WA Survey Strata Common Property Driveway Insurance

LKingQuokka on 31/03/2022 - 18:29
Last edited 01/04/2022 - 17:19

Hi, I'm in the process of purchasing a survey strata property in Perth. The Survey Strata has three lots including a driveway to the rear lot, my lot is street front accessible from my own driveway.

I've been told by my conveyancer that the common property driveway to the rear lot is required by law to be insured. The previous home owner wasn't aware of this and now has taken out insurance for a year on the driveway one week before settlement for which i'm expected to pay.

I'm a little annoyed I wasn't told about this earlier and that I haven't been given the option to select my own insurance options. I have been told I can ask my neighbour to split the cost, but there is no guarantee that they will pay for this.

Has anyone been through something similar and can you confirm whether it is legally required now?

Update: Thanks everyone. I think I will just pay it, and attempt to cancel the insurance with Seller insurance company after settlement. I have been discussing insuring the driveway with my insurance company, and they said if it's not covered by strata management it would automatically be covered by my their home owner policy I would just need to add the value of the driveway to the policy. They cover up to 50m driveway, so more than enough.

Annoyingly the price of insuring just the driveway through Seller Insurance company is the much more than the amount of insuring a house and driveway through my insurance company. Also seller insurance policy doesn't even make sense, it states that the strata management has an income of $2000 when there is no income.

Update 2: After further digging I found it wouldn't be possible to cancel the sellers insurance without the consent of the neighbour. If we were able to have the neighbour agree the money would be returned to the sellers credit card. I've also found that the neighbour lot is owned by the Housing Authority who have insurance with the 'Insurance Commission of Western Australia'. They are unable to provide their current insurance information with the lot and won't be able to provide confirmation in cancelling the policy taken out by the seller. It looks like I'm left with no option but to pay it.

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Comments

kawinuyo on 31/03/2022 - 18:40

+3

Are you able to get the previous owner to cancel his insurance and get pro rated refund I mean that's his cost if it was legally required… And then you take out insurance of your own choice from the date the settlement goes through?
- garetz on 31/03/2022 - 18:44
  
  Doesn't work like that, insurance is a bet against something happening over a specific period of time, you cannot get a pro rata refund.
  - kawinuyo on 31/03/2022 - 19:00
    
    +4
    
    I'm pretty sure you can get pro rated refund for unused section is you cancel the policy early. I've done this with youi when I moved house.
    - garetz on 31/03/2022 - 19:03
      
      I guess it depends on the insurance provider.
    - AndyC1 on 31/03/2022 - 19:25
      
      I have cancelled insurance and you don't get it all back pro-rata as there are government charges and these are not refunded in NSW.
- KingQuokka on 31/03/2022 - 18:55
  
  I will try this. Thanks.
  
  Update: I contacted my conveyancer, they said unfortunately there is nothing I can do. The seller has done the right thing and taken out insurance. Also sharing the cost is only sometimes done, not always. So I will need to pay the full amount.
- KingQuokka on 31/03/2022 - 19:48
  
  Update: Also the legal requirements are here: http://classic.austlii.edu.au/au/legis/wa/consol_act/sta1985…
  
  Looks like insurance is required for survey-strata. But I think some people opt to not do this or aren't aware of the requirement, like the seller.
garetz on 31/03/2022 - 18:48

+2

I wouldn't pay for it, it was a requirement of the owner, if he wanted you to cover the cost it should have been stipulated on the contract.

Anything between you signing the contract and settlement is his problem, he should of at least consulted with you first.

Since he is the primary beneficiary of the insurance policy if anything does happen he will get the money, not you. I very much doubt it is transferable as the insurance policy is not owned by the residence.

Also get him to ask the neighbor to split the cost, its his choice, his responsibility, more than likely he took out the insurance because his solicitor told him without it, you could pull out of the sale more than likely.

Strata should take out the policy and not the 1 owner.
- KingQuokka on 31/03/2022 - 19:06
  
  Thanks the insurance has been paid by the seller yesterday evening. It has been taken out against the driveway and doesn't mention the sellers name. My conveyancer believes due to this there is no issue of having to transfer the policy.
  
  I will attempt to ask that either the insurance is cancelled or that I only pay half like you mentioned.
- KingQuokka on 31/03/2022 - 19:38
  
  Update: I contacted my conveyancer, they said unfortunately there is nothing I can do. The seller has done the right thing and taken out insurance. Also sharing the cost is only sometimes done, not always. So I will need to pay the full amount.
Drakesy on 31/03/2022 - 18:52

I'd wait for him to pay upfront for the insurance before settlement.

But even then if you're a strata, the cost for the driveway should be split between all properties.
- AndyC1 on 31/03/2022 - 19:26
  
  I agree the strata needs to pay the insurance.
- KingQuokka on 31/03/2022 - 19:40
  
  There is no strata management it is only a 3 lot survey strata with two houses.
woodg on 31/03/2022 - 23:09

Take look t the link below, particularly the second last paragraph. It says that each lot must contribute to the maintenance and insurance of the common property. It uses a driveway as an example.

https://stirlingandroe.com.au/insights/what-is-the-differenc…

WA Survey Strata Common Property Driveway Insurance

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