Body corporate insurance and what homeowners need to know
After another season of storms across Southeast Queensland, many homeowners are once again dealing with insurance claims. But for people living in units, townhouses, or gated communities, the process is rarely straightforward.
In this episode of Brisbane’s Legal Lowdown, Attwood Marshall Lawyers’ Commercial Litigation Special Counsel Jade Carlson joins Carla Bignasca to explain how body corporate insurance works, why disputes between body corporates and homeowners are common, and what owners can do if a claim stalls or communication breaks down.
The discussion focused on the unique challenges faced by strata owners. Unlike standalone houses, properties in complexes involve shared ownership of common areas such as roofs, walls, driveways, lifts, and gardens. Under Queensland law, the body corporate is responsible for insuring the building and common property, while individual owners are usually responsible for their personal contents and certain internal items. This split responsibility is where confusion often begins.
Jade explained that many owners assume everything inside their unit is covered under the body corporate policy. In reality, policies often exclude items such as furniture, curtains, carpets, and internal paint in some schemes. Another common shock is the size of storm or flood excesses, which can range from several thousand dollars to much higher amounts depending on the policy.
Maintenance issues are also a major source of disputes. Insurance is designed to cover sudden events, like storms or fires, but not gradual deterioration. Problems such as rusted gutters, long-term water ingress, or worn waterproofing may lead to a claim being denied, even if the damage becomes obvious after severe weather.
One of the biggest frustrations for owners is not the damage itself, but the communication process. Claims often involve multiple parties, including the lot owner, the body corporate committee, the body corporate manager, and the insurer. Each step can slow the process, leaving owners to wait weeks or months for updates.
The episode also highlighted that owners do have rights. Homeowners can request access to important documents, including insurance policies, assessor reports, correspondence with insurers, quotes, invoices, and meeting minutes. If requests are ignored or repairs are incomplete, owners can escalate the matter through mediation with the Commissioner for Body Corporate and Community Management or, in some cases, apply to the Queensland Civil and Administrative Tribunal.
With more people living in strata developments across Southeast Queensland, understanding how body corporate insurance works has never been more important. As this episode explains, knowing who is responsible, what is covered, and when to seek legal advice can make a significant difference in the event of storm damage.
Carla: All right, welcome back to 4BC and 4RO. If you’re listening in Rockhampton to afternoon’s program, it’s time for this week’s Brisbane Legal Lowdown with Attwood Marshall Lawyers.
Well, we all know that home insurance claims can be frustrating at the best of times. They can move at a glacial pace. But if you live in a unit or a townhouse or a gated complex, the headache is usually ten times worse. Suddenly you’re dealing with body corporates, complex policies, maybe an Esme that you live next to like I used to, and arguments over who’s responsibility a leaking roof actually is to help us figure out what to do when communication breaks down and repairs store. We’re joined by Attwood Marshall Lawyers, Commercial Litigation Special Counsel, Jade Carlson.
Hello, Jade.
Jade: Hello, how are you?
Carla: I’m wonderful. All right, I want to start at the very beginning. For anyone who’s living in a unit or a townhouse or a complex, can you explain in layman’s terms how body corporate insurance actually works here in Queensland?
Jade: Sure. So, when you buy a unit or townhouse in a complex, you don’t just own a home you also share ownership of common areas such as driveways, lifts, gardens, pools, roofs, external walls, for example.
The body corporate manages these shared areas and is legally required under the Body Corporate and Community Management Act to take out insurance for the property.
Carla: Okay. And that’s, you know, these things are that are on strata, you pay your body corp fees and the levies. It’s been a little while, but thankfully I’ve been able to move out of the situation where I’ve had to do that.
There are some, you know, pluses and minuses, pros and cons for living in that situation. Certainly, you know, when you’re starting out in a foothold, and for me, that’s what was the case of foothold was about body corporate, but navigating all of that is really, really difficult.
I guess one of the biggest frustrations that we hear is people not just understanding what’s actually protected and what is typically included under the body corp’s insurance policy versus what falls under your own sort of individual policy?
Jade: Absolutely. And first of all, first and foremost, I would say check your body corporate insurance policy because they are very different. So look, ordinarily, body corporate insurance usually covers the building structure, which is usually roofs, external walls, windows. And depending on the policy, sometimes floors and fixtures, but that’s rare in the rare circumstance.
Carla: Yeah, right.
Jade: Common property, including like hallways, stairwells, lifts, pools, et cetera. And even sometimes public liability, which is where somebody gets injured on a shared common property.
Carla: Okay, yeah.
Jade: When we’re looking at body corporate insurance, body corporate insurance does not generally cover, say, for example, all your contents, your furniture, curtains, blinds, personal belongings.
