Organising insurance for all owners
A recent SAT case where an owner in a self-managed scheme wanted a premium reimbursement
Summary
A recent case was heard in the SAT relating to the payment of strata buildings insurance. The case related to a 4 lot / single tier scheme which was self-managed. One owner (applicant) arranged and paid for the policy (from their own funds) and then asked the other owners to reimburse their quarter share of the premium. This had been a longstanding unofficial arrangement, with no history of conflict. One owner (the respondent) wanted to organise their own insurance this year, and refused to pay. The applicant asked SAT to determine whether the respondent should have to pay the 1/4 share. Click to read
Outcome
The outcome was that SAT determined that the respondent could organise their own insurance and did not make an order for a reimbursement to the applicant in the case.
The take-away for self-managed schemes from this case is to seek quotes and table these at a general meeting of the Strata Company for discussion. If all owners are in agreeance - funds should be paid via the strata bank account and not from one owner's personal account. The meeting decisions should be recorded in the minutes, which should be distributed to all owners within 14 days of the meeting.
Update 17 March 2022
In an update to this case, the respondent in the original proceedings filed to seek an order for costs expended in his defence. The SAT awarded fixed costs at $2,000.
PONTIFEX and SMILLIE [2021] WASAT 163 (S) - eCourts Portal (justice.wa.gov.au)