After a lightning strike, the entry phone and the lift controls burn out, and the first thing the insurer asks for is the lightning protection inspection report – which was drawn up eight years ago. Or: the lift breaks down, and the loss adjuster asks for the maintenance log and the latest inspection report, and the latter is missing. As a broker, my experience is that in a significant proportion of buildings the mandatory inspection reports are “somewhere”, but not up to date – and this comes to light precisely at a large loss. This article shows which inspections the law requires, what the policy conditions say about them, and when their absence can genuinely be grounds for rejection.
- Hungarian condominium policy conditions typically exclude loss that is causally connected with failure to carry out maintenance and operational safety checks required by the authorities, or with breach of operating rules – the key term is the causal link.
- The inspections are required by law: lightning protection (OTSZ), electrical safety inspection (VMBSZ), chimney sweeping (Act CCXI of 2015), lifts (Government Decree 146/2014.) – the reports form part of the building's records.
- An expired report does not in itself mean that the insurer will not pay: for an exclusion, the link between the loss and the failure is what counts, and for exemption the insurer must prove gross negligence – but the evidential position may turn against the building.
Which inspections does the law require for a residential building?
Four areas come up in condominium claims. The periodic inspection of the lightning protection system is required by the National Fire Safety Code (OTSZ, Ministry of the Interior Decree 54/2014. (XII. 5.) BM); the frequency depends on the type and level of protection, and for residential buildings it is typically a three- or six-year cycle. The periodic electrical safety inspection of electrical installations – commonly known as the shock-protection (érintésvédelmi) inspection – is governed by the Electrical Technical Safety Code (VMBSZ, NGM Decree 40/2017. (XII. 4.)), typically with a six-year cycle for the common network of residential buildings. Under Section 5(2) of Act CCXI of 2015 on chimney-sweeping activities, the user of the property must allow the chimney-sweeping inspection and remedy any irregularity found; where there is a danger to life or of fire, under Section 3(2) the chimney sweep calls for use of the heating appliance to be suspended without delay and notifies the authority. For lifts, under Government Decree 146/2014. (V. 5.), the operator ensures regular maintenance and has the periodic inspection of the installation carried out by a registered organisation – annually or every six months, depending on the age of the installation. The exact cycles are in every case set by the relevant legislation and the inspecting professional; questions about lifts are discussed in the article on lifts and building services.
What do the conditions say?
Hungarian condominium policy conditions work with two types of provision. One is the exclusion: one large insurer's condominium conditions do not pay for loss arising from failure to carry out maintenance and operational safety checks required by the authorities, and for lifts they ask for the maintenance log and the machine logbook to be presented; another wording excludes loss that is causally connected with failure to observe the construction and operating rules for the building and its fixtures. The other type is the loss-prevention requirement: the policyholder must keep electrical, water and gas pipes and equipment in proper working order, ensure their maintenance and maintain safety equipment – breaching this opens the door to exemption of the insurer. For the secondary effects of lightning – overvoltage damage – the conditions typically do not make cover dependent on the existence of a lightning protection system, but the insurer may ask for the lightning protection report during claims settlement. This varies by insurer, so it is worth going through the exclusions in your own policy item by item.
Exclusion or exemption – and why does the causal link matter?
An exclusion means that the loss is not an insured event; the insurer does not have to prove negligence, but the wording of the exclusion typically requires a causal link: loss arising from failure to carry out the check, loss connected with a breach of an operating rule. If the lightning protection was physically in order and only the report had expired, and the loss results from a direct strike above the roof, the absence of a causal link is a strong argument; if, however, the down conductors had been broken for years and a timely inspection would have revealed this, the causal link counts against the building. The same applies to lifts: if the loss results from neglected maintenance of the rope or the brake, the exclusion is likely to apply; if water from a burst pipe flowed into the shaft, the overdue inspection is not a reason.
