any insurer and mortgagee may at any time, whether before or after a contract of insurance referred to in subsection (1) has been entered into by an owner of a lot, agree on the terms and conditions of the sub-mortgage.(4) The contract of insurance is not liable to be brought into contribution with any other such contract of insurance except another contract of insurance that is in respect of damage to the same lot and relates to the same debt.
170 Insurance claim where owner at fault
If an insurer of an owners corporation accepts a claim by the owners corporation based on an act or omission by an owner of a lot in the strata scheme, the insurer has no right of subrogation in relation to the owner based on that act or omission unless it is proved that the act or omission was wilful.
171 Action against owners corporation by owner
An owner of a lot may bring any action against the owners corporation of which the owner is a member that the owner might have brought against the owners corporation if the owner had not been such a member.
Division 3 Orders about insurance
172 Exemption by Tribunal from building insurance requirements
(1) The Tribunal may, on application by a person required by this Part to insure a building or structure, by order exempt the applicant—(a) from compliance with the requirements to insure unconditionally, or(b) with the written consent of the applicant, from compliance with those requirements subject to a condition that the applicant takes out insurance for the building that is specified in the order.(2) The Tribunal must not make an order unless—(a) it is of the opinion that compliance with the requirements to insure is unnecessary or impracticable, and(b) each other person required to insure the building has consented in writing to the making of the order or has, before the making of the order, been given an opportunity to make representations to the Tribunal with respect to the application for the order.(3) An owners corporation may apply for an order, or give a consent for the purposes of this section, only in accordance with a unanimous resolution.(4) If an owners corporation is required by a positive covenant to insure the building, an order must not be made until—(a) at least 21 days after the Tribunal has given notice to the authority having the benefit of the covenant of the intention to make the order, and(b) the Tribunal has considered any representations made during the 21-day period to the Tribunal by the authority in relation to the intended order.
173 Effect of exemption from building insurance requirements
(1) A person exempted by the Tribunal from the requirement to insure a building is not under a duty to comply with the requirement or any corresponding requirement of a positive covenant.(2) However, if the exemption was granted subject to a condition, the person is under the duty, if in breach of that condition.
174 Order to make or pursue insurance claim
(1) The Tribunal may, on application, order any person who is entitled to the benefit of insurance taken out under this Act to make or pursue an insurance claim in relation to damage to the building or any other property to which the insurance relates, if the Tribunal considers the person has unreasonably refused to make or pursue the claim.(2) An application for an order may be made by any of the following—(a) an owner or tenant of a lot in the strata scheme for the building or part of the building,(b) the lessor of a leasehold strata scheme for the building or part of the building,(c) if part of the building is included in a part strata parcel, any person in whom is vested an estate in fee simple or a leasehold estate, registered under the Real Property Act 1900 in any part of the building or its site that is not included in a part strata parcel.
175 Orders requiring damage policy
(1) The Tribunal may, on application, order that a damage policy must be taken out for a specified amount, if the Tribunal is satisfied that there is a dispute about the amount for which any such insurance should be taken out or the proportions in which the premium should be paid.(2) The order may require insurance to be taken out in accordance with the order for a period of up to 90 days, but does not affect the requirement made by this Act to keep the building insured after that period.(3) The Tribunal may, on application, order that the amount of any insurance taken out for a damage policy or under section 164 (1) (c) must be varied to a specified amount, if the Tribunal considers that the amount of the current insurance is unreasonable.(4) An order must specify by whom the insurance is to be taken out or varied and (if the building is included in a part strata parcel) the proportions in which the premium is to be paid.(5) An application for an order under this section may be made by any of the following—(a) an owner or a mortgagee of a lot shown on the strata roll, or a person having an interest in a lot, in a strata scheme for the whole or any part of the building concerned,(b) the lessor of a leasehold strata scheme for the building or any part of the building concerned or by any owner or sublessee of the common property,(c) if part of the building is included in a part strata parcel, any person in whom is vested (or who has an interest in) an estate in fee simple in any part of the building or its site that is not included in a part strata parcel or any mortgagee under a mortgage registered under the Real Property Act 1900 of any such estate or interest,(d) an authority having the benefit of a positive covenant affecting the building or its site.