Body cor­po­rate and in­sur­ance

Con­sumer tips ... pro­vided by REIQ

Whitsunday Times - - REAL ESTATE -

HOUS­ING af­ford­abil­ity has made the unit and townhouse mar­ket in­creas­ing popular with first home buy­ers. But while com­mu­nity living presents an af­ford­able op­por­tu­nity for peo­ple to own their home, it also brings a unique set of cir­cum­stances.

The body cor­po­rate for a com­mu­nity ti­tles scheme is com­posed of all the own­ers in the scheme. Ev­ery new owner au­to­mat­i­cally be­comes a mem­ber of the body cor­po­rate.

One of the re­spon­si­bil­i­ties of the body cor­po­rate ev­ery year is to re­view each of its in­sur­ance poli­cies at the An­nual Gen­eral Meet­ing.

Un­der the Body Cor­po­rate and Com­mu­nity Man­age­ment Act 1997 and the Body Cor­po­rate and Com­mu­nity Man­age­ment (Stan­dard Mod­ule) Reg­u­la­tion 2008, the body cor­po­rate must in­sure com­mon prop­erty and body cor­po­rate as­sets, as well as build­ings in which lots are lo­cated. “The type of sur­vey plan reg­is­tered for the com­mu­nity ti­tles scheme af­fects the body cor­po­rate’s re­spon­si­bil­ity to in­sure a build­ing,” REIQ CEO An­to­nia Mer­corella said.

“An ex­am­ple of a Build­ing For­mat Plan, for­merly a Build­ing Units Plan, is a multi-storey block of res­i­den­tial units. The reg­u­la­tions for this type of plan re­quire in­sur­ance for the full re­place­ment value of each build­ing which con­tains a lot.

“An ex­am­ple of a Stan­dard For­mat Plan, for­merly a Group Ti­tles Plan, is a townhouse com­plex. The reg­u­la­tions for this type of plan re­quire in­sur­ance for each build­ing to its full re­place­ment value where a build­ing on one lot has a com­mon wall with a build­ing on an ad­join­ing lot.”

Un­der the leg­is­la­tion, a build­ing in­cludes im­prove­ments and fix­tures (ex­clud­ing car­pet) but does not in­clude: Tem­po­rary wall, floor and ceil­ing cov­er­ings; Re­mov­able fix­tures; Mo­bile or fixed air-con­di­tion­ing units serv­ing a par­tic­u­lar lot;

Cur­tains, blinds or other in­ter­nal cov­er­ings; and

Mo­bile dish­wash­ers, clothes dry­ers or other elec­tri­cal or gas ap­pli­ances not wired or plumbed in.

If the body cor­po­rate is re­quired to in­sure one or more build­ings, it must ob­tain an in­de­pen­dent val­u­a­tion for full re­place­ment value of the build­ing or build­ings at least ev­ery five years.

Ms Mer­corella said the body cor­po­rate must in­sure the com­mon prop­erty, such as pools or fences, and the body cor­po­rate as­sets, such as plant and equip­ment, to full re­place­ment value.

“The body cor­po­rate must also take out public risk in­sur­ance over the com­mon prop­erty and for as­sets which it is prac­ti­cal to have public risk in­sur­ance. The public risk in­sur­ance must be to the value of $10 mil­lion for a sin­gle event,” Ms Mer­corella said.

In the no­tice of the An­nual Gen­eral Meet­ing, the body cor­po­rate must also dis­close in­for­ma­tion about each pol­icy of in­sur­ance to lot own­ers in­clud­ing: The name of the in­surer; The amount of cover un­der the pol­icy; A sum­mary of the type of cover un­der the pol­icy; The amount of the pre­mium; and The date the cover ex­pires. More in­for­ma­tion is avail­able from The Of­fice of the Com­mis­sioner for Body Cor­po­rate and Com­mu­nity Man­age­ment’s web­site www.jus­tice.qld.gov.au/bccm

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