Leaking balcony in a sectional title scheme: Insurance claim or wear and tear?

A leaking balcony. Few things cause as much frustration in sectional title schemes.

The questions usually follow quickly:

• Is this an insurance claim?
• If not, who is responsible?
• And how could anyone have prevented this if the waterproofing sits under tiles?

Let’s unpack this carefully.

When is a leaking balcony an insurance claim?

Insurance policies, buildings policies that is, can be best summarised as follows:

The insurance policy indemnifies/protects (1) the insured against (2) financial loss as a result of (3) sudden and unforeseen (4) physical damage to (5) insured property that occurs at an (6)

identifiable date/time as a result of a (7) single, identifiable cause that is (8) not otherwise excluded under the current policy terms and conditions.

This defines when the event meets the policy criteria for a claimable event to be true.

Insurance is event-based. It responds to something happening suddenly at a moment in time, not to something ageing, occurring over an extended period.

Scenario 1 – Storm damage

A severe storm hits. Driving rain and hail, causes damage to the balcony structure. Here, the storm is identifiable, the timing is clear and the damage is sudden.

This usually qualifies as an insured event.

Scenario 2 – Waterproofing deterioration under tiles

This is where most disputes arise. The waterproofing membrane beneath the tiles has deteriorated over time. Eventually, water starts penetrating into the section below.

Owners often say – “How could I maintain something I cannot even see?”

That’s a fair emotional response. but insurance does not look at visibility. It looks at cause.

If the cause is age-related deterioration, perished waterproofing , gradual cracking, failed sealants, corrosion, then the issue is wear and tear, even if it was hidden from view.

The first visible leak may feel sudden and first sudden damage portion might well be covered but the deterioration that caused it is not of a sudden nature.

In these cases, the failed waterproofing itself is not insured.

However, the resultant sudden damage below may be considered, depending on policy wording.

Scenario 3 – Ongoing balcony leaks

If the balcony leaks every time it rains, and this has been happening for months, this is almost always wear and tear.

Insurance is not designed to fund building components that have reached the end of their lifespan.

Balconies, like roofs, pipes and sealants, age.

At some point, replacement becomes necessary.

That is part of property ownership, not an insurance event.

Scenario 4 – Blocked drains and overflow

Sometimes the problem is really simple.

Leaves accumulate. The drain blocks. Water pools and overflows.

The first flooding event may be covered, however, ongoing lack of cleaning can place a scheme in a difficult position, because policies generally require reasonable care to prevent loss.

Again, the focus is not blame, it is whether the damage was sudden and unforeseen.

Maintenance vs wear and tear

Rather than framing these matters as “failure to maintain,” it is often more accurate to say “The cause was wear and tear”.

Waterproofing membranes deteriorate.

Tiles loosen.

Sealants perish.

Pipes corrode internally.

Even when hidden from sight. Buildings have lifecycles. Insurance responds to events, not to ageing.

Who is responsible?

If it is not an insurance claim, the next step is to determine responsibility.

This depends entirely on the sectional plan.

• Is the balcony part of the section?
• Is it common property?
• Is it an exclusive use area?

If it forms part of the section

The owner is normally responsible for upkeep and replacement, therefore, in terms of prescribed rule 23.2(b), the owner pays the excess.

If damage also occurs to the section below and an insurance claim is triggered, the excess may ultimately be recoverable by that owner, from the owner above if their balcony caused the damage.

If it Is common property

The body corporate is generally responsible.

If an insured loss (damage) occurs, the body corporate will normally carry the excess.

If it Is an EUA (Exclusive use area, albeit still common property)

Maintenance cost responsibility typically rests with the exclusive use holder, depending on how the rights were created and recorded in the rules. Also, how the exclusive use area contribution, if any, is collected and managed. In practice, costs are usually allocated to the owner who benefits from that area.

The bottom line

Most leaking balconies are not insurance claims, but rather, mostly they are wear and tear, age-related deterioration, gradual failure of waterproofing, lifecycle replacement issues.

Insurance assists when there is a sudden insured event. It does not function as a maintenance or replacement fund.

Sometimes the most accurate explanation is simply this:

The building component has reached the end of its useful life. Unpleasant? yes. Common problem? absolutely. Insurable?  usually not.