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Water damage within a strata-managed property is not only inconvenient—it can be costly and legally complex. Residents and owners are often unsure of where the financial and repair responsibilities lie when water leaks, burst pipes, or drainage issues occur. The answer is rarely straightforward, and understanding the legal and practical boundaries between individual owners and the owners corporation is essential.

In Australia, water damage claims are among the most common disputes in strata-titled properties. Resolving them often involves examining the source of the damage, who owns the affected infrastructure, and the applicable by-laws or insurance policies. This article provides a clear, structured overview to help owners and committees understand strata responsibility for water damage.

Understanding Liability in Strata Schemes

Before delving into who is responsible for what, it’s important to understand how strata schemes are structured in terms of ownership. The liability for water damage is not determined solely by where the damage occurred but also by who owns the affected parts of the property and how maintenance responsibilities are defined.

In most cases, this comes down to differentiating between individual lot ownership and common property. Once those lines are clear, understanding the legal responsibilities for water damage becomes more straightforward.

What Defines Strata Ownership and Common Property?

In strata schemes, ownership is divided between individual lots (units) and common property. The boundary between these areas dictates who is accountable for repairs and damage. Typically, the owner corporation is responsible for maintaining and repairing common property, while lot owners are responsible for their own internal spaces.

Common property often includes items such as external walls, roofing, shared plumbing infrastructure, and stairwells. By contrast, a lot of property includes internal walls, fixtures, and fittings within each unit. If water damage originates from an element considered common property, it is generally managed and funded by the strata. If it originates from within a private lot, the owner may bear responsibility, particularly if negligence or lack of maintenance is involved.

Understanding these definitions is essential in assessing each situation involving water-related incidents. Misunderstandings over these boundaries can lead to disputes, delays in repair, and even tribunal cases.

How Liability is Determined in Water Damage Cases

Liability is primarily determined by identifying the source of the damage. For example, if a pipe embedded in the common property wall bursts, the owners’ corporation is usually responsible for repairs. Conversely, if a leaking shower or appliance causes water damage within or beyond a unit, the owner may be liable.

In many cases, water travels across several units or common areas, making the identification of the origin point critical. Qualified trades and building assessors are often engaged to assess the source and cause of the damage.

Responsibility can also hinge on who installed or modified the structure. For instance, unauthorised renovations involving plumbing can shift responsibility away from the owners’ corporation. Understanding these nuances is key to preventing disputes and managing risk.

The Role of Insurance in Water Damage Claims

Does strata insurance cover water damage? Insurance is often one of the first places owners look when water damage occurs, but not all situations are covered. While strata insurance provides a degree of protection, it’s not absolute. Understanding how insurance works in strata schemes is vital for owners looking to manage their risks effectively and avoid unexpected out-of-pocket expenses.

This section examines what typical strata insurance covers and when an individual owner may need their insurance to be fully protected.

What Does Strata Insurance Cover?

Strata insurance is designed to protect the shared structure and fixtures of a strata-titled property. It usually covers damage to common property caused by insured events, including burst pipes or storms. However, it often excludes damage caused by gradual deterioration, lack of maintenance, or internal contents within a lot.

In practice, claims are accepted or denied based on the insurer’s assessment of whether the damage relates to insured infrastructure and causes. Water damage caused by external weather events may be covered, while damage from ongoing leaks or corrosion might not be.

Policy exclusions, caps, and excesses can influence outcomes, so owners should familiarise themselves with what is and isn’t covered under the scheme. Even when damage is covered, disputes may arise over who pays the insurance excess or how repairs are managed.

When Owners Need Their Insurance

While strata insurance provides coverage for common property and shared infrastructure, it typically does not extend to the contents and fixtures within individual lots. As such, lot owners are strongly advised to maintain their insurance policies to fill this gap. These policies ensure that in the event of water damage caused by internal issues, owners are financially protected and can recover promptly without relying solely on strata insurance.

