Santam has taken a major shareholding in a new company launching a financial product tailor made to alleviate the serious liquidity problems experienced by South Africa’s sectional title property bodies corporate.

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 arrears from the defaulters.

Charles Coetzee, who has many years’ experience in assisting sectional title schemes (he was founder of Propel Levy Finance), is the managing director of Stilus.

He says sectional title liquidity problems 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 don’t pay their levies on time, the bodies corporate cannot pay for municipal services such as water, refuse collection and sewerage disposal, nor can they maintain their properties as they should.

“Sectional title complexes that are unable to pay their way will rapidly lose value, to the detriment of all involved, including 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 Africa’s 60 000 sectional title schemes, of which roughly one-third 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 the body corporate’s financial statements must be brought up to date and there must be 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 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 the Stilus policy will in the near future become mandatory for many bodies corporate.”

Send an email to vicky@stilus.co.za, call Michael Garvin call 021 914 9002 or visit www.stilus.co.za.