A major change happened in 2015, which straddles unit owners in NSW with significant financial risk.
The new Strata Schemes Management Act 2015 now, squarely places the responsibility for adequate insurance cover, on the shoulders of owners corporations. Removing it from the responsibility of a qualified valuer – as it has traditionally been.
There is a perceived benefit that owners corporations can save on valuation fees. However, the huge additional risks that owners corporations now carry, is linked to the requirement to get the numbers right – something that they traditionally farmed out to professional valuers. This change means that if owners don’t get it right, you may not be covered by your insurance policy at all.
Astute owners and strata managers are now actively seeking better quality valuation advice, on a more regular basis. Because, they understand that if there is a catastrophe, lot owners who have invested large amount of money into buying an apartment, want an insurance policy that protects their interests.
Changes like this happen relatively quietly, and can go unnoticed for years, but when you need to make a claim, or if there is a catastrophe, the owners that have got it right, will be the winners who have minimised their risk, and will be properly covered by their insurance policies.