Who pays for water damage in a strata property?

Who pays for water damage in a strata property?

Strata buildings are complex structures. Water pipes, wiring, and ducts are all hidden in walls, floors, and roof spaces to make the property as safe and aesthetically appealing as possible. But when there’s a leak, who pays for water damage in a strata property?

When something goes wrong, like there’s an unplaceable leak in the building, the damages can be expensive and difficult to recover. In Australia, water damage insurance claims have risen by 70 per cent since 2015, with the average claim being over $30,000.

As one of the most common causes of strata insurance claims (second only to wind and hail), water damage impacts premiums. A lot of the time claims could have been avoided with better preventative maintenance.

water damage in strata

There are several reasons why water damage is so common in strata properties. There’s a high number of plumbed-in appliances like fridges and washing machines. This means more connections to water sources, resulting in more opportunities for leaks and bursts. Moreover, because lot owners have far less visibility outside of their own walls than a homeowner with a freestanding house would, it can take longer to identify a problem because you simply can’t see it. And then there’s the issue of responsibility: when it comes to water damage in strata, who pays? The strata takes care of the common property and strata assets, you take care of your lot’s property and assets, but figuring out what components are whose responsibility is often isn’t black and white.

There are many causes of common gradual water damage issues. They include:

  • Leaking of plumbing, taps, or pipes (damage to walls, ceilings, floors)
  • Roof flashings, tiles, and shingles in need of repair
  • Mould, rot, or corrosion from long-term water seepage
  • Deteriorating electrical wiring from water seepage
  • Water seepage from foundation cracks

In the strata environment, it can be challenging to determine the source (and thus, where responsibility lies) of a water leak. Where water ingress can be traced to common property, it’s the strata’s statutory obligation to rectify it. This often cannot be determined without the assessment of a plumber, engineer, or other professional.

Who will pay for this assessment? When a lot owner notices a leak or water damage emerging they can request a committee to pay for this investigatory work, but an owner might decide to pay out of their own pocket first and seek reimbursement later. This is done for expediency – a leak should be investigated immediately, rather than waiting for a committee to convene, because a problem fixed sooner will be a problem fixed more affordably. It pays to note this reimbursement could only apply if the problem was determined to be water ingress from common property.

Both the strata and the lot owners have responsibilities to maintain their respective parts of the complex in good condition. If you’re a lot owner or tenant, you should be vigilant about even minor-seeming things like a dripping tap. As a strata committee, you should have a proactive maintenance plan in place so you can address water ingress sources before they become a problem and cause any real water damage.


If you’d like to find out more on insurance for your property, download our FREE Community Living guide on strata financials. Or for a consultation to review your common property insurance by our CommunitySure insurance team, click here.

Helpful resources and services
We care about what you have to say. Share your feedback here.