Is Owner's Corporation Policy required for units only sharing common boundary (wall)?

cuppaciano on 28/05/2019 - 17:35

I am looking to place an offer for this brand new unit. It is the last unit (out of four) available and the rest have already been sold and moved in.

My conveyancer has reviewed the s32 and noted that although there is not any shared driveway or other common property, there is this common boundary (wall) that each of the units share with each other, hence it is compulsory for vendor to provide an owner corporate policy to insure all 4 units.

I went to the agent for confirmation, to which he said that this issue was not brought up by any of the 3 other owners, and each of them has their own insurance policy (hence I presume it will be much work to get them switch over to a strata policy). I called insurance company and confirmed I could take out home insurance which would cover the common wall too.

When I presented these points to the conveyancer, they are still very adamant that a owner corporation policy is required, and that the vendor MUST backdate if it needs to be. I tried to tell her that I am much happy to organise my own insurance policy to avoid having a owners corporation, but they were not taking it as an alternative.

Could someone please tell me if owner corporation is really 100% necessary? Even if I am more than happy to BYO insurance?

Home & Garden

Comments

  • SnoozeAndLose on 28/05/2019 - 17:43

    time to get another conveyancer?

  • Dancasper on 28/05/2019 - 18:41
    +2

    It's unusual you have no common property but strata titled lots will have common services which will need to be maintained/ repaired in future. I'm not sure if you're asking if your purchase can avoid having to establish an owners corp, which I think is required by legislation(NSW has Strata Schemes Development/Management Regulation/Act) but without one could be a future nightmare. Imagine the sewer line for all 4 units is blocked and surcharging in your backyard - you dont want to argue with the neighboring units who should be paying for it.

    This is not my area of expertise (insert standard disclaimer) but someone with Real Estate experience could advise you best.

  • garetz on 28/05/2019 - 18:43
    +8

    Your conveyancer is being paid by you, they have your interest at the top of their priority, if they are saying that they need an owners corp, they are telling you that for your own best interests, just cause 3 other people fell into the trap of not having owners corp, doesnt mean that they are in the right, and your conveyance is in the wrong.

    I would take what they say very seriously, if there is no owners corp, even if you get insurance, you might still be liable for things that would normally be covered under strata insurance that is not covered under private property insurance. I would be more worried about the common property of the block than the shared walls.

  • mskeggs on 28/05/2019 - 20:04

    As I understand it, the laws vary by state. In Tas, for example, I believe you can have strata with no body corporate.

  • kusama on 28/05/2019 - 20:34

    With my townhouse (vic), block of 3 - only strata insurance is valid and required for the loan, split between each unit. I did get stuffed over a little bit - the builder registered them all equal units of value and one owner is a jerk so we pay the same even though mine is worth less - too hard to change now.

    You don’t need a body corporate just strata insurance but might be different for your state

  • 82norm on 28/05/2019 - 21:54
    +1

    Are you sure it’s not just a wall? What about roof, electrical, plumbing, gas?

    What was the contract- freehold or strata?

    • brad1-8tsi on 29/05/2019 - 08:26

      Exactly what I was wondering. If it's strata then you have the external faabric of the buildings and (some) of the services.

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