Floating Floors: Who Pays?

As tastes have changed, so have floor coverings. Floating floors have become increasingly popular in units, replacing carpet and tiles for many. But this trend has created some confusion. If damage occurs, whose responsibility is it to replace or repair them?

Let's be clear about what is meant by 'floating floor', firstly.

A floating floor is usually made of laminate or veneer. Instead of being secured, it 'floats' on the sub-floor, held in place by its own weight. The floor usually meets the wall edge with an expansion gap, which is covered by skirting. Often these floors include additional layers to deaden sound and reduce laminate movement.

By way of contrast, flooring which is nailed, glued or otherwise secured to directly the sub-floor surface is not viewed as 'floating'. In fact, it is generally viewed by insurers as a permanent flooring fixture.

This difference is crucial. Floating floors are regarded as cosmetic features which can be easily removed or replaced.

This has an impact on insurance. Put simply:

• Floating floors are the lot owners responsibility and should be covered by personal contents insurance if owner occupied, or by landlords insurance if tenanted.
  
  
• Permanent floors are the responsibility of the owners corporation and should be covered by strata insurance. These are covered by the Strata Schemes Management Act 1996.

The Act mentioned above specifically covers owners improvements to a building "other than paint, wallpaper and temporary wall, floor and ceiling coverings". Floating floors, therefore, do NOT form part of an 'insurable building' for the purposes of Strata insurance. They are viewed as 'temporary floor coverings'.

Of course, this matter can still be confusing at times. Reputable insurance companies will seek to view each case on its merits, and some even offer to underwrite risks to cover 'floating floors' on behalf of the Owners Corporation for an additional fee.

As with all elements of insurance: it is best to fully research current insurances and ensure appropriate cover is in place - BEFORE a claim needs to be made. If all else fails, asking a responsible insurer will make matters clearer all round.

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Farewell the incandescent light!

It has been predicted that by 2010, the traditional incandescent light bulb will no longer be available in Australia, making this country the first in the world to phase them out completely.

Incandescent bulbs haven't changed much in the 125 years that they've been available: and the bad news is that they use 80% more electricity than energy-saving globes, whilst producing the same amount of light. Replacing every incandescent bulb in Australia with energy-efficient ones could reduce greenhouse gas emissions by as much as 800,000 tonnes per year, so predicts Minister for the environment Malcolm Turnball.

Energy efficient globes are good news for a number of reasons: they last up to 12 times longer than conventional bulbs, and consume much less electricity meaning cost savings for every household. On average, if each property changes just 10 conventional globes to energy-efficient ones, they would save approximately $130 per year on their energy bill and reduce one whole tonne of carbon emissions.

Saving money and the environment doesn't need to wait until 2010, however. Following these simple guidelines will make a difference right now:

• Ensure that the strata contractor you use to change globes on your property replaces them with energy-efficient versions.

• Ensure that light timers are set correctly: there's no point in having lights on during the day.

• Keep light enclosures and covers clean to ensure light output remains high.

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Things that go beep in the night: managing alarm noise

Faulty alarm systems are irritating to everyone: but if the one in your building is misbehaving, you could be risking a hefty fine.

Most of us have experienced the exasperation which comes from the sounding of a faulty alarm - especially late at night. However, disturbing neighbours with faulty building alarms can be more than just irritating: current legislation allows for negligent owners to be fined for continued noise.

With building alarms, if the noise from one of them can be heard in a neighbouring residence, the law states that:

• If it was installed after 01/12/1997, it must not sound for more than 5 minutes.

• if it was installed before 01/12/1997, it must not sound for more than 10 minutes.

The occupier of a building is responsible for the alarm system and could be subject to fines if it sounds for longer periods than stipulated above.

If a neighbouring building to you keeps sounding, it is advisable to contact the Police. They will ascertain whether the security of a building has been breached. Whilst they do not have permission to enter an unoccupied premises to stop faulty alarms from sounding, they can accompany council officers who are authorised to do exactly that. Council officers require a warrant to enter an unattended residential building to deal with a faulty alarm.

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Negotiating the Strata Insurance maze

These days, insurance companies offer to cover you for all kinds of eventualities, and the choice has never been bigger. In the world of Strata Management, this is no exception.

However, how do you determine whether a policy meets up to your requirements? How can you compare one insurer over another so as to determine what their quotation contains? What important areas should be considered, besides premium?

When comparing Strata Insurance companys and the quotations they provide, have the following points in mind:

COMPANY Robustness

As with all types of insurances cover, it is advisable to find out as much about the insurance company providing the cover as possible, especially its financial strength and stability. Smaller insurance companies intent on making short-term gains will struggle to deliver in the medium to long term, so doing research is essential. Carefully consider how many claims are denied, how quickly claims are processed and paid and how customer-friendly administrative services are. Be especially careful of companies offering extremely or unusually low insurance premiums.

Policy Coverage

This should be examined carefully so as to insure that all members of the Owners Corporation have their assets adequately covered. All policies should meet the requirements laid out in the Strata Schemes Management Act (click here for more information on the act).

Under-insurance

In the event of a significant or total building loss, the full replacement value of the building needs to be taken into consideration. The Strata Schemes Management Act obliges an Owners Corporation to insure the building for its full replacement value, and under-insuring has a direct impact on the Owners Corporation who will need to cover any shortfalls. Replacement value must include correct, accurate and up-to-date valuations which cover inflation, increased construction costs and other elements which might affect the total insured value.

Catastrophe cover

Whilst an Owners Corporation must insure a building for its full replacement value, it is recommended that the policy include catastrophe cover. Rebuilding following a catastrophe (e.g. earthquake, hurricane) is shown to cost more than rebuilding due to single event (e.g. building fire) because of the impact to the surrounding infrastructure and service availability. It is recommended that catastrophe cover equal to 30% of the replacement value of the building be applied. Underinsurance in this regard may result in members of the Owners Corporation finding the shortfall themselves.

Swift Claim Payments

Having claim payments delayed can impose considerable cost and inconvenience for Owners Corporations, especially when contractors and suppliers require payment for work completed. Outstanding costs may need to be settled by the Owners Corporation whilst waiting for claim payments to be processed. Asking for references to demonstrate swift payments is one way to insure delays are avoided.

Compare Premiums Carefully

Whilst premiums can vary, usually the cover attached to them does too. Whilst shopping around for a competitive premium, insure that the cover and benefits offered are comparable. Remember that when spread amongst the Owners Corporation, the difference between premiums may be minimal, but the service offered could have a considerable impact on all members.

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