For exemption, Section 6:464 of the Hungarian Civil Code (Ptk.) applies: the insurer is released from paying if it proves that the loss was caused by intentional or grossly negligent conduct – under paragraph (2), this also applies to a breach of the loss-prevention obligation. According to decision no. Jpe.I.60.003/2023/16 of the Curia (Kúria, Hungary's supreme court), which has binding legal-uniformity effect, the gross negligence must relate not to the underlying breach of a rule but to the occurrence of the loss: breaching a requirement does not in itself justify exemption of the insurer, and the insurer must prove further facts. So an expired report does not mean automatic rejection – but a defect that has been known and documented for years and still neglected may come close to what a court regards as gross negligence. The standard of the conduct that can be expected is set by Section 6:463 of the Civil Code.
Why is it not only an insurance question?
Failing to carry out inspections also has consequences independent of insurance: a fire safety fine, an official ban on operating the lift, and for chimneys the suspension of use without delay. And there is the building's liability: if a resident or an outsider suffers damage because of the failure, the building is liable, and the conditions of building liability insurance may also contain an exclusion or a ground for exemption relating to breach of operating rules. Under Section 43(1) of the Condominium Act (Tht.), the common representative (the building's elected manager) must take all necessary measures for the maintenance of the building – ordering the inspections is part of the representative's administrative duties, while voting the money for them is a matter for the general meeting; if this does not happen, the liability of both the representative and the building may arise.
For lightning and overvoltage damage, the joint recommendation of the Hungarian Electrotechnical Association (MEE) and MABISZ (the Hungarian insurers' association) advises installing surge protection devices in the consumer main distribution board and the telecommunications connection; this is not a legal obligation, but it significantly improves the protection of the entry phone, the lift controls and the boiler electronics – and it also counts in the building's favour at the next request for quotes.
What the building should do: the inspection report calendar
- List on one sheet: lightning protection, electrical safety, chimney and lift reports – date of the last inspection, expiry, defects found, and proof that they have been remedied.
- Do not just have the defects found repaired, but document the repairs: invoice, work sheet, a renewed statement from the inspector.
- The answers about inspections in the questionnaire for a request for quotes must be true: the disclosure obligation under Section 6:452 of the Civil Code extends to this as well.
- The reports should go into the building's insurance file, and the expiry dates into the loss-prevention checklist.
When quotes are requested, insurers ask about the inspections; and after a loss, these reports are typically the first documents they request. If a rejection refers to an expired inspection report, I help the building check whether the conditions state an exclusion or an exemption, and whether there is a causal link – the decision is made by the insurer and, in a dispute, by the court.
A question tailored to your own building's inspections or claim? Book a free 20-minute consultation →
Sources
- OTSZ – Ministry of the Interior (BM) Decree 54/2014. (XII. 5.) on the National Fire Safety Code – National Legislation Database (Nemzeti Jogszabálytár)
- VMBSZ – NGM Decree 40/2017. (XII. 4.) (Electrical Technical Safety Code) – Jogtár
- Act CCXI of 2015 on chimney-sweeping activities – National Legislation Database (Nemzeti Jogszabálytár)
- Government Decree 146/2014. (V. 5.) on lifts, escalators and moving walkways – National Legislation Database (Nemzeti Jogszabálytár)
- Hungarian Civil Code (Ptk., Act V of 2013) – National Legislation Database (Nemzeti Jogszabálytár)
- Curia (Kúria) decision no. Jpe.I.60.003/2023/16 with binding legal-uniformity effect (exemption of the insurer, gross negligence)
- Generali Házőrző policy conditions for multi-unit residential buildings (Nysz. 23521, 2022)
- Colonnade ATLASZ Társasház Biztosítás (condominium insurance) – policy conditions and customer information (2023)
- MEE–MABISZ recommendation on preventing and reducing lightning and overvoltage damage (2015)
- Condominium Act (Tht., Act CXXXIII of 2003 on condominiums) – National Legislation Database (Nemzeti Jogszabálytár)
