VIC: Q&A Damage caused by a water leak from above

These Q&As are about damage caused by a water leak from the apartment above. These questions have been submitted by VIC unit owners living in strata apartments.

Table of contents:

• QUESTION: If the pipe only services one lot, is that lot owner responsible for any repairs? Because the pipe is outside the boundary of the unit, our strata manager says it’s common property. Is this correct?
• QUESTION: There is a leak between a top and bottom unit. The OC says it is an owner issue but the insurance company sites the problem is a building issue. Who is responsible?
• QUESTION: Is water ingress due to a communal drainage overflow classed as flooding? Resolving this will likely involve up to four insurers.
• QUESTION: Due to a faulty roof, mould is growing on the plaster ceiling. What are the health impacts and should the ceiling be replaced?
• QUESTION: A plumber cut a hole in our ceiling during repairs to a leak in the upstairs apartment. If the leak was from their apartment, who is responsible for repairs to my ceiling?
• QUESTION: A leak from the apartment above caused damage to my apartment. Via their insurance, the OC will not repair much of the damage as they say it was pre-existing. Is this correct?
• QUESTION: I have a water leak which appears to have originated from the balcony above. Do I need to contact my neighbour myself? What can I do if they refuse access to have the leak investigated?
• QUESTION: Is there any way I can get the body Corporate or the Insurance company to take responsibility for damage caused by a water leak from the balcony above?
• QUESTION: Water leak from the balcony: I have a drain on the balcony the comes from the roof. There is a leak as it channels the roof water down from the third floor to the ground. Who is responsible?

Question: If the pipe only services one lot, is that lot owner responsible for any repairs? Because the pipe is outside the boundary of the unit, our strata manager says it’s common property. Is this correct?

A leak has been identified in unit A. A leak detection service investigated and determined the leak was under the slab of the unit located across from unit A. The pipe services hot water only to unit A, and unit A is the only lot impacted.

Because the pipe is outside the boundary of unit A on the Plan of Subdivision, our strata manager and her line manager both say it’s common property. If the pipe only services one lot, is that lot owner responsible for any repairs?

The owners corporation doesn’t have enough in our sinking fund to cover the repair. We have raised a special levy to pay for the works.

We are concerned that insurance will not cover the repair as it may be determined as wear and tear.

Is the owners corporation responsible for repairs? We don’t want to waste owners corporation’s money unnecessarily, especially in these times.

Answer: The sole purpose of the pipe will determine the responsibility to repair and maintain it in this situation.

The sole purpose of the pipe will determine the responsibility to repair and maintain it in this situation.

If you have not already done so, we suggest you obtain a copy of the plumber’s report which should confirm the location of the pipe and any lot(s) which it services.

In accordance with the Act and as noted on the Consumer Affairs website, “The owners corporation is responsible for the common property – the Owners Corporations Act 2006 states that the owners corporation must, among other things, manage, administer, repair and maintain the common property.”

You have noted above that the pipe exclusively services lot A, and only lot A is impacted by the issue.

Section 129 of the Act states:

A lot owner must—

1. properly maintain in a state of good and serviceable repair any part of the lot that affects the outward appearance of the lot or the use or enjoyment of other lots or the common property; and
2. maintain any service that serves that lot exclusively.

We suggest that, if the plumber’s report fails to confirm the location/purpose of the pipe, contact the plumber to confirm the usage/service and to include that with the report.

It might be possible for you to claim this under insurance; however, this would depend on the excess payable and whether that outweighs the cost of the repairs. Further, the insurer will require a report from the plumber as to what caused the pipe to crack/burst. You would then need to check this against your policy to determine whether coverage is provided.

Without viewing the report and based on your comments above, this is likely a private lot owner responsibility, and all costs of rectification should be borne by lot A. Provide the owner of this lot with the report from the plumbers and relevant sections of the Act to advise that they are responsible for the repairs.

