[WATCH] How does my body corporate being placed under administration affect my investment?
We have recently had an eight-month late AGM. The contents of the minutes are nowhere close to the “actual discussions” that did or did not take place. One issue which, as owners, we are very concerned about would be our home insurance and the replacement values.
We cannot recall any mention made of the fact that we owners resolved/voted to have our insurance replacement values (IRVs) lowered to the amount of R12,023/m².
I then investigated the history of our entire scheme’ insurance replacement values over the past five years. It would actually be factual to say that the majority of units are and have been underinsured. This would exclude a handful of owners who expressed at AGMs that the IRV of our particular units be increased based on our bond holders’ initial valuation and therefore increase annually.
Yet, no replacement schedule was actually ever sent to owners this year with our AGM pack.
We have now received an Amended Budget of Replacement Values. Having just completed the history of all 42 units in our scheme it is more than apparent that untruths are again contained in our scheme’s financial documentation.
Units that are/were extremely underinsured (still at R10,017.00 IRV per m²) have in fact been raised to R12,000, and units that requested continued additions and have adequate cover for 2018 (R13,500 per m²) have had theirs reduced. I did not request this.
My questions are:
Being underinsured surely casts the liability of a shortfall onto owners? No owner has had this explained to them.
- Would I/we have an immediate legal recourse and, having given the figures as above, am I correct or not?
- I am aware that you cannot guide me legally, but what are my options today as per the Sectional Titles Schemes Management Act now that it has been promulgated into law? I know this is an avenue, but long story, as an owner I did submit an application for dispute in 2016 that was set down for adjudication. We are still waiting for a date.
I am afraid that even if/when a new application is reviewed, so many financial inconsistencies would be included by myself and paper trails I have kept, that the CSOS would possibly order an administrator to be appointed? Would that not place my investment at a disadvantage? Yet, on the other side of the coin, it is just as bad if left as is. That would include management’s entire running/non running of our body corporate in any case.
Please would someone be able to advise and give direction. – Catherine
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