Standard insurance policy wording states:
You (the insured) must take all reasonable care:
… to comply with any law, by-law, safety requirement, Australian Standard or regulation of any Government or Local Government body, including but not limited to those covering the disposal of waste products and the handling, storage or use of flammable liquids or substances, gasses or toxic chemicals.
We (the insurer) will not be liable for loss, destruction, damage, liability, accidental injury or illness caused or contributed to by Your (the insured) failure to comply with any of the above conditions.
A motion prepared for an AGM of a prominent Gold Coast residential scheme stated:
It is well known that there are some owners in the scheme, offering their unit for rental on a short-term basis.
This activity is unlawful in Residential Class 2 buildings as it contravenes:
- Council Zoning of Residential,
- Development Approval for Residential Multi Unit,
- Class 2 Building Classification establishing Dwelling Use,
- Fire Safety Regulations determining usage as Dwelling Units,
- By-law stating: All lots in the scheme shall be used for residential purposes only.
An owner using their lot for an Unlawful Use, puts at risk the insurance cover required by law to be undertaken for the protection of all owners in the scheme.
The insurer’s response
AIG have confirmed that if short-term rentals do not meet council approval this could be viewed as not following reasonable care under the policy wording and may potentially jeopardise claims under all sections of the policy wording.
In the circumstances BCB recommend the Body Corporate investigate and take appropriate steps to ensure they meet all requirements in order to avoid any implications for the policy.
WHICH PROSPECTIVE GOLD COAST COUNCILORS WILL GUARANTEE COUNCIL’S DUTY TO ENFORCE PLANNING LAW TO SECURE LEGISLATED INSURANCE COVER?
The Gold Coast City Council has failed to address hundreds of Airbnb/Stayz type complaints to enforce laws that addresses Unlawful Use of Residential property by tourists and short stayers, compromising insurance cover as demonstrated above.
A /Grenfell Tower/Cladding/Certifier/Insurance type debacle exposing ALL RATEPAYERS.
INCOMING COUNCILORS MUST PROMISE URGENT ACTION