137 Further provisions relating to insurance

(1)

Nothing in section 84, 134, or 136 limits the right—

(a)

of a unit owner to take out an insurance policy against destruction of or damage to the unit owner’s unit:

(b)

of a mortgagee of a unit to require the unit owner, as a condition of the loan, to effect a policy of insurance (a mortgage redemption policy) to indemnify the unit owner against liability to repay the whole or any part of the sum secured to the mortgagee in the event of the destruction or damage of the unit.

(2)

Despite section 135(1),—

(a)

if the principal and accessory units in the unit plan are stand-alone units, a body corporate may, by special resolution at a general meeting, require each unit owner to insure all the improvements within the boundaries of his or her unit (the body corporate remaining responsible for insuring all improvements within the common property boundaries):

(b)

indemnity cover is permitted if full replacement cover is not available in the market.

(3)

A payment made under a mortgage redemption policy by the insurer must be made to the mortgagees whose interests are noted on the policy in the order of the priority assigned to each mortgagee.

(4)

No mortgage redemption policy is liable to be brought into contribution with any other insurance policy except another mortgage redemption policy taken out in respect of the same debt.

(5)

This section applies despite any rule of law to the contrary.

Compare: 1972 No 15 s 39