Does insurance cover underpinning on strata units?

Discussion in 'Property Management' started by DrunkSailor, 25th Sep, 2017.

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  1. DrunkSailor

    DrunkSailor Well-Known Member

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    Pretty basic question but couldn't find any results doing a google search. An apartment I'm interested has some major cracks on the external walls due to severe foundation failures. The estimated cost per owner is 20-25k (it's a small block of probably 8 units). Whether the owners have all agreed to pay this or not I don't know. They are having a meeting to discuss is shortly. Anyway, agent says it's possible insurance might cover it. I'm skeptical of this because in Footscray a lot of properties suffer foundation issues and no agent has suggested costs will be covered by agents, they usually just quote cost per owner which is verified in the Owners Cert.

    A competing agent told me the risks involved in purchasing this apartment is that if all the owners don't agree to paying the 25k levy then the job won't get done and the council will deem it uninhabitable.

    Thoughts?
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Insurance generally will not cover underpinning unless there is was caused by someone eg vehicle damage, building warranty claim etc. A lack of maintenance or lapsing of statutory warranty will generally prevent an insurer becoming involved.
     
  3. D.T.

    D.T. Specialist Property Manager Business Member

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    Depends on what caused the to be needed underpinning. Generally its just from old age or normal ground movement, in which case no.
     
  4. Pixie

    Pixie Active Member

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    And if it's due to water or tree roots, no chance insurance will pay
     
  5. Pixie

    Pixie Active Member

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    If I was you, I would run far far away from this property. Not worth the headache.

    From my personal experience too.