Bondholder Interests
This makes provision for when your lending institution requires that its interests in the residual bond value of your unit must be insured.
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What the law says about Bondholder Interests
STSM Regulation 23(1) states that the insurance policies of the body corporate must -
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(a)(iii) provide cover against risks that holders of registered first mortgage bonds over not less than 25 per cent in number of the primary sections by written notice to the body corporate may require to be covered by insurance;​
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(d) include a clause in terms of which the policy is valid and enforceable by any holder of a registered mortgage bond over a section or exclusive use area against the insurer notwithstanding any circumstances whatsoever which would otherwise entitle the insurer to refuse to make payment of the amount insured, unless and until the insurer terminates the insurance on at least 30 days’ notice to the bondholder.
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STSM Regulation 23(5) further states that on written request by any registered bondholder and the furnishing of satisfactory proof, the body corporate must record the cession to that bondholder of that member’s interest in any of the proceeds of the insurance policies of the body corporate.
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Other Insurable Interests
Examples for other insurable interests might include -
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Golf carts
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Gym equipment
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Liability for a frail care facility
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What the law says about other insurable interest
STSM Regulation 23(1)(a)(iii) states that the insurance policies of the body corporate must provide cover against risks that members resolve must be covered by insurance.
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STSM Regulation 23(8) states that a body corporate, authorised by a special resolution of members, may insure any additional insurable interest the body corporate has -
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(a) in the land and buildings included in the scheme; and
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(b) relating to the performance of its functions, for an amount determined in that resolution.
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