Launch of Stilus (insurance for the sectional title industry)
Reaction to the initial announcement that Stilus, a newly launched Santam backed insurance policy especially designed for the sectional title industry, has been better than anticipated, says Charles Coetzee, the executive director of Stilus Underwriting Managers.
Over 150 insurance brokers and managing agents attended the Stilus Launch on 10 August in Gauteng. A similar promotion will now be staged for brokers, managing agents and trustees in the Western Cape on 28 August at the Crystal Towers Hotel, Century City. (Details are available from Vicky@stilus.co.za or telephone 021 914 9002.)
Stilus (an acronym for Sectional Title Insurance Levy Underwriting Security), undertakes to pay bodies corporate the levies of defaulting members thereby guaranteeing their monthly cash flow. The responsibility of collecting the arrear levies is borne by Stilus and the individual defaulting members are obliged by Stilus to bear the costs of collection, not the bodies corporate.
The blight of illiquidity which has been the curse of bodies corporate over past decades should now become history, said Coetzee.
Coetzee comments: A major surprise to delegates at the launch was how inexpensive Stilus was relative to the major benefits which accrue to the Body Corporate. For medium priced sections each member of a body corporate would have to pay a mere R10 per month for Stilus cover less than the price of a cappuccino.
At the Cape Town launch Cornell Wagenaar, of the National Association of Managing Agents will talk on current matters of interest to NAMA members and the benefits, as he sees them, of Stilus. Tertius Maree, a much quoted spokesman for the Sectional Title Industry and Stilus supervising attorney, will also address the seminar.
Until now, said Coetzee, bodies corporate often waited until they got into major financial difficulties before taking legal action against their defaulting members or endeavouring to borrow money. Because bodies corporate do not own assets which can be pledged as security, raising a loan can be difficult. Bodies corporate which insure with Stilus will pre-empt the possibility of getting into a financial crisis because their levies will be fully funded on a monthly basis.
There are, said Coetzee, some 60 000 sectional title schemes in SA comprising over 800 000 units which accommodate approximately 3,5 million people. The schemes play a vital role in the real estate industry and act as a store of value for thousands of investors, who purchase units either for their own use or to lease to tenants. It is crucial that sectional title properties be prevented from deterioration through lack of funding and ultimately lose their inherent value. By maintaining their properties to acceptable standards members of bodies corporate can have complete peace of mind and ensure that their schemes values appreciate.
Although Stilus is underwritten by Santam, it is a standalone policy and can be purchased by any body corporate, regardless of which insurer covers the property.
The favourable response, said Coetzee, has led us to be confident that we can capture 5% of the sectional title market within 12 months but in the longer term there is no reason at all why we should not eventually be serving over half of South Africas sectional title units because bodies corporate have for years been looking for a solution of this kind.
Coetzee commented that it is appropriate that Stilus is entering the market at the same time as the Lead SA campaign, which aims to keep alive the positive attitude engendered by World Cup.
Stilus, said Coetzee, is a very positive step forward for the entire sectional title sector from which all its participants bodies corporate, their trustees and members, insurance brokers, managing agents, mortgagees and tenants will benefit.
As sectional title is the fastest growing sector in property, it was essential that some means be found of stabilising its financial position and this Stilus will do.
For further information contact Michael Garvin at Stilus marketing department on 021 914 9002 or 083 345 6342.
Article by: www.santam.co.za