Owners of a Brisbane apartment will have to pay an $11,000 excess after a flexi hose burst in their ensuite bathroom, causing wider damage in the building and leading to the complex lodging an insurance claim.

The owners unsuccessfully argued to an adjudicator that having to pay the full excess was an unreasonable financial burden and they had been given insufficient time to take preventative action.

The decision says the Soleil 501 Adelaide complex consists of 464 lots and common property. The two lot owners said a building manager email on May 5 2021 advised that hoses were susceptible to failure and should be replaced. Just two days later one in their bathroom burst, causing damage to a number of apartments and common property.

The Body Corporate decided to allocate the $11,000 excess to the owners of the lot where the hose failed and an invoice was sent for payment by July 14.

The owners submitted a motion proposing that they provide the body corporate $500 to put towards the excess, with the body corporate to absorb the remainder. The motion was lost by five No votes to zero Yes votes.

An appeal to the Office of the Commissioner for Body Corporate and Community Management was considered by Adjudicator Ron Miskinis. Submissions were also received from two other lot owners and from the Body Corporate committee.

The committee argued that a policy with a lower water damage excess wasn’t available due to claims history, the financial burden for the responsible owners had been mitigated through a claim being made on the Body Corporate policy, and there’s an obligation to maintain the lot, including the flexi hose, in good condition.

A regulatory requirement for an excess not to create an unreasonable burden relates to the decision to implement the specific insurance policy, as opposed to the decision to pass the responsibility of the excess onto the lot owner, it said.

The two lot owner submissions didn’t agree with the excess decision, with one arguing it wasn’t “entirely reasonable or proportionate in the circumstances” and the other saying if the body corporate decided to take out cover with a large excess, then it should be responsible for payment unless the event was attributable to negligence.

The adjudicator found it was the applicants’ responsibility to maintain the flexi house, and they could be held responsible for repair of damage to other lots and common property. He accepted that the body corporate was unable to purchase a policy with a lower water damage excess.

Regulation also states that if an event affects multiple lots, the body corporate can decide “it is reasonable in all the circumstances for the excess to be paid for by the owner of a particular lot”, the decision says.

The decision is available here.