Most community scheme associations insure some or all the buildings in the scheme and for their movable assets. In addition they must all have fidelity insurance cover and many take out public liability and other forms of insurance.
Because it is the association, rather than its members, that places this insurance, it is only the association that can start the process of making a claim against the insurer.
There are various situations in which members individually or as a minority group may feel that the association should take action under an insurance policy, but they are unable to get it to do so.
In terms of section 39 (1) (b) of the CSOS Act, an application may be for:
“an order requiring the association to take action under an insurance policy to recover an amount”
Examples of issues
Where a group of owners feel that the association does have a good claim against its insurer, but the scheme executives disagree, saying that they don’t want to throw good money after bad, those owners may decide to make an application to the CSOS for an order obliging the association to take all reasonable steps required to enforce its rights against the insurer.
An individual owner may feel that the association’s insurer has unreasonably applied an “excess” or “first amount” provision in the policy and want the association to take action to oblige the insurer to pay out the full amount of the claim.
Example of order
An example of the type of order the CSOS could give is:
The Naboomspruit Hills Home Owners Association must, on or before [insert date], take action against National Fire Insurance Company under insurance policy number AXD1324/2015 to recover the costs of fire damage repairs to its clubhouse.
This order takes effect immediately.
Is this not the right order – is either the type or category is wrong for your matter?
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