This is also stipulated under section 16(1) of the Water Act 1989, which states:

1. If—
   
   1. there is a flow of water from the land of a person onto any other land; and
   2. that flow is not reasonable; and
   3. the water causes—
      
      1. injury to any other person; or
      2. damage to the property (whether real or personal) of any other person; or
      3. any other person to suffer economic loss—
         
         the person who caused the flow is liable to pay damages to that other person in respect of that injury, damage, or loss.

Should you still require further clarification, we strongly encourage you to obtain independent legal advice.

Sim Firns
The Knight
Email
P: 03 9509 3144

This post appears in the August 2023 edition of The VIC Strata Magazine.

Question: There is a leak between a top and bottom unit. The OC says it is an owner issue but the insurance company sites the problem is a building issue. Who is responsible?

In our 25 unit complex, there is water leaking between the open terrace of one lot and the inside unit of the lot beneath. The strata plan shows lot boundaries as ‘median’.

The OC says this is a lot issue between the two lots concerning private property and as it is not common property, it is not their responsibility.

Neither lot owner’s insurance will cover the damage. They site that the problem is a building issue and comes under the owners corporation’s strata insurance.

How do we resolve this?

Answer: based on the limited information, the water damage that has resulted from the leak may be considered, but fixing the leak may not.

The strata insurance policy is the most appropriate policy to respond to this claim as a lot owners “contents” policy does not cover the building.

Whilst the “building” is covered by the policy, we need to understand whether the “event” itself is covered or excluded.

We expect that some (or all) of the claim may not be covered. Water damage claims are our most contested claims with insurers because there is often a component of maintenance and also repair of water damage. Strata insurance is designed to cover the cost to repair water damage to insured property but generally excludes repair costs related to finding and fixing the leak, as it is generally considered the owner’s responsibility to maintain their property and such repairs relate to general maintenance or wear and tear. The insurer has exclusions such as lack of maintenance, rust, oxidation, wear and tear, corrosion, gradual deterioration, developing flaws, building defects, the rectification of faulty workmanship etc.

So based on the limited information, the water damage that has resulted from the leak may be considered but fixing the leak may not. If the cost of the water damage component of the claim exceeds the excess, a claim can be lodged.

For anything not covered by the insurance claim, the owner of the property is responsible for the maintenance and upkeep of the property unless they can demonstrate another party is liable for the damage (for example the bottom unit may be able to demonstrate the top unit is liable).

Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
P: 07 3899 5129

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in the February 2023 edition of The VIC Strata Magazine.

Question: Is water ingress due to a communal drainage overflow classed as flooding? Resolving this will likely involve up to four insurers.

Is water ingress from communal drainage issues, in this case a faulty sump and pump, flooding? We’ve had issues as a result of stormwater overflow in a combination of water tanks that have overflowed from our next door neighbour. What is this classed as?

Water overflow is a reoccurrence and strata won’t cover us. The neighbour issues occurred at the same time. Resolving this will likely involve up to four insurers.

Answer: Unless the water has come from a lake, river, dam, canal, watercourse or other body of water in the exclusion, the flood exclusion isn’t operable.

Does this fit the definition of flood? Unless the water has come from a lake, river, dam, canal, watercourse or other body of water in the exclusion, the flood exclusion isn’t operable.

Obviously, we don’t know the full circumstances but on face value I would say that this is a claim that does not have the flood claim that is operable. You are going to need a good insurance broker to help you navigate this claim because if the insurer is saying it’s not covered, you’d want to understand why it’s not covered and know what the exclusions in the policy are that they’re referring to.

For a lot of these hypothetical scenarios, without knowing the full details and seeing hydrologist reports that might be 55 pages long, I can only give you a general overview of my thoughts. But obviously, the devil might be in the detail of those reports.

Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
P: 07 3899 5129

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in the July 2022 edition of The VIC Strata Magazine.

Question: Due to a faulty roof, mould is growing on the plaster ceiling. What are the health impacts and should the ceiling be replaced?

I have a couple of lots that regularly flood via faulty roofs.

There is a lot of pigeon mess and dirt that has flowed in through the floor above into the lot boundary and settled around the lighting ballasts and plaster.

Mould is growing on the plaster ceiling, behind the plaster wall and on the brickwork. These areas haven’t been flooded in a year or so. I’m wondering about the health impacts. Does the ceiling need to be ripped out and replaced?

