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 a body corporate member suffers a financial loss due to an averaged or refuted claim as a result of under-insurance, the member is likely to seek alternative ways to recover the shortfall. Elected trustees have a fiduciary duty to ensure comprehensive insurance cover and the affected member may consider seeking legal recourse against the trustees.
“A body corporate must obtain a replacement valuation of all buildings and improvements that it must insure at least every three years and present such replacement valuation to the annual general meeting.” Who will enforce this rule and ensure that the body corporate has sufficient cover?