Most townhouses in Queensland are part of a strata scheme, so the body corporate still insures the building, so to speak. However, some townhouse complexes are set up differently, which affects who is responsible for things like gardens, fences, external walls. That is exactly why I I would be checking your specific scheme details and your insurance.
Carla: Yeah, right. Because I just assumed everything outside of your walls, you know, like I said, the garden, generally speaking, falls under the body corporate or, you know, would be insured by. And when you think about, you know, when things like storm damage happens and, you know, trees fall over or whatever, this is a strange one. So, I thought that would be covered, but you’d have to, like you’re saying, you should just check first.
Jade: You should absolutely check.
Carla: Okay, because say that happens in a storm, a tree falls, hits your roof, and then water floods into your bedroom. Who’s actually responsible then for making the claim? Is it me and my home insurance or is it Body Corp claiming because a tree from outside fell into my home.
Jade: Yeah, so look, it’s a great question. Let’s break it down though. So generally speaking, under the Body Corporate and Community Management Act, the body corporate’s responsible for ensuring the building’s structure and common property.
So they are the ones who lodge the claims usually for the storm damage for the external part of the building. An individual owner cannot lodge a claim directly under the body corporate insurance. They would need to lodge it themselves. But say when a storm happens, the body corporate would handle, generally speaking, the roof damage, the external walls, structural damage, shared areas, and then a lot owner in that circumstance would handle the furniture, appliances, personal belongings, internal walls, fixtures, and all of that.
Carla: So you’ve got to get the two to two separate insurers to work with each other?
Jade: That’s correct. And it becomes confusing when, for example, there is a storm claim, which involves both building damage and contents damage at the same time. And you often have the body corporate saying, that’s inside your lot, you deal with it. And the owner’s saying, well, that’s damage caused by the roof, so it’s your responsibility.
So how are these claims dealt with? Well, let’s give an example like you gave before. A storm occurs, water lifts, say, the tiles, or a tree falls, water runs into your lot and damages the ceiling and your belongings, for example. Who’s responsible in that circumstance? The likely scenario, without reading obviously policies, would be roof rectification works would be the body corporate claim, the damage to your ceiling potentially would be the body corporate claim, and then the damage to your contents would be your own contents insurance.
Carla: That’s rough. But like you said at the very start, it’s important that you read through, I guess, all your policies and that just in case.
I should note, Jade Carlson is our guest right now as part of the legal lowdown from Attwood Marshall Lawyers. If you have a question that you’d like to share with Jade or if you’ve had something that’s on your mind, the open line, thanks to Watch Smoke Alarms is 133 882 or of course you can text through on 0499 880 882 or email through afternoons@4bc.com.au.
Jade, we’ve had a question come through from Steve from the Sunny Coast.
Jade: Hi, Steve.
Carla: He says, I own a townhouse in a block of townhouses. Mine has a backyard and the main sewage access in it. Someone planted a tree very close to it and the roots have gone into the sewage main. Body Corporate initially said they would get a plumber out to sort out the roots, but they’ve now told me cutting down the tree is my responsibility. Who does the blame fall on? My argument is that it’s not a fenced yard.
Jade: Interesting question. There’s a couple of little points that I want to make in relation to that. So first of all, we need to establish whose property it is. Is the tree planted in his backyard? It doesn’t really matter whether it’s fenced, but it does matter where the common boundary is about where it’s hit the sewer main. Second of all, who exactly is the person who’s planted the tree? Is it a neighbouring lot owner? Where does that tree currently sit? Where are the root systems?
So, look, Ideally, what I would do if the body corporate insurance has said no, what I would suggest is you get a copy of the denial letter, have a look and see exactly what it says. It may be that you need to get some sort of arborist or expert out to have a look and assess and to determine where that tree sits.
And you might need to engage a solicitor to basically obtain a plan so you can have a look at the plan and have a look at that. So that’s one part of it. If you’re unsatisfied, just generally, you can file an application with the BCCM and that is the Commissioner of the Body Corporate and Community Management and ask for a conciliation with respect to the body corporate if there is a dispute. But look, make the inquiries, obtain the denial letter, find out if there’s any experts that can give some advice and have a different opinion about it. And that will be your best key to then be able to then go to a conciliation and have a discussion with your body corporate.
Carla: There’s so many variables here. Like he says, someone planted a tree very close to it, whether it was on his lot or not.
Jade: Exactly.
Carla: Or if it was a tree that was planted there before and it, you know, the tree came with his backyard, then that would be his own responsibility, though, you would imagine.
Jade: Potentially. But you really do need to figure out exactly where the tree is and where it is planted.
