(1) An owners corporation must take out reinstatement and replacement insurance for all buildings on the common property in accordance with this Division.
(2) The insurance required under subsection (1) is insurance for damage to property under which the owners corporation insures for—
(a) the cost necessary to replace, repair or rebuild the property to a condition substantially the same, but not better or more extensive than its condition when new; and
(b) the payment of expenses necessarily and reasonably incurred in the removal of debris and the remuneration of architects and other persons whose services are necessary, being incidental to the replacement, repair or rebuilding of the damaged property.
S. 59(2A) inserted by No. 1/2010 s. 25.
(2A) The insurance required under subsection (1) includes reinstatement and replacement insurance for the owners corporation’s portion of any shared services.
(3) The owners corporation must ensure that the insurance required under subsection (1) includes—
(a) a provision that the interests of mortgagees are noted; and
(b) a provision that a mortgagee whose interest is noted shall be given the notices that are required under section 59 of the Insurance Contracts Act 1984 of the Commonwealth at the same time that those notices are given to the insured; and
(c) a provision that the insurer cannot avoid the whole contract for breach of a condition of the contract unless the breach is by the owners corporation or all lot owners, but the insurer has a right of indemnity against those lot owners who breach the contract.