Answer: Mould requires moisture, oxygen and a food source in order to grow. Generally, if you remove one out of the three, the mould will stop growing.

Obviously for a mould to be visually grown on the plaster ceiling, the water ingress issue will need to be addressed. Mould requires moisture, oxygen and a food source in order to grow. Generally, if you remove one out of the three, the mould will stop growing.

With regards to the mould growing behind the plaster I’m assuming they’re referring to the mould growing on the back of the plaster or the gyprock. If that is the case, the best form of mould remediation is the removal of the mould damaged plaster if it has been structurally compromised.

Sometimes surface mould on plaster can be just wiped down and decontaminated. It all depends on whether the mould is growing through the plaster or it’s just on the surface. If mould is growing on the brickwork, that can simply be decontaminated. Bricks are not a natural food source and if there’s any visual mould on the bricks, it’s likely growing on the dirt on the bricks, not the bricks themselves. Similar to mould on glass.

As we know, mould is everywhere in our environment, and everyone reacts differently to it.

In regards to the health conditions when exposed to different levels of mould, that’s different for every person. Unfortunately, the only person that can determine what health impacts there are is a doctor and it’s obviously dependent on the individual exposed to mould.

Sedgwick is more than happy to look at this situation further if there are some photos of the area to give a bit more advice. I’m going off of what the information has been provided.

Oh – and get rid of the pigeons!

Ryan Richards
Sedgwick
E: [email protected]
P: 1300 735 720

This post appears in the May 2022 edition of The VIC Strata Magazine.

Question: A plumber cut a hole in our ceiling during repairs to a leak in the upstairs apartment. If the leak was from their apartment, who is responsible for repairs to my ceiling?

The Owner of the apartment above us has fixed a leak that was caused by their internal washbasin drain pipe leaking. The plumber came and created a hole in our ceiling during the repair.

Our bathroom ceiling now has cracks, the light fitting is coming off, we have rot & mould and the hole has not been repaired. I am quite concerned that the ceiling may fall. Who should be responsible for fixing the damage caused by the leak?

In this instance, what legislation is applicable to apartment repairs? Is the owner of the apartment upstairs responsible for fixing our ceiling? They have been asking us to bear some of the cost and I am not sure where I stand.

Answer: If an insurance claim can be considered for the water damage component of this claim, this may help resolve some of the expenses without either lot owner needing to cover those costs.

The first consideration is whether an insurance claim can be considered for the water damage component of this claim. If so, this may help resolve some of the expenses without either lot owner needing to cover those costs. The precedent case Paisley v Owners Corporation PS52240 suggests the owner of the property where the leak originated (“the lot above”) may be liable for the excess.

For items not covered by insurance, the question of legal responsibility best fits a legal or strata management professional. Section 129 of the Owners Corporation Act outlines a lot owners maintenance obligations and this issue may be considered a breach of that section of the Act.

If the owner of the lot above has contents insurance, the lot owner with the damage may submit a letter of demand to the owner of the lot above and they can then refer this to their contents insurer for consideration of a claim under the public/legal liability section of the contents insurance policy. The contents insurer will consider if their lot owner is responsible for damage and if so make a payment to the damaged lot owner under that section of the policy.

Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
P: 07 3899 5129

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in Strata News #546.

Question: A leak from the apartment above caused damage to my apartment. Via their insurance, the OC will not repair much of the damage as they say it was pre-existing. Is this correct?

I had a flood from an apartment above me which flooded my bathroom (50%) and kitchen/lounge (40%) – the issue is that the OC is saying a lot of the bathroom damage to the door/architraves in the bathroom was pre-exisiting, part of it was, but it has been exacerbated by the flood.

They are basically sticking to their guns that it won’t be replaced or repaired due to being “pre-exisiting” however I’m concerned as the owner that I will be stuck with this damage for something I had no control over and certainly did not cause.

Answer: Water damage claims can differ on a case by case scenario so a “one size fits all” answer to the question isn’t always the best approach.