Carla: And if it’s on your yard. I hope that answers your question, Steve. If you’ve got any follow-up, of course, you can email us afternoons@4bc.com.au. Or if you’ve got another question for Jade.
I want to know about owners. This question about owners constantly blindsided by, you know, the fine print, the exclusions, the T’s and C’s, the things that we don’t often read in policies. Once a disaster actually strikes, how often does that happen? They’re like, I didn’t see that, I didn’t read that, I didn’t know about that.
Jade: Honestly, it is extremely common for owners in strata schemes to be surprised about what we call exclusions and limitations in body corporate insurance policies.
It obviously usually happens at the worst possible time. That is usually when you’re making a claim and you’re getting a denial letter. Most people never read the policy, let’s say, and even if you do, the insurance wording can be very technical. Obviously, we would say obtain legal representation or advice in relation to that. But look, let’s just focus on three main areas where I would say that are the biggest surprise exclusions, okay?
Usually there’s maintenance exclusions. So, insurance covers sudden events like storms, fire, impact. It usually doesn’t cover wear and tear, rusted gutters, long-term water ingress, deteriorating waterproofing, for example.
So, owners often think storm damage caused the leak, but insurers may determine it was a poor maintenance issue. Okay, so that might be a reason.
So, it’s important to know that your property is up to scratch. If there’s any issues, raise it with the body corporate so that that can be fixed, so that there’s no maintenance issue. And then the likelihood of an insurance claim being denied is less.
Upgrade limitations. So, if an owner renovated, say a kitchen or replaced timber flooring, installed fancy new bathroom fittings, the policy may only cover original standard if it does apply, because there’s only some schemes that that does apply, not the upgrade. So it’s important that those upgrades are disclosed to the body corporate.
And then the other exclusion is usually high excess and who pays the excess. So storm and flood excess can be very high, sometimes 5 to $20,000. So it’s very important that you check.
Carla: Jade, we’ve got another question. John from Bongaree has called through. Hello, John.
John: Hello.
Carla: Hi, you got a question about insurance and body corporate caretakers requirements?
John: Yeah, what’s the legal requirement for caretakers to have insurance and what insurance are they required to have?
Jade: Good question. So, when we’re talking about caretakers, are you talking exactly about like public liability or just generally about caretakers?
John: Public liability, but also what about professional indemnity? Because if he’s doing work on the property, et cetera, and he damages something, that shouldn’t be the responsibility of the body corporate.
Jade: Yeah, so look at what it is, is it’s a contractual relationship between a caretaker and a body corporate. I’d be looking to see whether the caretaker has breached any obligations under the agreement, under the caretaker’s agreement. In terms of insurance, yes, they’re required to have insurance, but it’s really a basis of a contractual relationship between the two.
It’s not necessarily something that’s monitored under the Body Corporate and Community Management Act per se. It’s a contractual obligation, and that will be in the contract that they’re required to have some sort of public liability insurance. So, check that contract. If you need to lodge a complaint with the body corporate, do that. And they need to write a request as you would, like it would be a general breach of contract.
John: Yeah, wonderful. All right, that’s outstanding. Thanks ladies. Stay safe.
Carla: And to you as well. There’s nothing worse than having an unhandy handyman. I know I married one.
So, he should really take out public liability when it comes to taking a hammer to things.
Phil from Lowood, very quickly, just to wrap up Jade, has asked, are Queensland body corporate laws different from other states? My sister lives in Victoria and obviously there’s an issue there. Don’t know if that’s your field of expertise?
Jade: Look, it is not. They are very different though. So there’ll be a very similar piece of legislation in Victoria, very similar to the Body Corporate and Community Management Act. I would have a look at that act. They usually are very reciprocal, so they are very similar, but there are some differences. So, Victoria is not necessarily an area of my expertise. I wouldn’t propose to give any sort of legal advice over the radio, but if that’s just the general question about whether it’s different, it is, but you can probably rely on the fact that it will be very similar.
Carla: Okay, all right, I hope that answers your question, Phil. Thank you so much, Jade. Still so much to go through. I mean, look, it’s a reality. A lot of us are living in more sort of condensed living. Like I said, I’ve lived in apartments and villas and townhouses and things over the years. And this is a huge issue for all of us who, even if we’re right sizing and moving down into apartments, maybe you’ve lived in a house your whole life. So your expertise and your knowledge is welcomed here. Please come back again because we’ve just scratched the surface with Body Corp Law. I really appreciate your time.
Jade: Absolutely have, and no problems. Thank you for having me.
Carla: Thank you, Jade. They’re from Attwood Marshall Lawyers. Of course, if you’ve got any questions and we can get Jade back on, please feel free to email us through afternoons@4BC.com.au.
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