Please see attached invoice for body corporate insurance for a period of 12 months from the date of practical completion.
Please let me know once paid, and I will send through Certificate of Currency.
Many of you have probably received this e-mail (or similar) and wondered – why am I responsible for paying this?
Simply put, Body Corporate legislation requires the original owner (you the developer) to place the body corporate insurance for 12 months from registration (refer clipping below). However, the catch is, you will recover most of the monies outlaid.
The portion of insurance remaining after the sale of a lot will be adjusted in settlements so that you recover what is remaining on the policy from each owner. We will ensure documents are made available as soon as possible for your solicitor after registration so that your settlements can be scheduled accordingly. Lastly, we can schedule the first levy date after the date of your first settlements (given this is reasonable) so that there is a full recovery from an insurance standpoint on the first round of settlements.
An insurance cost to also consider is the period between practical completion and registration. The policy is generally placed at practical completion as this is when the builder’s insurances will cease. However, as noted above, the original owner needs to place insurance for 12 months from registration. To achieve this, we will endorse the policy as at the date of registration. An invoice will then be provided for this period and you as the original owner will be responsible for payment and this will not be recoverable.
20 Lot Townhouse Scheme Example
Reach practical completion May 4th – $6000 policy is placed and paid by the developer.
Registration Achieved May 25th – $400 endorsement to policy and paid be the developer.
First round of settlements June 1st – 15 townhouses settle – Recover $4,500 (approx.).
Second round of settlements June 15th – Remaining 5 townhouses settle – Recover $1,320 (approx.).
Original owner outlays $6,400 for insurance purposes.
To get in touch with our team, please contact:
0411 352 409