When people ask me about a building's insurance, my first request is for the founding documents. Not out of legalism – but because every cornerstone of a condominium's insurance affairs is decided by two documents: the deed of foundation and the organisational and operational rules (SZMSZ). This article shows what to look for in them with an insurance eye.
- The deed of foundation sets the boundary between common and private property – that is, what the building's insurance can apply to.
- The SZMSZ provides the operating framework: who may decide on insurance and with what mandate, and it may also require that insurance be maintained.
- Above any general rule, the particular building's own documents prevail – where there is doubt, involving a lawyer is warranted.
The deed of foundation: the “what for” question
The deed of foundation is the condominium's birth certificate: it designates which parts pass into private property and what remains common. From an insurance point of view this is the fundamental question, because the building's policy is built on the common property – on the detail of the boundary, see the separate article. So before requesting quotes it is worth digging out the relevant parts of the deed: without it, the cover can only fit the building “in general”, not precisely.
The SZMSZ: the “who and how” question
The house rules are the building's operating manual: powers, decision-making rules, the manager's rights and duties. With an insurance eye, three things are worth looking for in them. First: who may decide on taking out or switching the insurance – the general meeting, or has the manager been given a mandate within certain limits? Second: is there a requirement to maintain insurance – in many buildings the house rules deal with this expressly. Third: how a decision may be reached – for example, is a written vote possible if the renewal date does not fall in the general meeting season?
What does this mean in practice?
Three typical situations are worth thinking through. If the SZMSZ requires insurance, the question is not “should we have it” but “what should it look like” – what goes to the general meeting is a proposal about the content. If the manager has a mandate, tendering can be faster – but transparency is good practice even then: the residents should receive a summary of the decision and of the reasons behind it. And if every decision falls to the general meeting, timing is the key question: the tendering is best scheduled so that the result is ready for a decision by general meeting season – typically in the spring. The article on preparing for the general meeting helps with this.
An honest note on the limits
As a broker I bring the insurance side: what is worth covering, how to run the tendering, what to watch for in the policy terms. Interpreting the deed of foundation and the house rules is a legal question – I can give general information about it, but in a particular building's particular disputes a lawyer is the right partner. The two work well together: clear legal frameworks, and insurance tailored to them. For going through the documents there is a ready-made list: the SZMSZ checklist.
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