In this edition we discuss what Residential Strata (a.k.a. Owners Corporation) Insurance covers, provide tips to reduce condensation within apartments, interview a staff member, showcase some of our latest acquisitions and share some tips on how to save your Owners Corporation money.
Member Property Portal
This is a reminder to all our members that we have an on-line Member Property Portal on our website. This allows Owners Corporation members to access extensive information relating to their Owners Corporation including the ability to view Agendas/Minutes and a real time transaction history. Owners can also decide how they would like to receive correspondence and levies.
Why am I a member of more than one Owners Corporation?
In simple terms an ‘Owners Corporation’ is a group of Lot owners within a Plan of Subdivision where their lots share in the benefit of a specified common property.
A Plan of Subdivision may have more than one Owners Corporation. Where there are multiple Owners Corporations there is generally one ‘unlimited’ Owners Corporation of which all owners are members and one or more ‘limited’ Owners Corporations which contain subsets of all owners who share in the benefit of specific common property. Limited Owners Corporations assist in restricting access to certain common property and to better apportion costs between owners.
The Plan of Subdivision which is prepared by a surveyor will identify all Lots, the location of each and the Owners Corporations (if more than one) of which each Lot is a member.
The following example details a building which has multiple Owners Corporations:
A 10 storey apartment building contains 200 lots which includes 196 residential apartments and 4 retail outlets. The common areas of the building consist of a foyer, 2 lifts, apartment level corridors, a pool & gym area, a conference room, a basement car park and the roof of the building.
The 4 retail outlets are located on the ground level of the building, each accessed by a door from street level and they do not have any car spaces within the building car park. The occupiers and visitors of the retail lots are unable to access the pool, gym and conference room.
In this situation the only common area of the Plan of Subdivision that benefits the retail lots is the roof of the building and the facade. It would therefore be unfair if the owners of the retail lots had to contribute funds to help pay for expenses associated with the other common areas of the building.
Therefore in this situation two Owners Corporations would be created:
- Owners Corporation 1. This would include all 200 lots and would be linked with the common property and services that all lots share a benefit from; that being the roof of the building, building insurance as well as the building’s essential services (i.e. fire detection system & fire sprinklers).
Owners Corporation 2. This would include only the 196 residential apartments and would be linked with all common areas with the exception of the roof as they only share in the benefit of these areas.
- Costs allocated to Owners Corporation 1 would include the cost of building insurance, Owners Corporation Management, external window cleaning and the inspection and testing of essential services.
Costs allocated to Owners Corporation 2 would include costs associated with lift maintenance, electricity for the lift and lighting, cleaning of apartment level corridors and the car park, servicing of pool & spa etc.
As shown in the above example a Lot can be a member of more than one Owners Corporation. If there are multiple Owners Corporations then a budget should be created for each Owners Corporation and a separate levy struck for each. This is the reason why there are separate levy amounts listed on the Owners Corporation fee notice.
What does Strata Insurance Cover?
The following information is provided by Whitbread Insurance Brokers.
What is Strata Insurance?
Strata Insurance is designed to protect you and your property as a lot owner. It provides general insurance cover for common property under the management of a strata title or body corporate entity. The premiums for strata insurance are typically shared amongst the lot owners as part of their strata fees and levies.
Is Strata Insurance mandatory?
Holding strata insurance is mandatory under each state’s relevant strata legislation. However, each state and territory has different legislative requirements that deal with insurance for strata title properties. You should always check that your insurance meets those legislative requirements. If your property is professionally managed, your Strata Manager will usually arrange this insurance on your behalf.
What is covered under a Strata Insurance policy?
Strata Insurance policies cover material damage as a result of insured peril to structural fixtures including fixed plant, machinery and underground services. These policies also provide cover for owners’ fixtures, fittings and improvements which form part of the building. Some of these items may include built-in ovens, stovetops, kitchen cupboards, hand basins, baths and showers.
Common Policy Features include:
- Public Liability | Covers the legal liability of the Owners Corporation. This does not insure the liability of the unit owner, except where liability relates to the Owners Corporation’s property or common contents.
- Common Contents | Covers appliances, equipment, furniture, fittings and works of art in any common area for which the Owners Corporation is responsible.
- Loss of Rent and/or Alternative Accommodation | If a unit becomes uninhabitable as a result of an insured peril, the unit owner can claim for loss of rent or alternative accommodation during the period that the premises are unfit for occupancy, based on the rental value of a unit.
- Personal Accident for Voluntary Workers | Provides compensation to any person who voluntarily works on behalf of the Owners Corporation. The volunteer worker’s name must be recorded in the books of the Owners Corporation. This is a compulsory insurance under NSW Strata Legislation.
What is not covered under a Strata Insurance policy?
Strata Insurance specifically excludes contents within individual units such as carpets, curtains, blinds, light fittings and electrical appliances not actually wired into the premises. These items should be insured by your Contents Insurance or Landlord Insurance policy.
Does the Owners Corporation need to get a valuation on the building?
The law requires that buildings are insured for their full replacement and reinstatement value at the time of the loss, not at the time when the insurance policy was first taken out. Whitbread recommend that the Owners Corporation obtain a professional property valuation every three years.
What if I rent out my strata property?
Strata Property owners who rent out their property need to purchase Landlord Insurance as a separate policy to the Strata Insurance. Landlord Insurance provides insurance protection for your liability as a Landlord. In addition, the insurance provides for Landlord’s contents, loss of rent by an insured peril and other benefits.
What if I live in my property?
