Cracking In Strata Building

Stratarama Cracking In Strata Building

Cracking in buildings is a very common issue faced by the people of Adelaide and South Australia. The effects and issues arise throughout the property and not simply in Strata Title of Community Title properties.

What Is Cracking?

Buildings and other constructed structures are moving constantly, yet for the most part, these movements occur at such a slow rate that it is often unnoticeable. These movements can occur for many different reasons, ground movement, failure or deterioration in the structure, natural or unnatural subsidence, etc. On occasions the structures (depending on age, level of movement, etc will crack whether it be superficial, aesthetic and hairline in nature or more extreme and even structurally concerning. The presence of these cracks and deformations can be outwardly unpleasant visually to Residents, but the more serious cracks, if not taken care of properly, can influence and undermine the steadiness of the structure and cause safety concerns for those with-in or surrounding the building.

In recent years we have seen a number of structurally concerning Buildings in the Eastern States presented in the News and the ramifications showing how these large structural cracks have undermined those buildings and resulted in extreme financial hardship for Owners and Body Corporate Members.

Some Common Reasons Of The Cracking:

A few of the common causes are discussed below. Keep reading to find out more about them.

• Soil Issues:

Cracks in buildings may occur as a result of movement in the soil, soils shifting and allowing the building to move. Some of these movements are natural and will expand and contract each year to an extent depending on the moisture levels of the soil. Changes to surrounding soils can play an impact (i.e lack of moisture or removal of trees), etc. Certain areas in South Australia are more prominent for soil movement due to the types of soils and clays in those suburbs.

• Contraction Of Clay:

When the clay found underneath the property shrinks, cracks are likely to appear. When this clay or soil contracts or shrinks, cracks are likely to appear. When you are in a dry area for example (and as Australia has seen plenty of droughts in recent periods) you can physically see how the top layers of clay crack and open up then may contract again. In some areas, Buildings are sitting on soil just like this, sometimes deeper into the ground and just as the soil moves, the building sitting on top may move along with it.

• Due To Changes In Weather Or Temperature:

Thermal or seasonal cracking is another common cause of cracking in a building that occurs due to changes in weather and temperature. As South Australia faces extreme weather throughout the year, a lot of property owners in Adelaide especially experience seasonal cracking in their buildings due to constant changes in weather. These buildings including Strata and Community Title properties will shrink or expand as the temperature increases or decreases because moisture or humidity keeps on changing throughout the year. As a result, some minor cracks may appear and can disappear as the temperature changes. Depending on the size and location of these cracks, however, dirt or moisture may get into these cracks. It may not be viable to continuously patch these aesthetic cracks.

• Due To Chemical Reactions
• Due To Moisture Present In The Homes.

How Everyone Is Affected By It?

Major cracks can cause immense problems to the people living in these buildings if not looked after properly. They can make the building structure weak or unsafe for the people living there. Also, if this issue is not resolved in due time, serious damages can result in owners of these buildings facing large financial losses.

What Needs To Be Done?

Although it might scare you to find a crack in your house or building, you do not need to worry about it in most cases. If you feel that this might risk your Strata or Community Titled unit or building then you should raise this with your Strata Manager of Management Committee.

If the damage is severe, there may be a need to engage either an Engineer or Plumber to determine if there is an underlying cause to the cracks that require structural repairs or repairs to prevent further cracking, such as repairing a cracked or broken pipe.

Minor aesthetic internal cracks are the responsibility of the Unit Owner and you may choose to patch these cracks for aesthetic reasons

It’s Your Community.

