Flood damage can raise immediate questions about insurance, repairs and who must pay. This guide explains what to check, how responsibility is allocated and what to do if repairs or a claim become disputed.
Does body corporate insurance cover flood damage?
A body corporate must have insurance for common property, body corporate assets, public risk and, in most cases, buildings containing lots. The required insurance depends on whether the scheme is registered under a building format or standard format plan.
Whether your particular flood damage is covered depends on the policy. Building insurance must cover damage to the building and the costs of reinstating or replacing insured buildings. A body corporate can also take out extra building insurance for floods, so the policy, schedule and any applicable exclusions need to be checked carefully.
The Queensland Government’s insurance guidance includes water damage within the definition of damage. The actual policy wording remains important when assessing a claim.
The body corporate must give owners information about its insurance policies and valuations at each annual general meeting. Ask for the current policy, certificate of currency, schedule and claim correspondence.
You can also read our body corporate insurance factsheet for more information about body corporate cover.
What should you do after flood damage to a body corporate property?
Act promptly, while taking care not to place yourself or others at risk. Follow emergency directions and any instructions from the insurer, emergency services or qualified tradespeople.
Useful first steps include:
- Contact the insurer or broker about the damage and ask how the claim should be lodged.
- Take photographs and videos of affected areas before removing damaged items, where it is safe to do so.
- Keep records of conversations, reports, invoices and temporary accommodation or other reasonable expenses.
- Take practical steps to prevent further damage, subject to safety and insurer instructions.
- Arrange urgent cleaning or temporary works where necessary, while keeping evidence of what was done.
The cause of the flooding may affect the insurance claim and the repair responsibility. For example, the parties may need to investigate whether the damage came from common property, a lot, a building defect, drainage, stormwater or another source. Insurance coverage and legal responsibility for repairs are separate questions.
Who pays for flood repairs inside a lot and on common property?
The body corporate and lot owners both have maintenance responsibilities. The body corporate must maintain common property in a good and structurally sound condition, while a lot owner must maintain their lot in good condition.
Responsibility cannot be decided from the location of the visible damage alone. First check the scheme’s survey plan, the boundaries between the lot and common property, and the regulation module recorded in the community management statement. These details differ between building format and standard format plans.
An owner may be liable if failing to maintain their lot causes damage to another lot or common property. A body corporate may also be liable if failing to maintain common property results in damage to a lot. The circumstances and applicable maintenance obligation need to be considered before responsibility is assigned.
If the body corporate must pay for common-property repairs, owners generally contribute through body corporate levies. Each lot owner must pay a share of body corporate expenses, and unexpected costs may be collected as a special contribution. The amount is generally based on the contribution schedule lot entitlements, subject to legislative exceptions. Building insurance payments in a building format plan are based on interest schedule lot entitlements.
For more practical guidance, see our body corporate maintenance factsheet.
What happens if the insurance claim is rejected or only partly covered?
Ask the insurer for the decision and reasons in writing. Check the policy wording, the excess, the scope of the insured building, the evidence provided and whether the insurer has identified a difference between flood damage and another type of water damage.
The body corporate should obtain appropriate reports where the cause or extent of damage is unclear. An owner should also keep their own insurer informed if the damage affects contents, improvements or parts of the lot that are not covered by the body corporate policy.
If insurance does not meet the full repair cost, the remaining funding question depends on who is responsible for the repairs. The body corporate may need to consider its available funds, obtain quotes and decide whether a special contribution is needed. Owners who cannot meet repair costs should raise the issue early with the committee or body corporate manager.
Contributions should not be ignored because an insurance claim is disputed. A body corporate can charge a penalty for contributions not paid by the due date, subject to the applicable requirements. It can also start debt recovery action for unpaid contributions and may recover reasonable recovery costs.
If a building is seriously damaged, the BCCM Act includes reinstatement processes. The body corporate or an owner may apply to the District Court for approval of a process for reinstating all or part of the building. The court may make directions about insurance money, scheme changes and payments.
The Act also contains current termination pathways, including an economic-grounds pathway where it is not, or will not be, economically viable for the body corporate to carry out required repairs and maintenance. This is a formal process with specific reports, notices and voting requirements, rather than an automatic result of flood damage.
You can also read about how insurance excesses are usually considered in our body corporate insurance: who pays the excess article.
What should a body corporate do when flood repairs are delayed?
The body corporate should investigate the damage, identify the responsible party, obtain suitable advice and arrange necessary work as soon as reasonably possible. Flood events can make it difficult to obtain qualified tradespeople, so the committee should keep owners informed about inspections, quotes, approvals and expected next steps.
The body corporate has a maintenance obligation for common property. If it becomes aware of a maintenance problem, whether it has complied with that obligation will depend on the circumstances, the work required and the time taken to respond. There is no single repair deadline that applies to every flood event.
Owners should assist by providing access, sharing relevant evidence and raising urgent safety or damage concerns promptly. Lot owners also have maintenance responsibilities for their own lots. Delays in repairing a lot should be considered carefully where they may cause loss or damage to another lot or common property.
How can owners resolve a flood repair or insurance dispute?
Start by discussing the issue with the relevant owner, committee or body corporate manager. Put the request in writing and state the outcome you want, such as an inspection, a decision about responsibility, access for repairs or a motion for a general meeting.
Queensland’s body corporate dispute guidance requires parties to try self-resolution before taking further dispute-resolution steps. This may include written communication, a committee motion or a motion to a general meeting. Keep copies of emails, meeting minutes, photographs, quotes and reports.
If self-resolution does not work, you can apply for dispute resolution through the Office of the Commissioner for Body Corporate and Community Management. In most BCCM Act disputes, conciliation is the compulsory first step. You must show that you tried to resolve the issue yourself before applying.
Conciliation uses an independent conciliator to help the parties negotiate an agreement. The conciliator does not decide who is right or provide legal advice. If the dispute cannot be resolved, an owner may consider applying for adjudication. Complex insurance, repair, liability or termination issues may also justify independent legal advice.
Flood damage needs a prompt claim review, a clear allocation of repair responsibility and practical communication between owners and the body corporate. If you need help coordinating the next steps, contact our team at reception@stratacare.com.au.
