Before I answer the question I must point out that the insurance of the buildings comprising a sectional scheme is one of the Trustees most important obligations in terms of legislation.
IN FACT, THE MANAGEMENT RULES STATE THAT THE TRUSTEES MUST INSURE THE BUILDINGS IN THE SCHEME TO THEIR FULL REPLACEMENT VALUE.
Can you imagine if the building burns down and it isn’t insured or not properly insured!!!!!! It would be a disaster of catastrophic proportions.
Mike Addison of Addsure, Specialist Sectional Title Insurers, advises Trustees and/or managing agents to obtain the present sum insured from and find out how and when this was determined.
If the building has not been valued by a certified professional valuer or Quantity Surveyor for more than three years make it an absolute priority to have the buildings valued and the insurance adjusted.
The first question I have been asked to answer is:
– “My unit should be insured at a much higher value than the Body Corporate has insured it for, what do I do?”
Yes Mr Pretorius you most certainly can have your unit insured for a ‘much’ higher value to cover your marble bathrooms with imported fittings.
What steps must you follow?
You simply call your Managing Agent and ask her to notify the Body Corporate Insurance Broker or the Insurer to increase the insured value of your unit. Alternatively you can contact the Broker or Insurer directly.
Just remember that you will be responsible for paying the extra monthly or annual insurance premium, which usually doesn’t work out to too much.
– “ I represent a Developer who intends to develop a scheme that incorporates offices, shops and residential units – what will the insurance implications be for the Body Corporate?”
Using a combination of lateral thinking, clever interpretation and skilled manipulation, the Sectional Titles Act, Management and Conduct Rules can be used to govern any manner of scheme.
As you can imagine the insurance needs of a sectional title office park or residential scheme are vastly different from the insurance needs of a game farm set up as a sectional title scheme, which incorporates a hotel with squash courts, 2 tennis courts and an Olympic size swimming pool, which are all shown on the sectional plan as common property.
As a legal person the Body Corporate can procure the insurance of any item that needs to be insured.
In fact Management Rule 29 (3) specifically says that the members of the Body Corporate can direct the Trustees to insure against any other risk as the members by special resolution may determine.
I would go so far as to say that it is the Trustees’ fiduciary responsibility to ensure that “other” necessary insurances are procured immediately they become necessary.
I’m sure you agree that for once there are no “if’s-ands-or-buts” to the above answers.
Where legal matters are concerned that’s very refreshing!
SEND YOUR QUESTIONS TO . . . kbleijs@ibalaw.co.za
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