EQC provides insurance to cover for loss or damage from the following natural disasters;
* natural landslip
* volcanic eruption
* hydrothermal activity
By Nikki MacDonald
"...The case [of Marion Square's 40 apartments owing $2,300,000 in insurance] centres on the way EQC calculates the make-up of a mixed-use building. If more than 50 per cent is deemed residential, EQC covers damage in the whole building. If less than 50 per cent is residential, only the residential areas are covered.'
...However, former Body Corporate Chairs' Group president Neil Cooper said the idea the residential component did not include car parks and shared areas was 'totally foreign'. The new interpretation was 'potentially devastating', as most apartment buildings included shops or commercial car parks.
'If they're deciding to say we only count the space within apartments - no corridors or anything, no parking spaces even - that's a nonsense.'
The Body Corporate Chairs' Group has 40 mixed use buildings on its database, but there was no knowing how many were close to the 50 per cent threshold and could therefore be reclassified.
Director of Meridian General Brokers, Bernie Kane, said the entire industry had been operating on the basis the residential component of a building included all residential space, not just individual apartments. EQC's change in interpretation had denied Marion Square residents the opportunity to pay to reduce their excess and was making his job impossible, he said.
'They're the ones charged with interpreting the Act, so how can they say they got it wrong?...We are charged with calculating and collecting levies and giving advice to our clients. How can we do that when EQC are changing the rules as they go along?'
EQC chief executive Sid Miller said EQC's interpretation had not changed and the 2013 claim payout was simply a mistake: 'This was not a case of misinterpreting the EQC Act; it was a human error on that particular claim.'
EQC could not say if any other buildings had been reclassified, or if any other residents had challenged that classification.
Marion Square body corporate chairwoman Rachel Valentine said EQC could not just call it an error and apologise.
'That sorry has cost us $2.3m. So that's not kind of good enough.'"