Water damage claims can differ on a case by case scenario so a “one size fits all” answer to the question isn’t always the best approach. If the policy is managed by an insurance broker, it is always best to get advice from the broker managing the policy as to the specific issues and exclusions raised by the insurer.

Generally speaking, the insurer is not required to repair any pre-existing damage. Notwithstanding, consideration should be placed on damage to property that did not have pre-existing damage. The insurer should be able to get a quote and scope of work and exclude any works that relate to repairs to pre-existing damage and settle the additional work.

If the repairs for the pre-existing damage are the same as the repairs from the new event, the insurer may have grounds to decline your claim.

One other consideration with regard to claims where pre-existing damage is an issue is whether the pre-existing damage can be claimed under another (prior) policy.

Tyrone Shandiman
Strata Insurance Solutions
T: 07 3899 5129
E: [email protected]

This post appears in Strata News #422.

Question: I have a water leak which appears to have originated from the balcony above. Do I need to contact my neighbour myself? What can I do if they refuse access to have the leak investigated?

I have water damaged on the floorboard in the lounge room. The plumber employed by the body corp has cut opened the plasterboard and he saw water cascading down the internal cavity wall.

In order to detect the source of the leak, the plumber requires access to the balcony above me to do a flood test. However, the owner above is reluctant because he is afraid the flood test will cause his tiles on the balcony lifted further and water will also leak into his apartment. The owner above me also has slow leaks into his apartment.

At the moment, we do not know for sure if the leak is coming from his balcony. However, body corp said that as the leaks involved both apartments, I will need to liaise with the owner above me to get flood test done.

There are common areas eg solar panel, roof, hot water on the level above me. The leaks can come from anywhere. Is it true that at this unknown stage I am required to talk to the owner above me personally? Also, is it legal for the owner above me to refuse entry for further testing on leaks?

If the plumber never gets access to do the flood test and we are never able to prove that the leaks originated from his balcony, will I still be able to claim building insurance? Do I need to go through body corp to claim building insurance?

Answer: If the leak is most likely from the balcony above, you must liaise directly with the owner of the upper apartment.

Interesting scenario in your email. I suggest that the Owners Corporation (“OC”) have their plumber determine if the water leaks are from any common property parts of the building – just to eliminate that possibility. From the description in your email, it does seem as though the balcony above has faulty tiles on its balcony – noting the waterproofing systems on that balcony all form part of the private property of that Lot.

If the OC plumber states that the source of the water leak is not from common property – and it is most likely from the balcony above – then the owner of the affected apartment below must liaise directly with the owner of the upper apartment – as this is a private owners issue – not an OC issue. If the owner of the upper level apartment will not allow for water testing of his balcony the affected owner must take the matter to VCAT to seek Orders that the plumber be allowed to test the waterproofing system of the upper level apartment.

An alternative (if the affected owner agrees) is that a solicitor’s letter be sent to the upper level apartment to “pressure” them to do the correct thing and allow access to water test the balcony.

As for insurance – the OC insurer will not cover any repairs to the apartment until the source of the water leak has been rectified.

Dan Slattery
Legal & Mediation Services
Phone 0412 102 978
E: [email protected]

This post appears in Strata News #314.

Question: Is there any way I can get the body Corporate or the Insurance company to take responsibility for damage caused by a water leak from the balcony above?

I have a ground floor apartment that is suffering from damage caused by a water leak from balcony above, most likely due to the failure of the waterproof membrane.

The building is only 6 years old, but unfortunately, the builder went out of business shortly after the completion of the building.

I have contacted the Body Corporate who in turn have contacted the Building Insurance company. The insurance company will not cover the cost of repairs because they say it is a building fault and should be covered by the Builder.

The only way to fix this will be to perform some costly repairs to the water leak from the balcony above but the private owner of this apartment is not interested.

Is there any way I can get the body Corporate or the Insurance company to take responsibility for this?

Answer: Water damage claims make up 45% of claims received by Strata Insurance Solutions in the calendar year 2017 and are often the most contentious claims.

Water damage claims make up 45% of claims received by Strata Insurance Solutions in the calendar year 2017 and are often the most contentious claims as there are things that are and are not covered by the insurer.