Linked video – Tony Johnson from STRATARAMA chats to James Cibich from IMPARTA ENGINEERING about cracking.

https://youtu.be/H2gd3dXGjKQ

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Insurance Valuation Reports for Strata Corporations

Stratarama Insurance Valuation Reports for Strata Corporations

Owning a strata property comes with certain responsibilities. There is a requirement upon all Strata Corporations that the property is collectively insured for full replacement value at all times. This is a legislated requirement simply to protect each Member of the Strata Corporation, ensuring that the whole site is insured. This is in reference to Section 30. It is clear that the responsibility is on the Corporation to insure for the correct replacement value of the entire complex, and include all costs which the group may experience in a total loss, for example; surveying, architectural, engineering works or associated and incidental costs. This is very important because, in a total loss, you may find that there are significant costs associated with ensuring that the replacement buildings and structures meet the current building code requirements.

What is the full replacement value insuring?

We talked above about some of the factors which go into determining full replacement value but what are you insuring against? The Strata is insuring against the worst-case scenario, which would be the total loss or destruction of the strata property caused by any number of factors, including but not limited to fire, flood or a natural disaster.

Division 4—Duty to insure

30—Duty to insure

(1) A strata corporation must keep all buildings and building improvements on the site insured to their replacement value.

(2) The replacement value of buildings and building improvements is the cost of their complete replacement including the cost of any necessary preliminary demolition work, any necessary surveying, architectural or engineering work and any other associated or incidental costs.

(3) The insurance must be against—

(a) risks of damage caused by events (other than subsidence) declared to be prescribed events in relation to home building insurance under Part 5 of the Insurance Contracts Act 1984 of the Commonwealth; and

(b) risks against which insurance is required by the regulations.

(4) Any money to which a strata corporation is entitled under a contract of insurance in relation to damage to buildings or building improvements must, subject to any contrary order of the Court, be applied by it in reinstating or repairing those buildings or building improvements.

What is valuation?

Insurance valuation is a report which is carried out by a professional insurance Valuer who is qualified and experienced to review the Strata Corporations body corporate site and determine what the required full replacement value is, taking into account all the various works and incidental costs we mentioned above. These reports are important and when carried out periodically can assist the group in determining the level of insurance a Strata Corporation may require. Members of a Corporation are required annually to consider their insurance needs and determine the level of cover required, but being unqualified to make such an assessment could be detrimental to the group. A valuation undertaken periodically gives the group a solid base from which they can make these determinations.

The valuer will look at the improved valuer of the property and include other factors such as inflation, professional fees, cost escalations, compliance with regulations of building development at current standards, demolition, cost of external items (pavements, fencings, recreation facilities which are on-site) and lastly, the removal of debris. Once they have calculated these items, they will land at a suggested insurance value.

It is important to note that the valuation does have no basis or bearing in relation to the current market value of the property or its existing condition either. The job of an insurance valuer is to value the cost of replacing the building with a new (assuming worst-case scenario that the property must be replaced). The cost to buy or sell your Strata unit or lot is not the value for insurance purposes.

The insurance valuer must apply their industry knowledge which he/she possesses and incorporate the various construction cost guidelines into it.

Why is a Valuation Important?

Insurance valuations ideally occur on a recurring and periodical basis to make sure that your property is insured from any unforeseen circumstances.

An insurance valuation is a prudent risk management strategy as it provides for an expert to determine the level of cover required to hopefully ensure the group is insured adequately, thereby removing the additional risk of being underinsured in a total loss.

If a Strata Corporation is under-insured with insufficient value to cover the total loss of the property, then the Members of the group could find themselves needing to bear the liability and costs associated with any rebuild.

An insurance revaluation is highly important to keep your property insured from any circumstances that can occur out of the blue. The value of the insurance required tends to increase with time, as you put different materials, construction costs and professional fees increase each year, these factors must be altered in your coverage to reflect the changes and ensure the group remains adequately covered.

Below is a youtube video which was a chat between our Strata Manager Tony Johnson and one insurance Valuer.

Further below is a link to a document created by SCI insurance which details some of the risks and concerns with underinsurance and the need for valuations.

SCI LINK : https://stratacommunityinsure.com.au/wp-content/uploads/2017/10/SCI-018_Valuations-Underinsurance_05_WEB.pdf

Startarama Youtube: https://www.youtube.com/watch?v=npYdKNxtUOI

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