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I live in a strata managed apartment as an owner occupier.
When I bought the building finances were in the black, 2 years later they are in the red.
The building insurance cost has tripled since I bought in.
The complex includes residential and commercial units.
It has been stated the reason the insurance rise is related mainly to one of the commercial units a pub/strip club. Unfortunately there seems to be no separation between residential and commercial obligations. Lawyers have been engaged and the situation is before a tribunal to resolve this and hope to have the burden of the insurance increase place upon the business that is deemed the greatest risk. Unfortunately this has yet to be resolved as yet awaiting outcome of the tribunal.
An insurance broker sought out insurance coverage and few local companies were willing to cover the risk of our complex. The has led to the offer of an Australian based insurance cover but not the whole and overseas insurance company to cover the rest.
The challenge is I believe that they are not obliged to Australian regulations.
Additionally the complex was obliged to fix any defects before the insurance companies would take on the risk, fair enough.
The complex was built in the 90’s and due to the age of construction some residential units had problems with bathroom waterproofing however the developers were not deemed responsible for fixing the defects. There was a special levy established many years ago that all units would contribute to correct any waterproofing problems and the number of affected units had diminished over time. However the insurance challenges changed this situation. A meeting of owners occupiers agreed to taking a loan to fix the remaining units bathroom waterproofing challenges in the complex in order to meet the insurance requirements.
So with the recent allegations aired in the media about strata management companies I am worried. How worried should I be?
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