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Things to Know Before Purchasing a Strata Property
If you’re planning on purchasing a strata property, be it for an investment or a residence, there are some key differences you should be mindful of.
The major difference between strata properties and detached homes is that all residents are sharing common facilities, such as lifts, garden areas, foyer etc.
Residential strata insurance (also known as body corporate cover) insures the common property that is under the management of the strata title or body corporate entity.
Your share of the premium is usually paid as part of your strata fees, but this doesn’t cover the contents of your property. You’ll need separate contents cover for that.
Additionally, if you’re renting your strata property to someone else, you’ll need a landlord’s policy.
You also need to be aware that some strata policies don’t provide cover for things that you own which are outside the main living area. These are also known as ‘accessory units’ and can include anything from parking spaces to balconies. You need to make sure these things are covered if they aren’t already under your residential strata policy.
If an accessory unit is listed on your title, then it belongs to you as the owner, not the corporation. You also need to have the accessory units listed on your landlord’s policy if you plan on renting your property out.
Say if a visitor to your complex injures himself or herself by slipping over in the car park, they might then decide to sue the owners’ corporation. But if the area isn’t listed on the policy, the owners’ corporation could say it is not responsible as the incident took place on private property.
The same thing goes for property damage. For example if your tenant has furniture in a storage locker and some of it falls out and damages a nearby car, you as the landlord and the owner of the locker could be held liable.
Your insurance policy should provide cover in such scenarios, provided the policy has been extended to cover your accessory units.
As you can tell, strata title is a complex area. Fortunately, our risk advisers are well equipped to deal with any enquiries and have a wealth of experience in crafting the most comprehensive, cost-efficient policies for strata property owners.
If you’re planning on purchasing a strata property, don’t hesitate to get in touch with us – we’re available to make this important investment an easy one.