Who pays the excess when copper pipes and taps are stolen from outside the building in a sectional title environment?

The responsibility for paying the insurance excess depends on your scheme’s management rules. Unless specifically amended, most schemes operate under the Prescribed Management Rules (PMRs). These rules outline who is responsible for maintenance, which determines who is liable for the excess when a claim arises, especially when exclusive use areas (EUAs) are involved.

What does Prescribed Management Rule 23.2(b) say?

“A member is responsible for any excess amount that relates to damage to any part of the buildings that the member is obliged to repair and maintain in terms of the Act or these rules, and must furnish the body corporate with written proof from the insurer of payment of that amount within seven days of written request.”

In short:

If the damaged item is within the section or forms part of the owner’s maintenance responsibility (e.g. a geyser or associated plumbing, including hot water pipes leading to the section), the owner is liable for the excess.

When common property is unregulated, meaning it’s not designated for the exclusive use of a specific member or members, the excess is typically paid by the body corporate. Regulated common property, such as exclusive use areas (EUAs), involves more nuance.

If the stolen copper pipes or taps are located within an exclusive use area (EUA) and serve only that area, such as garden taps, the EUA holder is generally responsible. However, if the body corporate collects a specific contribution for the maintenance, insurance, or upkeep of that EUA, then the responsibility may lie with the body corporate.

Where a pipe passes through an EUA but does not serve it (e.g. an external wall pipe serving a bathroom inside the section), such pipes are more likely part of the common property, and thus the body corporate would typically pay the excess.

In summary:

• Inside the section / geyser-related: Owner pays the excess.
• Exclusive use area (e.g., garden taps): The EUA holder usually pays, unless an EUA contribution covers such maintenance.
• Pipes running through an EUA but serving the section: Typically considered common property; the body corporate pays.
• Common property (e.g., pipes on external walls): The body corporate generally pays.

Ultimately, the scheme’s specific management rules and maintenance responsibilities will determine who must cover the excess. When in doubt, refer to your scheme’s rules or consult your managing agent or insurance advisor.