With the growing demand for sectional title property throughout South Africa, there is an increasing trend to upgrade units – and when this is done efficiently and in good taste, such upgrades can add significantly to the value of the units and the scheme as a whole.
This being the case, it comes as no surprise, says Tony Clarke, Managing Director of the Rawson Property Group, to find that buy-to-let investors are moving in on sectional title property, very often with the clear intention of adding to their unit’s value so as to raise the rent.
Clarke has, however, warned that owners of sectional title units are obliged by law to get the permission of the scheme’s trustees first: they are not allowed to do any alteration work without this permission.
If an owner engages a contractor with the permission of his body corporate, adds Clarke, it is essential to insist that every member of the workforce is registered in such a way that they can be identified during the course of the day and at the entrance and exit points. A full list of the employees on the site should be lodged with the trustees.
In addition, says Clarke, no contractor on a sectional title scheme should be allowed to go ahead until he has proved that he has a paid-up, comprehensive, all risks/liability insurance policy in place the day he starts work. In most cases the trustees will see that this is done, but there have been instances where this matter was overlooked.
“The reason for this important policy ruling,” says Clarke, “is that insurers will not accept responsibility for the insurance of a unit from the moment a contractor moves into it.”
Even if a casual day labourer is taken on for a limited period to handle such simple tasks as painting or the rewiring of an electric network, the owner should see that some sort of insurance policy is in place.
“In his excellent book ‘The Sectional Title Insurance Guide’, Mike Addison,” says Clarke, “quotes a hypothetical case where a 20 litre tin of paint falls two storeys onto a luxury motor vehicle below. The artisan in theory would be responsible for this, but in practice it would be the unit owner who engaged his services who would in the end have to pay compensation.
“Again, supposing an amateur plumber causes an undetected leak which gradually penetrates through to the ceiling of the unit below, the employer of the artisan would be held liable.”
Insurance issues become even more complex, says Clarke, when the body corporate’s common property is damaged, for example, if a contractor’s vehicle hits the entrance gate.
“Should a construction employee be killed or hurt, the body corporate’s trustees could be held responsible if it can be shown that they allowed the contractor to go ahead in a way that he did not comply with the Occupational Health and Safety Act. Trustees must, therefore, familarise themselves with this act and ensure that the contractor understands it and abides by its very comprehensive rulings.”
