Stilus sectional title Levy payment policy has had a warm welcome from bodies corporate
This senior staff of the new Santam-backed insurance policy, Stilus (Sectional Title Insurance Levy Security), report that in the first six weeks since the launch on the 10th of August they have already signed up over 1% of the 800 000 sectional title units in South Africa today.
Our goal, says Charles Coetzee, Executive Director of Stilus, is to have 5% of all units in South Africa on our books within twelve months of the launch. Obviously, therefore, we are already well ahead of target.
With the Stilus policy in place, bodies corporate are able to claim immediately for unpaid levies, the collection of which from the members is then left to the highly experienced Stilus team at no cost to the body corporate.
The market out there, says Coetzee, is potentially huge: the aggregate levies paid by members of sectional title schemes in South Africa is approximately R8 billion per annum we estimate that at least 15% of these payments are in arrears at any one time.
This situation makes the role and responsibilities of the body corporate trustees far more difficult to carry out, says Coetzee, and it is no secret that illiquidity is a constant threat to sectional title members as it inevitably results in their properties being poorly maintained and later losing value. It also results in accounts for municipal services going unpaid. All this can contribute to the downward spiral which has beset certain units in this sector.
The very favourable response to the new Stilus policy, says Coetzee, is not at all surprising.
Something like this, he says, was desperately needed. If people are thirsty and you offer them a glass of water, they will take it.
A Stilus policy, said Coetzee, not only guarantees that the sums owing on the unpaid levies are paid upfront but also covers special levies required for one-off modernisation and maintenance projects.
Defaulting members unable to pay a special levy are able to make an arrangement with the companys attorneys.
Michael Garvin, Marketing Director of Stilus, has stressed that Stilus covers all forms of sectional title schemes, including residential, commercial, industrial, mixed use and hotels. The usage of the property does not affect the Stilus premium which is usually calculated at 0,02% per annum of the aggregate material damage insured value.
It is beginning to be realised that Stilus creates a win-win situation for all involved, said Garvin. The body corporate trustees know that the cash flow is guaranteed and they can now budget to maintain their property efficiently. Members and bondholders know that the value of their asset is enhanced and their investment is no longer at risk. Managing agents recognise that they can now concentrate on managing the property rather than spending hours in the frustrating pursuit of unpaid levies.
Article from: www.stilus.co.za