Launch of new insurance policy
New insurance policy can do away with unpaid levy problems
Santam has taken a major shareholding in a new company now launching a unique financial product tailor made to alleviate the serious liquidity problems experienced by South Africas bodies corporate in the sectional title property sector.
Stilus (an acronym for Sectional Title Levy Underwriting Security), the new service, undertakes to fund bodies corporate in which some members have fallen behind in their levy payments and to take full responsibility for collection of those arrears from the defaulters.
Charles Coetzee, who has many years experience in assisting sectional title schemes (he was founder of Propel Levy Finance, a leading player in this field), is the Managing Director of Stilus. He said recently,
Liquidity problems in the sectional title industry stem from bodies corporate being unable to obtain short term loans because they have no assets which financial institutions can use as security. When body corporate members omit to pay their levies on time, the bodies corporate find themselves in a situation where they cannot pay for municipal services such as water, refuse collection and sewerage disposal, nor can they maintain their properties as they should.
A sectional title complex that is unable to pay its way will rapidly lose value, to the detriment of all involved, including those members who have kept up to date with their levy payments.
Stilus will be marketed solely by insurance brokers and their target market will be South Africas 60 000 sectional title schemes, of which roughly 30% experience liquidity problems.
Stilus is a standalone insurance policy, which is available to all bodies corporate whether or not they are Santam clients.
To qualify as a Stilus client, said Coetzee, it is essential that the body corporates financial statements be brought up to date and that there is clear evidence of good governance.
From the time that a body corporate signs an insurance policy with Stilus, all the monthly levies payable by members will be guaranteed. Trustees and managing agents will be able to lodge claims in respect of defaulting members and receive payment within seven days of their claims being recognised. All the costs involved in the collection of arrear levies will be borne by the defaulters and not by the bodies corporate.
Since the inception of the Sectional Title Act, the collection of arrear levies, said Coetzee, has been an onerous and costly task for bodies corporate and their managing agents. The introduction of the Stilus service has the potential to make their lives easier and to relieve them of the serious financial difficulties with which many are not equipped to cope.
It is quite possible, said Coetzee, the Stilus policy will in the near future become mandatory for many bodies corporate.
Stilus is being launched at a morning seminar (8:30am to 12:15pm) on Tuesday 10th August, 2010. The venue is the Bytes Conference Centre, 241 Third Road, Midrand, Johannesburg. As seating is limited, Stilus would appreciate those wishing to attend to respond as fast as possible by email to email@example.com or by telephoning 021 914 9002. Confirmation of acceptance will be forwarded to all guests and should be presented at the seminar.
Follow up seminars are now being organised by the Stilus marketing team in Cape Town and Durban. The details of these will be publicised in the press.
Article from: www.stilus.co.za