Get Smarter About Strata

There’s often confusion among landlords with investment properties housed in strata complexes about who is responsible for what when it comes to insurance. Here’s what landlords and their agents need to know.

It goes without saying that financially protecting an investment property with good insurance cover is a no-brainer. But sometimes knowing who is responsible for protecting what can be confusing.

It can be more complex when it comes to rentals within strata complexes such as apartments, flats, units or townhouses. If the building structures are owned collectively and managed through the body-corporate or owners’ corporation, responsibility for insuring the building/complex does not fall to the landlord. It is the responsibility of the body-corporate to take out strata insurance. This insurance covers the building, common property and common area contents of a strata scheme.

Strata insurance typically covers common area contents, the building and shared property in the event of loss or damage. Generally, events like theft of common area contents, repairs to damaged property managed by the owners’ corporation and the cost of recovery, if disaster strikes, are also covered. The insurance also provides liability cover in the event that people are injured on common property.

As the building is covered through strata insurance, many landlords assume they do not need to purchase insurance themselves, but this is not the case. Strata insurance may only cover the actual building structure and the shared or common areas within it (such as pools, gyms or recreational areas), shared area contents and property (such as carpets in the hallways or shared appliances in common areas like washing machines in the communal laundry) and permanent fixtures within each unit (such as doors, built-in stoves and tiling). This means that unit contents like non-fitted appliances, carpets, furniture, electronics and other personally-owned items are not covered.

Importantly, strata insurance does not cover the owner’s (or the tenant’s) liability to others for personal injury or property damage within the unit. Nor does it cover the landlord for any tenant-related risks.

Landlords should always contact their insurance company for advice on insurance tailored to individual circumstances.

Photo credit: abc.net.au

Source EBM Insurance