As an owner occupier of a property, you should arrange cover for your furniture, personal contents, jewellery, collections and other special items. Personal Contents Insurance policies provide legal liability protection for any damage to third party property or third party injuries that may occur anywhere in Australia.
If you require any information about how you’re covered under a strata insurance policy, including optional extras that are available, please contact your Owners Corporation Manager or visit Whitbread Insurance Brokers at www.whitbread.com.au
This article is intended for general information only and does not take into account your personal needs and financial circumstances. Before acting on this information you should consider the appropriateness of the contents, to your particular objectives, needs and financial situation, and seek professional advice prior to any commitment. For a full explanation of policy terms, conditions and limits you should refer to the insurers’ Product Disclosure Statement. Cover is subject to underwriting acceptance criteria. Whitbread Associates Pty Ltd, ABN 69 005 490 228, AFS License No. 229092, trading as Whitbread Insurance Brokers.
Meet a Staff Member
Meet our staff member, Gary Harper.
What is your current position, and how long have you worked for The Knight Alliance?
Senior Accounts Assistant, 2 years in July. Prior 40 years as an accountant in the property development and finance industry.
What first attracted you to work in Owners Corporations?
Looking for work in the property industry and Owners Corporations seemed to be a natural progression.
What does your job entail?
Proprietary accounting. Processing of Levy Notices and adjustments. Finalisation of year end accounts (including preparation for audit) for Owners Corporations and where necessary quarterly accounting and monthly reconciliations. Preparation of budgets for Owners Corporations. Preparation of yearly Income Tax Returns and quarterly BAS Statements and liaison with ATO where necessary. Processing of Owners Corporation Investments. Follow up with Owners with outstanding Levies and processing for legal action and liaising with Lawyers. Liaison with Owners/Agents regarding queries with Levies/charges and satisfying their queries.
What do you like most about your job?
The atmosphere of a friendly family business.
How would you describe your role?
Varied, doing the best for Owners, and rewarding.
What is your hobby?
I enjoy playing Veterans and weekend Hockey and for relaxation a 5km run
Ideal holiday destination?
Anywhere that has red wine grapes!!
What is your mantra/motto?
To help others whenever I can.
Nelson Mandela’s Long Walk to Freedom.
Current Matters relating to Owners Corporations
As the cooler weather approaches you may notice that water droplets form on the internal face of your apartment windows. This is referred to as condensation and occurs as a result of vapour in the air of your apartment making contact with the cold surface of the window glass.
The more vapour there is in the air within your apartment the more water droplets there will be on your window glass. In turn the moisture can cause damage to your window frames, apartment walls, blinds, skirting boards and carpet. It can also lead to bigger problems such as mould growth which can affect the health of occupiers.
Vapour is caused from every day activities such as cooking, use of a clothes dryer and taking a shower. In order to reduce the amount of vapour in the air the following can be done:
- Increase ventilation of the apartment by opening windows and apartment doors. In some cases where an apartment doesn’t have windows that can open there is ventilation grilles located in the ceiling which can be opened.
- Using your range hood and bathroom exhaust fans. The bathroom exhaust fan should also be turned on when the clothes dryer is in use. Installing a timer to your bathroom extraction fan so that it runs for 15-20 minutes after you have a shower will remove excess moisture from the bathroom.
- Avoid hanging wet clothes inside your apartment (this may not be avoided if the Owners Corporation rules state that clothes are not to be hung on apartment balconies and courtyards).
- Using the ‘dry mode’ on your air conditioner which will result in your air conditioner working as a dehumidifier.
- Sources of humidity such as plants, water dishes and fish tanks should be moved away from windows.
It is a common misconception that using a heater can eliminate or reduce the build-up of condensation. Warm air can retain a larger quantity of moisture compared to cold air, therefore the warmer the air inside the apartment the more moisture that can potentially be retained unless the external and internal humidity levels are equalised.
With Australia Post recently advising us of a 17% increase in postage costs now is the perfect time to “Go Green” and receive all Owners Corporation correspondence via email.
This is highly cost effective for your Owners Corporation and ensures that news, service notices, meeting agendas and minutes or other important updates are delivered safely and instantly to your email inbox.
Help us to help you reduce your Owners Corporation’s expenditure and reduce the carbon footprint on the environment by letting us know that you want to receive instant email delivery of Owners Corporation correspondence today!
The Knight Alliance keeps getting bigger and better!
Pictured below is Avenue Apartments, a Fridcorp Development which consists of 178 Lots located on the corner of Chapel Street and Alexandra Avenue in South Yarra.
The Saffron Apartments is a 40 Lot apartment building in Highett, which has been developed by Monson Property Group, a young and progressive development company.
The Knight Alliance has once again been selected by renowned Melbourne property developer Caydon to manage their new project, Atria Apartments in Hawthorn.
To celebrate the new appointment, The Knight Alliance took part in the Atria Information Night hosted at the home of the Caydon sponsored Richmond Football Club.
The night was a huge success with owners relishing in the chance to learn about their new Hawthorn apartment before they move-in or prepare to rent it out.
The opportunity to meet the new Owner’s Corporation was fantastic and made the move-in process even easier for the new home owners.
The Knight Alliance are looking forward to another positive experience managing its second Caydon project.
Pictured below are staff from The Knight who attended the evening.
We have recently welcomed Anna Rattana who joins us as an experienced Owners Corporation Manager, Anita Smith as our new Accounts Payable/Receivable, and Lumina Baird-Watson as an Accounts Assistant.
These new appointments add quality to our staff and have all settled into working at The Knight extremely well.