Insurance

A strata company must ensure all insurable assets of the scheme are insured against fire, storm and tempest (excluding damage by sea, flood or erosion), lightning, explosion and earthquake to:

• replacement value or

• replacement value up to, for an event of a specified kind, a maximum amount specified in the contract of insurance. The owner of a lot in a survey-strata scheme is responsible for insuring the infrastructure on their lot. Special rules apply to single-tier strata schemes, and these are described below.

 

A strata company must also be insured against damage to property, death, bodily injury or illness for which they could become liable in damages, to an amount no less than $10,000,000.

 

The owner of a lot is responsible for insuring against the above-mentioned risks for damages for which they could become liable.

If a strata company has taken all reasonably practicable steps available to obtain the required insurance but no insurer is willing to insure, the strata company must obtain whatever insurance it can obtain that most closely meets the requirements.

 

The insurable asset of a strata titles scheme means:

  • the common property of the scheme (including the fixtures and improvements on common property)

  • the parts of scheme buildings that comprise lots in the scheme (including the paint and wallpaper)

  • carpet and floor coverings on common property that are permanent

  • for a strata scheme, buildings on the parcel (including those buildings not shown on the scheme plan).

But does not include:

  • fixtures or improvements on the common property that are not themselves common property

  • carpet and temporary wall, floor and ceiling coverings in a scheme building

  • fixtures removable by a lessee at the expiration of a tenancy

  • temporary wall, floor and ceiling coverings on common property.

If a strata company receives money from an insurer in the event of damage to or destruction of an insurable asset, that money must be applied in rebuilding, replacing, repairing or restoring the insurable asset, unless:

  • the scheme is a survey-strata scheme, and

  • the strata company passes a resolution without dissent specifying how the money is to be distributed amongst members of the strata company or used, and

  • the insurable asset or the area affected by the damage or destruction (if the insurable asset has been destroyed or removed) is left in a safe condition.

Insurance in a single tier strata scheme
 

See Schedule 2A, clauses 53A-53E of the Act

In a single-tier strata scheme, the owners are responsible for insuring the insurable assets in their lots, and taking public liability insurance against their individual lots, unless the strata company decides by ordinary resolution (majority decision) to take out joint insurance.

The strata company must keep insurance of insurable assets (to their replacement value) that are within common property and insure for public liability (for at least $10,000,000) in respect of common property unless:

  • the only common property is the air above the lots and the soil below them, or fences; or

  • the strata company decides by resolution without dissent not to take out insurance.

Any owner can insist, by serving written notice on the strata company, on insurance of common property at any time.

Other Insurance
 

The strata company must also take out any other insurance required by law, for example, workers’ compensation, if applicable, and it may insure against other risks which the strata company decides to insure against. For example, office bearers’ liability insurance.

Notice to a member of strata company
 

See section 98 of the Act

If the strata company has difficulty in obtaining required insurance cover due to some activity within the scheme by a member of the strata company, the strata company may give the member notice in writing requiring the owner to:

  • either take or refrain from taking specific action, or

  • pay an amount equal to that part of the premium payable by the strata company for the required insurance

attributable solely to the risk associated with something within the member’s control. The payment must be

made to the strata company within a specified period.

If the lot owner fails to comply with either of these requirements, the strata company may obtain an order from SAT determining action to be taken or refrained from being taken by the member.

Strata company failure to insure
 

See section 99 of the Act

If the strata company fails to take out any required insurance, a member of the strata company may take out the insurance in the name of the strata company. SAT has power to make orders for the member to be compensated for any payment made.

Service Contracts
 

See section 200 of the Act

The strata company may enter into contracts for services or amenities, subject to the normal expenditure provisions of the Act (see section 102 of the Act).

 

A contract relating to the provision of amenities or services to the strata company or the owners of lots can be terminated five years after if it was entered into, if it was made before registration of the strata titles scheme and when any owner held 50 per cent or more of the unit entitlements. For the strata company to terminate the contract, it must give written notice to every other party to the contract.

 

The contract must also have been made after the commencement of section 41 of the Strata Titles Act 1985, which was the first time the STA gave strata companies the power to terminate such contracts. SAT can extend the contract period of five years on application of a person in respect of the contract if satisfied that the contract is fair to all owners of lots in the scheme and will remain fair for the extended period. An extended period is not to exceed the period specified in the contract or 10 years from start of the contract, whichever is less. SAT may also make an order requiring a strata company to enter into, vary or terminate a contract, including a contract for services or amenities to the strata company or the members of the strata company

Arranging Utility Connections
 

With the increasing use of solar photovoltaic panels, many strata owners have queries about how to arrange the appropriate utilities connections. Strata schemes typically have a single connection point to the Western Power network that determines the total allocation of available electricity supply and generation capacity to be shared by all strata lots in the scheme.

 

This connection point has a fixed capacity, so it’s important for strata lot owners and prospective purchasers to be aware of the arrangements and obligations relating to the connection, as it may restrict their ability to install equipment such as home EV charging stations, rooftop solar panels and batteries. Before applying to connect this type of equipment, strata lot owners should first seek permission from their strata company to use an allocation of the total network capacity allocated to the strata scheme. Failing to do this may prevent other strata lot owners from connecting their own equipment, or require the strata company to upgrade the connection to the Western Power network to accommodate the needs of all strata lot owners.

 

It’s important to remember the strata company is ultimately responsible for the management of the common connection to the Western Power network and the common electrical system within the strata scheme. Effective management of this shared resource will allow the benefits of renewable energy solutions to be shared by the all strata lot owners.

For additional information please call Western Power on 131 087.

See section 118 of the Act

A strata company can execute a document either by:

  • applying the strata company’s common seal to the document, or

  • having the document signed by a person who is authorised by a resolution of the strata company to sign documents on behalf of the strata company. That person could be a member of the council, an owner or a strata manager.

 

A common seal is optional for strata companies and may be electronic. When using a common seal, it must be attested to by two members of the council of the strata company.

Generally, any rubber stamp manufacturer will be able to make the rubber stamp, with an example shown below. If you are purchasing a common seal, it must contain the name of the strata company and the strata/survey strata plan number.


The name of the scheme on the seal must be exactly the same as:

  • for plans registered before 1 May 2020 - the name shown on the scheme plan

  • for plans registered after 1 May 2020 – the name shown on the scheme notice.

Council members attesting to the affixing of the seal should sign, then print their names in full (clearly) underneath their signatures.


Only one co-proprietor of a lot can sign as a member of council (see Schedule 1, governance by-law 4(6) of the Act).
Where a member of council is delegated by a corporation and attesting the affixing of the seal they should sign, print
their name in full and also include the following under/alongside their printed name “As authorised signatory for (name
of corporation) as authorised under section 136 (2) of the Act”.

(Landgate 2020)

© 2003-2019 by Abode Strata. Privacy Policy
The advice within is general and has been prepared without taking into account any specific or personal objectives, financial situation or needs.

Please also note this general advice was provided prior to the new strata title amendments were proclaimed and will be updated in due course.

Deft Payment.jpg
  • YouTube Social  Icon
  • Instagram Social Icon
  • LinkedIn Social Icon
  • Twitter Social Icon
  • Facebook Social Icon