Queensland – 22 March 2012
The Federal Government’s Parliamentary inquiry into the high cost of strata title insurance in north Queensland handed down a report and recommendations yesterday providing apartment owners with some hope of financial relief.
BCS Group Chief Operating Officer, Jason Starr-Thomas said that the recommendation calling on the Queensland Government to provide a 12 month moratorium on stamp duty for strata properties was a good start. BCS was one of over 430 organisations and individuals to provide submissions to the inquiry.
“Now the challenge is for both sides of politics to agree to this in the lead up to the state elections in Queensland this weekend,” Mr Starr-Thomas said.
The report also recognised the urgency of the issue of residential strata title insurance affordability. It stated that “unit owners are already experiencing financial stress and indications are that these types of premiums are expected to continue to rise. Increases to date have been substantial, and continuing increases of this magnitude are clearly unsustainable for unit owners.”
“Certainly for some of our clients the insurance situation is serious. In a lot of cases bodies corporate have had to reduce the allocation to their sinking funds in order to cover the costs of their insurance. This means they potentially will have less money to spend on building maintenance in the future, which will further erode the value of their major asset especially if maintenance is allowed to slip,” Mr Starr-Thomas said.
“The recommendations at least encourage agencies such as the Australian Consumer and Competition Commission (ACCC) to investigate whether there as been any improper or anticompetitive behaviours taking place. What is welcome is that the pressure is now on the Federal Government to look at a range of issues and investigate ways of addressing the seriousness of the cost of insurance in north Queensland.”
BCS has also been working with insurers on strategies to reduce premium costs and utilizing its strength in the market place to stimulate competition to reduce premiums.