• Contents Insurance for Residential Owners: Protects household items such as furniture, appliances, electronics, and personal belongings. This is essential when water damage affects areas within the lot, particularly from incidents like overflowing sinks or broken dishwashers.
• Landlord Insurance for Investment Properties: Covers items installed by the owner, including curtains, carpets, and light fittings, and may also offer protection against rent loss during repairs. This policy is especially relevant when tenants occupy the property and are not responsible for damage caused by internal faults.
• Internal Fixtures and Improvements Cover: Items not included in the original building structure, such as upgraded kitchen cabinets or bathroom fittings, may not be covered by strata insurance. Owner insurance should include protection for these enhancements.
• Business or Commercial Contents Insurance: In mixed-use or commercial strata properties, businesses must secure contents or equipment insurance. This ensures assets like computers, stock, and fit-outs are protected in the event of internal water-related incidents.
• Minimising Coverage Gaps: Having an individual policy ensures owners are not left to cover costs out of pocket when strata insurance does not apply. It provides clarity, faster processing, and reduces the likelihood of disputes between owners and the strata committee.

Preventing and Managing Water Damage

Effective prevention and management strategies are crucial to reducing the frequency and severity of water damage in strata properties. Both the owners’ corporation and lot owners share responsibility for regular inspections, timely repairs, and clear communication. Establishing structured maintenance and response systems not only prevents damage but also simplifies accountability when issues arise.

Maintenance Obligations and Early Detection

Proactive maintenance plays a central role in preventing costly water-related issues. Identifying early signs of wear, leakage, or system failure allows both owners and committees to act before problems escalate. Understanding the division of responsibilities ensures maintenance tasks are correctly allocated and completed on schedule.

• Owners Corporation Responsibilities: These include maintaining shared plumbing infrastructure, external guttering, stormwater drains, roofing, and building membranes. Neglect in these areas can lead to large-scale water ingress, impacting multiple lots.
• Lot Owner Responsibilities: Owners must maintain internal plumbing, fixtures, appliances, and fittings. Common areas of concern include washing machine hoses, dishwashers, and taps, which are often the source of internal flooding events.
• Routine Visual Inspections: Regular checks of ceilings, walls, tiles, balconies, and skirtings can reveal early indicators of water seepage. Discolouration, mould growth, or musty smells are typical warning signs.
• Scheduled Maintenance Cycles: Coordinating with plumbers or strata maintenance providers to service or assess key plumbing systems annually can help detect wear and prevent failures.
• Clear Documentation and Maintenance Logs: Recording inspections, repairs, and service dates supports accountability and can be crucial during insurance claims or dispute resolution.

Reporting and Resolving Issues Efficiently

Prompt reporting and organised resolution procedures are vital to minimising the damage and disruption caused by water-related incidents. When a clear communication pathway exists between owners and the strata committee, issues can be resolved faster and with less contention.

• Timely Communication by Lot Owners: Owners should notify the strata manager or committee immediately upon discovering signs of water damage. Include photos, descriptions, and details on when the issue was first noticed.
• Strata Manager and Committee Response: The committee should acknowledge the report, assess urgency, and engage qualified trades as required. Quick response reduces escalation and cost.
• Independent Assessment and Documentation: Where the source of damage is unclear, independent assessors or licensed plumbers can provide neutral findings, helping establish liability and claim validity.
• Dispute Resolution and Mediation: If liability is disputed, owners may refer the issue to mediation or formal resolution through a state tribunal. In NSW, this would typically involve the NSW Civil and Administrative Tribunal (NCAT), which can issue enforceable decisions.
• Record Keeping and Transparency: Keeping clear records of complaints, inspections, and actions taken ensures transparency and supports all parties in managing the issue professionally.

Conclusion

Water damage in strata properties involves several layers of responsibility, and the correct course of action depends on the source, ownership, and insurance arrangements. Whether the issue stems from internal plumbing or shared infrastructure, understanding how liability is structured within strata schemes is essential.

By staying informed about strata plumbing responsibilities, maintaining appropriate insurance, and acting quickly when water damage occurs, both owners and committees can reduce the stress, costs, and disputes associated with these incidents.

Need Support with Strata Water Damage Issues?

If you need expert guidance on managing water damage, understanding strata plumbing responsibilities, or navigating insurance processes, Strata One is here to assist. Our team provides trusted, professional strata management tailored to ensure that both common property and lot-owner issues are handled with accuracy and transparency.

Contact us today to ensure your strata property is well-managed and your rights are protected.