When it comes to Strata properties, we have often found that confusion surrounds Certificates of Currency (CoC), particularly when people need to request one for a property they are about to purchase, or when property owners are refinancing their home loans.
Resolute’s Director, Lia de Sousa, answers the top 7 questions we receive on CoCs, helping you explain to your clients the importance of this document.
1. What is a Certificate of Currency?
In the context of a Strata Insurance policy, a Certificate of Currency (CoC) is a document which confirms that the insurance policy for the property is current and valid for the date on which the certificate is issued.
2. Who can I obtain a Certificate of Currency from?
Property owners can obtain a certificate directly from an insurer, or we can arrange this for them on your behalf.
3. Why do your clients need a Certificate of Currency for a Strata property?
There are a number of reasons why Strata property owners may need to obtain a Certificate of Currency, but it is generally because a third party (e.g. financial institutions) have requested the certificate in order to obtain proof that the property is insured.
Circumstances where your clients may need to request a Certificate of Currency are as follows:
- Their mortgagee e.g. bank or financier has requested it prior to the purchase of their unit
- They may want to keep one for their records
- When they’re applying for other insurance policies, such as Landlords or Contents Insurance
- Before selling their property, they may have to provide a certificate.
4. What is the difference between a ‘generic’ and ‘noted’ Certificate of Currency?
There are two types of Certificates that may be required: a noted Certificate of Currency or a generic Certificate of Currency. What your clients need will depend on their circumstances.
Please note: issuing a noted Certificate of Currency will incur a nominal cost.
5. Why do Banks, Solicitors or Conveyancers need a Certificate of Currency when a property is purchased?
When individuals are purchasing a unit in a Strata property and applying for finance, their financial institution is in essence the ‘interested party’ for the unit, as the financial institution are investing their money in the property. The Certificate of Currency is required as part of the settlement process, to ensure that the unit is part of a property which is protected from a loss normally covered by insurance, e.g. fire.
Note: A financial institution will usually request a noted Certificate of Currency which lists them as the Mortgagee or Interested Party.
6. Why do my clients need to pay a fee for a noted Certificate of Currency?
When it comes to requesting a noted Certificate of Currency, insurers and brokers may charge a nominal fee for noting unit details in the certificate, as it has to be produced manually. A noted Certificate of Currency will contain details specific to your client’s situation, and the unit that they are purchasing. The fee covers the costs associated with preparing the certificate to include the unique details required for their particular situation.
7. How quickly can a Certificate of Currency be obtained?
We recommend that a Certificate of Currency be requested from our office as soon as your property owners become aware it is required. Different insurance companies have different requirements, therefore leaving this important piece of documentation to the last minute is not recommended, as it could delay your property owner’s settlement.
If you would like further information on obtaining a Certificate of Currency for a Strata property, please contact your Resolute Account Executive on 1300 668 033.
This insight article is not intended to be personal advice and you should not rely on it as a substitute for any form of personal advice. Please contact Resolute Property Protect ABN 53 157 850 827 Licence Number: 425 966 for further information or refer to our website.