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  • Writer's pictureShaun Pascoe

Criminal Offences in Strata Insurance Compliance in Victoria

Strata insurance serves as a vital safeguard for property owners and residents in shared spaces, providing protection against unforeseen risks and liabilities.  

However, in Victoria, Australia, failure to adhere to strata insurance regulations can result in criminal offences with significant legal consequences.  

This article explores the criminal offences associated with strata insurance in Victoria, shedding light on the implications and preventive measures necessary to maintain compliance and integrity within the property sector. 


Table of Contents


Understanding Strata Insurance 

Strata insurance is a specialised form of insurance designed for properties with shared spaces, such as apartment buildings, townhouses, and condominiums.  

Its primary purpose is to cover common areas, structural components, and liabilities shared by multiple property owners.  

Key components typically covered include building infrastructure, liability insurance, and public liability. 


Criminal Offences Pertaining to Strata Insurance in Victoria 


Failure to Obtain Adequate Strata Insurance 

Property owners are legally obligated to obtain adequate strata insurance to protect against potential risks and liabilities.  


Failure to do so can lead to serious legal consequences, including fines and penalties imposed by regulatory authorities.  


The legal requirement for strata insurance is outlined in the Strata Titles Act 2018 (Vic) and the Owners Corporation Act 2006 (Vic).  

Misuse of Strata Insurance Funds 

Misappropriation of strata insurance funds constitutes a criminal offence in Victoria.  

This includes instances where individuals or corporations misuse funds designated for insurance premiums or claims settlements for personal gain or unauthorised purposes.  

Such actions undermine the financial stability and trust within the strata community, leading to legal repercussions and civil liabilities.  

Fraudulent Claims 

Engaging in fraudulent activities related to strata insurance, such as filing false or exaggerated claims, is strictly prohibited under Victoria's laws. 


Fraudulent claims in strata insurance encompass various deceptive practices, including but not limited to: 

  • Falsification of Damage: This involves exaggerating the extent of damage to common property or making false claims about non-existent damages. 

  • Inflated Valuations: Submitting claims with inflated valuations for repairs or replacements, aiming to receive higher compensation than justified. 

  • Concealment of Information: Withholding crucial information relevant to the claim or providing false information to bolster the claim's legitimacy. 

  • Collusion: Collaborating with contractors or service providers to inflate invoices or create fictitious repair costs. 

Legal Consequences 

Engaging in fraudulent activities related to strata insurance can lead to severe legal repercussions under Victorian law, including: 

  • Criminal Charges: Individuals found guilty of filing fraudulent claims may face criminal charges under the Crimes Act 1958 (Vic) or other relevant legislation, leading to fines, imprisonment, or both. 

  • Civil Penalties: Apart from criminal charges, perpetrators of insurance fraud may also be subject to civil penalties, including restitution payments and damages awarded to affected parties. 

  • Loss of Insurance Coverage: Insurance policies often contain clauses that void coverage in case of fraudulent claims. Therefore, individuals found guilty of insurance fraud risk losing coverage for future claims, exposing themselves and other strata members to significant financial risks. 



Measures for Compliance and Prevention 

To mitigate the risk of criminal offences in strata insurance, stakeholders must prioritize compliance and implement preventive measures, including: 

  • Regular review and update of insurance policies to ensure adequate coverage. 

  • Transparent financial management and accountability to prevent misuse of funds. 

  • Implementation of fraud detection mechanisms and reporting procedures. 

  • Education and training for property owners, managers, and residents on their obligations and rights concerning strata insurance. 


Regulatory Framework and Enforcement 

Regulatory bodies in Victoria, such as the Victorian Civil and Administrative Tribunal (VCAT) and Consumer Affairs Victoria, play a crucial role in enforcing strata insurance regulations and addressing non-compliance issues.  

Facing Criminal Offences in Strata Insurance Compliance?  

Seek expert legal guidance from Pascoe Criminal Law. Get a case assessment from our criminal lawyers who provide tailored representation for cases involving failure to obtain adequate insurance, misuse of funds, or fraudulent claims. Protect your interests and reputation. 


Call us for urgent expert advice (03) 9668 7600

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