Insurance and Liability in the AS 1851-2012 Era

The Personal Sting of the Strata Act

In NSW, the Strata Schemes Management Act 2015 (Section 106) is clear: The Owners Corporation has a strict duty to maintain and repair common property. Under the 2026 fire reforms, “maintaining” now explicitly means “complying with AS 1851-2012.”

When “Duty of Care” Becomes “Personal Liability”

Normally, committee members are protected if they act in good faith. But here is the loophole lawyers love: “Willful Negligence.” If a Strata Committee receives a technician’s report stating the fire pump has failed, and they vote to delay repairs to “save money for the garden upgrade,” they are no longer acting in good faith. They are knowingly endangering lives. If a fire occurs, that corporate veil can be pierced.

The “Denial of Claim” Pathway

Insurers are businesses, not charities. Here is how a claim gets denied in 2026:

1. Incident: A car park fire destroys 3 vehicles and damages the concrete slab.

2. Investigation: The insurer asks for the last 7 years of AS 1851-2012 records (as required by the new Regulation).

3. Discovery: They find the 5-yearly “overhaul” of the sprinkler valves was skipped to save $2,000.

4. Result: The $2.5M claim is denied based on “non-disclosure of risk” and “failure to maintain.”

Protecting Your Site and Your Wallet

Compliance isn’t a cost; it’s an insurance premium. By securing a valid AFSS through a rigorous 2012-standard process, you create a “Compliance Shield” that protects:

• Occupant Lives: The systems actually work.

• Property Value: High-compliance buildings have lower insurance premiums.

• Personal Assets: Committee members can prove they acted with “due diligence.”

Mental Check: The “Minutes” Test

Check your last strata meeting minutes. If there is a line that says “Motion to defer fire repairs”—DELETE IT (metaphorically) by fixing the issue immediately. That line is evidence against you.

References

• Strata Schemes Management Act 2015 (NSW) – Section 106.

• Insurance Contracts Act 1984 (Cth) – Duty of Disclosure.

Next Step: Secure your site’s compliance certificate and your peace of mind. Contact CPFP today to finalise your 2026 compliance strategy.

References Section (For the Series)

• Legislation: Environmental Planning and Assessment (Development Certification and Fire Safety) Regulation 2021.

• Standards: AS 1851-2012 Routine service of fire protection systems and equipment.

• Standards: AS 2293.2 Emergency escape lighting and exit signs.

• Standards: AS 2941-2013 Fixed fire protection installations — Pumpset systems.

• Industry Report: NSW Building Commission: Research on serious building defects in NSW strata communities (2023).

• Liability: Strata Schemes Management Act 2015 (NSW).