Understanding Sectional Title Insurance for Owners
Essential Information on Sectional Title Insurance for Owners
Introduction
At Solver Property Services, we specialise in managing community schemes for Body Corporates and Homeowners Associations. This article details the insurance requirements for sectional title owners, focusing on insurance excess payments, additional insurance for owners, and geyser insurance responsibilities.
Overview
We aim to delve into the specific insurance duties of sectional title owners, including excess payments, supplementary insurance, and geyser maintenance responsibilities.
Insurance Excess Payments
PMR 23(2)(b) states that owners must pay any excess related to damage they are responsible for repairing or maintaining under the Act or rules. Owners are required to provide written proof of excess payment to the body corporate within seven days of a request. This means owners must cover the excess for claims associated with their section and any exclusive use areas they maintain.
Additional Sectional Title Insurance for Owners
Section 14(1) of the STSM Act permits owners to obtain insurance for risks not covered by the body corporate’s policy. For example, if an owner expands their section or renovates their unit, they may need to insure additions such as granite tops, fancy kitchens, or extra doors and windows.
Section 14(2) clarifies that owners can insure against other risks beyond damage to their section, such as public liability. This is particularly relevant for sections used for commercial purposes, like restaurants, where there may be increased risks to staff and patrons.
Under Section 16(4) of the ST Act, any insurance on a section automatically includes the owner’s undivided share in the common property, even if not explicitly mentioned.
Geyser Insurance Responsibilities
Water heating installations, like geysers, require ongoing maintenance, repairs, and sometimes replacement. In sectional title schemes, a burst geyser can cause significant damage to the section, adjacent sections, and common property due to their proximity.
Regulation 3(e) under the STSM Act lists risks a body corporate may insure against, including “water escape, including bursting or overflowing of water tanks, apparatus, or pipes.” Ideally, bodies corporate should insure all geysers in the scheme.
PMR 31 outlines the responsibility for geysers:
Even if a geyser is part of the common property and insured by the body corporate, the owner must maintain, repair, and replace it when necessary if it serves their section or exclusive use area.
If the geyser serves multiple sections or exclusive use areas, the costs must be shared pro-rata among the benefiting owners.
Owners must handle the maintenance, repair, and replacement of geysers, even if they are located on common property, such as in roof spaces or outside sections. This is an exception to the body corporate’s duty to maintain common property per Section 3(1)(l) of the STSM Act.
While geysers are generally covered by the body corporate’s building insurance, and premiums are paid by the body corporate, owners using the geyser must pay the excess on any insurance claims.
Conclusion
Understanding the insurance responsibilities in sectional title schemes is crucial for all owners. At Solver Property Services, we ensure that our clients are well-informed and compliant with these requirements, promoting a smooth and well-managed community living experience. Whether it's handling insurance excess payments, obtaining additional coverage, or maintaining geysers, our goal is to support and guide you through every step.
We trust that this article has provided you with a better understanding of the Sectional Title Insurance for Owners.
For expert advice on all aspects of Complex living (Sectional Title and Homeowners Associations), contact Solver Property Services.
Disclaimer: Please note that the above article is for informational purposes only and is not intended to be comprehensive or to provide legal advice. Solver Property Services, its employees, and agents cannot be held liable for the accuracy or otherwise of the contents of this article, or for the consequences of any action taken or not taken by any person or organization based on the contents herein.
For more information, contact 010 822 2882. Solver Property Services has a team of experienced Property Managers/Managing Agents who can assist you. We manage over 200 complexes across South Africa and are considered Gauteng's preferred managing agents.
