14 Apr The Importance of Maintenance in Strata Buildings
The Importance of Maintenance in Strata Buildings
Steadfast Group has provided feedback on a common theme that keeps re-emerging in Residential Strata claims.
A poor standard of maintenance and known maintenance defects are a major contributor to or cause of losses, particularly in older strata buildings. This has come up a number of times recently in Public Liability claims where the incident was caused by the poor condition of the building.
In two of the claims the body corporate was aware of significant defects in the building prior to the accident but voted against spending the money required to remedy the defects. In another claim, there had been a series of water damage claims in the building in the one year caused by leaks but the body corporate was not prepared to spend the money to remedy the cause of the leaks.
Ken Masina, Head of Claims, commented, “By not being proactive and investing in the up-keep of the building comes with its risks, one of which can be a legal suit brought by a lot owner due to the failure and negligence of the body corporate to remedy the defects in a timely manner. ”
“The implementation of a property maintenance plan is key to reducing the Owners Corporation’s exposure against property damage claims, as well as legal liability related claims.”
“Non-rectification to existing defects will likely affect Property Damage claims due to exclusions in policy wording similar to the below example;
We will not pay for Damage caused by or arising directly or indirectly from:
…lack of maintenance, rust, oxidation, corrosion, mould, Wear and Tear, fading, concrete or brick cancer, developing flaws, wet or dry rot, gradual corrosion or gradual deterioration or, failure to maintain Your Insured Property in a reasonably good state of repair. This includes when the damage to the Insured Property is caused by light, air, sand, the climate (which includes wind or rain) or the passage of time;…”
You must advise your broker immediately of any defects or maintenance issues and not wait, for example, until a claim is made. Insurers have continued to tighten their underwriting criteria around building maintenance and will continue to tighten those criteria. You could find that buildings that do not meet those criteria will find it difficult to obtain insurance or to have a claim accepted.
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