In essence, the policy should cover “water damage” that results from any leak. If the insurers are not looking to cover this portion of damage then it should be queried further, as it is generally accepted in the industry that water damage is deemed sudden and accidental damage and usually there are no exclusions the insurer can rely on.

Often what is not covered is the costs associated with fixing a leak. In the instance provided by the owner, it appears it is a building defect and most policies exclude rectification of defects.

Fixing a leak although not covered, can sometimes be the most expensive part of the claim particularly where say a waterproofing membrane sits underneath tiles and is leaking. To fix the leak, you need to remove the tiles and then apply a membrane and re-tile the surface.

Most States & Territories have builders warranty insurance which usually lasts up to 6 years after the property was built. Owners can apply for rectification of defects through State Government building authority. If this is not possible, the owner may also be able to apply to the applicable State Commissioner responsible for disputes within strata properties to compel the owner of the unit above to fix the leak.

As water damage claims are very individual, I would be happy to have a further discussion with the owner about their particular claim to help navigate them on the best way forward.

Tyrone Shandiman
Strata Insurance Solutions
T: 07 3899 5129
E: [email protected]

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. This information is designed as a basic guide with relation to cover and you should refer to your Policy Schedule and Product Disclosure Statement for all terms and conditions related to cover under any insurance policy. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in Strata News #205.

VIC: Q&A Water Leak From the Balcony

This Q&A about who is responsible for a water leak from the balcony has been answered by Stuart Mellington, Select OwnersCorp Management.

Question: Water leak from the balcony: I have a drain on the balcony the comes from the roof. There is a leak as it channels the roof water down from the third floor to the ground. Who is responsible?

I have a drain on the balcony the comes from the roof. It channels the roof water down from the third floor to the ground.

This drain then goes down an internal wall on the second floor. It is leaking because when it rains the paint bubbles.

The strata company has said because the drain is on my balcony it is my issue, not the body Corporates.

How do I find the rules on this matter?

Answer: The answer to this is not so straightforward. The complications come in with the fact that the water referred to is as explained coming for the roof which is common property.

The answer to this is not so straightforward.

The complications come in with the fact that the water referred to is as explained coming for the roof which is common property. It is, therefore, the responsibility of the Owners corporation to ensure it is delivered to the legal point of discharge regardless of the downpipe traversing a private lot. This is dealt with under the Water Act.

In the event the water was being collected only on the balcony of the apartment then it may be the responsibility of that lot. The issue here falls under sec 129 (b) of the Owners Corporation Act 2016 where it states:

“a lot owner must maintain any service that serves that lot exclusively”.

It should be kept in mind though that if another unit is connected, whether it is obvious or concealed within the wall anywhere in the downpipe, between this unit and the ground then from the point the other unit is connected it becomes a common property issue and the responsibility of the Owners Corporation.

I would be very surprised if the downpipe pass by another lot that has a balcony and that that balcony is not connected to this downpipe. Therefore the issue of the replacement is a shared facility and therefore an Owners Corporation expense.

As you can see there are 3 scenarios:

• If the water is coming from the common roof and this appears to be the case. Then the downpipe is common property and the repair is the responsibility of the Owners Corporation.
• In the event the water being discharged via the downpipe was only originating from the balcony of the lot in question and no other unit is connected then it would be the responsibility of that lot owner.
• Should the downpipe only discharge the water collected from the balcony of the lot in question but another lot be connected along the length of the downpipe then the section from the point the second lot is connected is common and therefore the Owners Corporation’s responsibility.

This post appears in Strata News #135

Stuart Mellington
OwnersCorp Aust (Asset) Management t/as Select OwnersCorp Management
P: 9862 3730
E: [email protected]

Have a question or something to add to the article? Leave a comment below.

Embed

Read More:

• If It Has a Balcony, It Will Leak
• VIC: What’s yours and what‘s common property?

Visit our Maintenance and Common Property OR Strata Title Information Victoria.

After a free PDF of this article? Log into your existing LookUpStrata Account to download the printable file. Not a member? Simple – join for free on our Registration page.