Strata Water Damage

Water damage in a strata building is complicated by the intersection of multiple insurance policies, multiple lot owners, a body corporate, and often unclear boundaries between lot and common property. Establishing who is responsible — and whose insurance responds — is the critical first step before any restoration work begins.

• Common property — body corporate's responsibility: The body corporate (owners corporation in NSW and VIC) is responsible for maintaining and insuring the common property. This includes the building envelope (roof, external walls, windows forming part of the structure), shared pipes and drainage within common property walls, common area ceilings and floors, and shared services infrastructure. Damage originating from common property is covered by the body corporate building insurance.
• Lot property — individual owner's responsibility: Each lot owner is responsible for fixtures, fittings, and improvements within their own lot. Pipes that solely serve a single lot and are located within the lot boundary are typically the lot owner's responsibility under most strata legislation. The lot owner insures these under their individual lot or strata title insurance.
• State legislative differences: The boundary between lot and common property differs under each state's legislation. QLD's Body Corporate and Community Management Act 1997 (BCCMA) generally defines the lot as everything inside the internal face of boundary walls. NSW's Strata Schemes Management Act 2015 has a different default boundary that includes the internal plaster surfaces as part of the lot. VIC's Owners Corporations Act 2006 definitions also differ. Always check your strata plan and the applicable legislation.
• The boundary dispute: Strata water damage claims frequently trigger disputes between the lot owner's insurer and the body corporate's insurer about where the damage originated. A burst pipe within a shared wall can result in competing denials if each insurer argues the source was on the other party's side of the boundary. Independent forensic assessment by an IICRC-certified contractor documenting the source location is often essential to resolve these disputes.
• Upstairs-to-downstairs damage: If an overflow or leak in one lot damages the lot below (the most common strata water event), the downstairs lot owner's insurer covers the immediate restoration while the insurers determine liability and subrogation. Document the source clearly before any restoration work begins.

In major water events — cyclone, flooding, building-wide pipe failure — the body corporate and strata manager have an active coordination role that goes beyond individual lot restoration.

• Emergency response coordination: The body corporate manager should be notified immediately in any event that affects common property or multiple lots. The manager has authority to instruct emergency trades to make safe common property, engage building assessors, and lodge the body corporate's insurance claim. Individual lot owners should also lodge their own claims in parallel — do not wait for the body corporate process.
• Building insurance — mandatory in all states: All strata buildings in Australia must hold building insurance. In QLD, the body corporate must insure for full replacement value under the BCCMA. In NSW and VIC, equivalent obligations apply. The building insurance covers the common property structure and, depending on the policy, may extend to cover lot fixtures to original specification (the “as built” standard).
• Lot owners still need individual insurance: Building insurance held by the body corporate does not cover improvements lot owners have made above the original specification (upgraded kitchens, tiling, flooring), nor does it cover contents. Lot owners need their own strata title insurance to cover improvements and their individual liability within the lot.
• Slow body corporate response: If the body corporate strata manager or committee is slow to respond to water damage affecting common property, individual lot owners should send formal written notification of the damage and its impact on their lot. Keep records of all communications. Most strata legislation has dispute resolution mechanisms for lot owners to compel the body corporate to carry out necessary maintenance and repairs.

When water damage affects multiple lots simultaneously — as occurs in cyclone events, building-wide pipe failures, or major flooding — coordinated structural drying is essential to achieve restoration outcomes and prevent secondary damage.

• Why coordinated drying matters: In a multi-storey strata building, the structure is interconnected — floor slabs, shared walls, and ceiling cavities connect adjacent lots. If one lot is dried in isolation while adjacent wet lots remain unaddressed, moisture migrates across the building fabric, preventing drying targets from being reached in the “dry” lot and creating conditions for mould to colonise shared structural elements.
• IICRC S500:2025 multi-lot requirements: Structural drying in buildings with multiple affected lots requires a coordinated psychrometric monitoring programme that tracks drying progress across the affected zone as a whole. Individual lot contractors working independently may not achieve the documentation standards insurers require for multi-lot events. A lead contractor coordinating across all affected lots with a single psychrometric log is the preferred approach for insurer compliance.
• Cross-contamination prevention: In Category 3 water events (sewage, floodwater), containment between lots is critical to prevent cross-contamination. Decontamination of shared building elements (floor slabs, cavity walls) must be completed in a coordinated sequence before any lot is closed up. Independent lot-by-lot approaches risk spreading contamination.
• Insurance coordination for multiple claimants: Where multiple lot owners have separate insurers, restoration contractors may be engaged by different parties. Coordinating access and sequencing of works between competing insurers and their appointed contractors is a common source of delay in strata restorations. Early engagement of the body corporate manager as a neutral coordinator, with a single project scope, produces significantly faster outcomes.