Body corp in poo over blocked pipe claim

A recent case concerning a blocked sewage pipe that flooded an apartment has left a Queensland body corporate in the poo, exploded a myth about strata insurance and highlighted a surge in claims for property damage.

The myth is that bodies corporate and owners corporations are only liable to cover damage caused by common property failures to the extent of their insurance cover – and this applies in other states too.

In fact, if they are liable at all, it’s for the total cost, whether it is covered by insurance or not, according to a report from the Unit Owners Association of Queensland (UOAQ).

“A recent Adjudication confirmed a body corporate’s liability for property damage to an owner’s lot when a common property sewerage pipe blocked up on the ground floor causing sewage to back up and overflow into the owner’s lot on the first floor,” says a UOAQ newslteer. 

The occupiers were away from home, and no one noticed the problem for a few days, says the report.  The damage was extensive, and the repair bill was much more than the compensation offered by the owner’s insurer and the strata insurer combined.

The body corporate did not contest its responsibility for the damage to the owner’s lot.  However, it assumed that its liability to the owner was limited to what was claimable under body corporate insurance, leaving the owner to pay for the rest of the clean-up, repairs and replacement themselves.

“This assumption proved incorrect,” says UOAQ.  “The body corporate was ordered under Section 281 of the BCCM Act to compensate the owner for nearly all of the damage.

“Section 281 offers a relatively simple and cost-effective mechanism for recovering damages to property, up to $75,000 for repairs or $10,000 for reimbursement.”

Because Section 281 is largely “settled law” the owner didn’t have to go through the hassle and expense of a trip to the Queensland Tribunal.  And apparently, word is out.

“We understand there has been a recent surge in these Section 281 compensation applications, as more and more owners  realise they don’t have to take it on the chin, just because they cannot afford the time, the trouble and the cost of going to court,” says UOAQ.

You can read the full story of this case and its consequences HERE on the UOAQ website.