Insurance is often considered a grudge purchase. That is, until it is time to lodge a claim. The same can be said of a legally prescribed valuation for sectional title schemes. Bodies corporate only appreciate its value when their claim is paid out in full without any insurer dispute. In addition, a building valuation is expected to be prudently done but low-priced.
The new property levy will be determined based on the market value allocated to your property in a mass appraisal procedure. The mass appraisal techniques used by the General Valuation Roll leave ample room for error. All ratepayers will be afforded the opportunity to view the valuation roll and object to the municipal valuation if they do not agree with the assigned value.
It is important to remember is that the true intention of the STSM Act is to remedy many of the shortcomings that may currently be the cause of sectional title owners losing value in their property investments.
Here is what the Sectional Title Schemes Management Act (STSM) No. 8 of 2011 says about insurance and – more specifically – what a sectional title valuation ideally should entail.
When an insurance policy is due for renewal, many financial advisors will recommend a fixed annual escalation rate of 10%, sometimes even 15%. Does this reflect reality? What if the original sum insured was incorrect to begin with?