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Insurance claims for damage to common property, who pays the excess?

There is currently a debate going on as to whose responsibility it is to pay the excess on insurance claims made for damage to common property by members of the body corporate.

It is a debate that isn't unique to Dio Velento and the arguments both for and against go like this:

According to Sectional Title expert Bob Gauld: (Sectional Title Online) "The question of who pays the excess is simply and logically answered. If the insurance companies did not insist on bodies corporate paying the first part of every claim, premiums would be unaffordably high. Excesses means lower premiums, from which the body corporate benefits. Therefore excesses have to be paid by the body corporate. Easy, isn't it?"

Alternatively, the current view of the body corporate and CSTM: With reference to “Demystifying Sectional Title” by Marina Constas & Karen Bleijs,
“ The question of who is responsible to pay the insurance excess in a body corporate situation has always been an extremely thorny issue. The correct viewpoint from a purely technical-legal perspective would be to say that because the body corporate is the “insured party” in term of the insurance policy, the body corporate would thus be liable for any excess payable in terms of the policy. From a practical perspective however, this would often lead to unfair results ! We view the matter as follows:
a) The safest way to regulate the payment of insurance excesses is to amend the rules of the scheme, either management or conduct rules;
b) Whether or not the rules regulate the payment of an insurance excess, management rule 68 (I) (vii) can be interpreted in such a way as to make the owner of a unit liable for the payment of the insurance excess should his geyser burst and the insurance company agrees to meet the claim;
c) Ultimately both the body corporate and the insurance company must consider the reason for the damage being caused in the first place, place the blame and recover the cost of the damage from the person or persons responsible.”

CSTM feels that the following clause in our conduct rules covers us in terms of point a) mentioned above:

21. DAMAGE TO COMMON PROPERTY

21.1. Should any damage whatsoever be caused to the common property by an occupant, and/or any of his family, and/or any of his visitors, and/or employees, their children or visitors, and/or other invitee of such occupant, or should any such person cause the Body Corporate to suffer any loss or incur any liability to property repair, he/she shall forthwith reimburse the Body Corporate in full in respect of such loss or expense. Should such occupant fail to repair such damage within seven days, the trustees may cause such damage to be repaired and such occupants shall reimburse the Body Corporate in full forthwith in respect of all costs and expenses arising out of or in connection therewith.
21.2. If a person damages the common property with his vehicle, he must, in the case of an accident, inform the trustees in writing, otherwise he/she will be held liable for the damages.
21.3. All repair work done by occupants themselves will be inspected according to building specifications.

Does the word "expense" cover excess or does it need to be stated explicitly?

In a normal accident, when two parties are involved in an accident, each claims from his own insurance and pays his own excess. The insurance company of the "innocent" party can attempt a recovery of costs from the guilty party's insurance and if successful, will refund the excess received to the innocent party. Should this not be the case here as well or does a resident of Dio have to pay both his own excess and that of the body corporate?

This matter is due to be discussed at the next trustee meeting on the 13th March. Feel free to join in the debate by attending or forwarding your opinions via email, comment to the post, letter, fax or even verbally to any of the trustees.

AGM 2007

This years AGM was "spirited" as usual. It's a pity we didn't get to thank our dedicated out-going chairman Amiras personally, whom everyone agrees did a splendid job. Thanks anyway Amiras, you were an inspirational chair to say the least! Ramon Captieux has been elected as the new chair with pretty much the same group of trustees give or take a few.

Minutes of the AGM will be posted here soon, but some of the highlights of the meeting included:

• The crazy backdated rates owed to rand water.
• The recurring issue of tiles on 2nd and 3rd floors.
• Improving the security of the complex with new access control measures.
• The issuing and enforcing of fines.

My 2 cents on the tile issue:
There are already people that have tiles and/or wooden floors and there are people that want to replace their carpets with tiles. Then there are people that are suffering as a result of people with tiles living above them, making a noise.

My proposed solution:

1. Allow tiles and wooden floors for everyone with one clause; the person installing the tiles must within reason make every effort to reduce the noise levels. They MUST provide proof including, but not restricted to quotes and receipts for the installation of noise buffers/insulation mats.
2. Owners that have already installed tiles or wooden floors without sound insulation must see that floor rugs are placed in high traffic areas.
3. Complainants against noisy neighbors with tiles living above must submit formal letters of complaint to the trustees. The trustees should then decide whether a reasonable effort has been made to reduce noise levels. If not, warnings and/or fines should be imposed.
   

At the end of the day it comes down to courtesy and tolerance. Those are conflicting values that cannot be imposed or expected by any trustee or body corporate. We must realize that we cannot expect courtesy from others without extending some ourselves and without a having degree of tolerance. Perhaps if our neighbors were friends it would be easier to be tolerant or courteous? But thats not Town House culture, it's simpler if all these people around you were just faceless, nameless people without feelings. It's a culture that needs to change!

p.s. I still don't get the argument that people potentially affected by noisy-tile-neighbors are a minority? We have 3 floored apartments, therefore 2 out 3 apartments have potential noisy-tile-neighbors living above them, which to me is a majority or have I missed something?

That said and done, there's never a dull AGM at Dio Velento! Please consider my suggestion or come up with your own for the proposed special GM regarding tiles.

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