Strata insurance provides you with the confidence to live freely amid strict Australian strata rules.
Strata living has become increasingly popular in Australia, particularly with the rise in apartment and townhouse living. We’re noticing a rapid increase in the number of apartments and townhouses being built in major cities such as Brisbane and Perth.
Shared living spaces come with shared responsibilities among their tenants, landlords, and other individuals involved, brewing a scenario for increased disputes, fights, and other hostile issues. These disputes often result in severe consequences, leading to legal battles and financial liabilities.
To avoid these conflicts, this blog will clarify how strata insurance can help resolve issues and distribute responsibilities among apartment residents fairly and equitably.
What Does Strata Mean?
The term ‘strata’ loosely means ‘to layer’, so in real estate, it refers to living spaces stacked on top of each other, such as apartments, townhouses, and other forms of shared living. For example, couples, families, and even students living in the same building but owning different units comprise a strata living situation.
Although it’s a condensed form of living, it comes with its own set of rules and challenges for property owners. Strata management has been in existence for over 50 years, and Australian society is still adapting to the concept of strata living due to its complex nature.
A strata development plan is composed of:
- Residential areas like apartments
- Retails
- Mixed-use of shops with apartments on top
- Retirement villages
What Is Strata Insurance And How Does It Work
Strata insurance covers buildings that are a part of an owner’s corporation or strata title. You can sometimes refer to it as body corporate insurance. For multi-unit structures, such as flats, townhomes, and business complexes, strata insurance is a crucial necessity.
The biggest concern for getting strata insurance is its ability to resolve disputes. Although it does not directly solve them, it provides a mechanism that addresses legal liabilities and agreements for property damages, leaks, and other concerns.
What Does Strata Insurance Cover?
Strata insurance covers common areas in a shared building that falls under the strata scheme. Here’s a small list to give you an idea:
- Common areas such as stairwells, elevators, and gardens
- Structure of the building, comprising exterior walls, roofs, and floors
- Building components that are fixed, like the air conditioning, electrical, and plumbing systems
- Legal responsibility for third persons’ harm or property damage on shared property
In the event of third-party involvement, residential strata coverage from companies like Chu Insurance can help mitigate risk in multi-party lawsuits.
What Are the Common Legal Issues In A Strata Scheme?
Not everyone can live in harmony. Although most of us should try to get along with our fellow tenants, landlords, and business partners, some issues may arise in one way or another.
Some of the common legal issues that can escalate into heated disputes among property owners and landlords include bylaws, standard property maintenance, financial matters, noise complaints, water leaks, property damage, injuries in shared spaces, and misuse of common areas.
How Insurance Solves Apartment Disputes?
Now that we’ve covered all the key aspects, it’s time to delve into the central aspect of how strata insurance can resolve disputes. Here’s a breakdown of what to expect:
Covering Legal Liability
If an owner, tenant, or visitor is injured in the common shared space, including stairwells, elevators, or the pool, the issue of who is responsible arises most frequently. Therefore, in this scenario, the strata insurance public liability coverage may respond.
They can help cover the legal defence costs, pay compensation IF the strata corporation is found liable, and reduce any financial stress in the situation.
Common Property Damage
In case of burst pipes, accidental fires, or water ingress, if the dispute remains unsettled, strata insurance usually covers:
- Repairs to common property
- Associated legal fees in case the owner challenges claims
- Restoring common areas without any arguments
Sets Responsibilities And Scope
A strata insurance policy can help clarify what is ‘common property’ and what is individual lot property. This can help settle disputes over maintenance and damages while also serving as a reference point in legal or tribunal hearings.
Sometimes, legal conflicts in a strata community are unavoidable. However, your financial dependency shouldn’t be a concern. Although the rise of apartments and strata living is at an all-time high, learning the law, rights, and insurance policies should be your priority.
Being educated about the governing laws can help save your case in tribunal hearings, and in most cases, you won’t even have to enter the court. Strata insurance provides you with the confidence to live freely amid strict Australian strata rules.
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