16Common property of prescribed Class 2 building

16 Common property of prescribed Class 2 building A policy issued for guaranteed work in connection with a dwelling in a prescribed Class 2 building must provide that, in relation to defective guaranteed work carried out on the common property of the building: (a) a claim may be made on behalf of all the beneficiaries under policies issued for the dwellings (who are the current owners of the dwellings in the building); and (b) any payment made by the insurer to rectify the defective guaranteed work will reduce the entitlement to indemnity for financial loss in equal proportions for the dwellings. Example for regulation 16 If there are 10 dwellings in the prescribed Class 2 building and the rectification work amounts to $40 000, the entitlement under the policy in relation to each dwelling will be reduced by $4 000.