Is Your Scheme Properly Insured? Here’s Why a Valuation Every 3 Years Is Essential.
In South Africa, Sectional Title Schemes are legally required to conduct a valuation at least once every three years to ensure adequate insurance cover. But why is this so important?
- Prevents Underinsurance – Construction costs, inflation, and market fluctuations affect the replacement value of buildings. Without an updated valuation, your Scheme could be underinsured, leading to financial shortfalls if a claim arises.
- Legal Compliance – The Sectional Titles Schemes Management Act (STSM Act) No. 8 of 2011 requires Schemes to obtain a replacement cost valuation every three years. Failing to do so may put trustees at risk of non-compliance.
- Ensures Accurate Premiums – An up-to-date valuation ensures that insurance premiums are based on the correct replacement value, avoiding overpayment or shortfalls in cover.
Why it matters: Regular valuations safeguard your Scheme’s financial stability and protect owners from unexpected costs. When was your Scheme last valued? If it’s been more than three years, it’s time to review your cover!
It’s AGM season: Is your building’s replacement value updated?