Unit owners may exempt themselves from the requirement to take out and maintain building insurance. This can only be done if the development contains class B units, and the exemption resolution must be unanimous. This typically occurs where each unit has building insurance, and unit owners decide that additional building insurance for the whole complex is not required.

Under the previous arrangements, once the decision to be uninsured was made, it later lapsed at the next annual general meeting. This was an issue as there was no notification of this exemption lapsing, meaning that owners, and particularly prospective and new owners, may not have been aware that their unit did not have building insurance.

The Unit Titles (Management) Act 2011 has been amended to:

  • require owners corporations to register their resolution to exempt themselves from building insurance with the Registrar-General within three months of the decision
  • clarify that the exemption remains in effect until another resolution amending or revoking the exemption resolution is registered and
  • note that the exemption resolution does not affect the requirement for an owners corporation to take out and maintain public liability insurance.