Are you aware that body corporate trustees can be held personally liable for the shortfall in insurance in the case of underinsurance, as a result of an erroneous valuation? But how can this occur if the body corporate has trustee liability cover in place?
As a business that is always looking to learn more about the sectional title industry and how to serve it better, Mirfin conducted a client survey with the objective of gaining a more thorough understanding of the needs and preferences of industry decision-makers and, more specifically, to understand what managing agents expect from service providers in terms of service delivery in 2021.
The cost of maintenance for a sectional title scheme is commonly determined by its size, the current state of repair and the extent of maintenance required. To gauge these costs, the body corporate needs to obtain quotes from the relevant contractors.
Did you know that many bodies corporate lose money on insurance premiums by skimping on the valuation? In some cases, the reason might be that the body corporate has not met its obligation to obtain the mandatory 3-yearly replacement cost valuation – this usually leads to over-escalating the sum insured by applying the same “on-the-safe-side” escalation rate of 10% year after year.
It has become the norm to increase insurance cover for community schemes by 10%, or even 15%, per year. On the other hand, some bodies corporate choose not to increase cover at all. However, how often do bodies corporate consider decreasing cover?