Thatched Structures in Sectional Title: A Critical Risk Management Guide for Trustees and Managing Agents

The Thatch Insurance Crisis: Why Entire Sectional Title Schemes Are Losing Cover

Sectional title trustees across South Africa are facing a potential thatch crisis: insurers are cancelling policies or hiking premiums for entire developments due to unmanaged thatch risks. What begins as aesthetic appeal is becoming financial catastrophe for unsuspecting schemes.

The Hidden Time Bomb in Your Development

Our cultural preference for indigenous building materials has created thousands of sectional title developments featuring thatched roofing on residential units, clubhouses, and entertainment facilities. These installations, whether original construction or later additions, now represent existential threats to scheme insurability that most trustees never anticipated.

As urban areas become increasingly dense, thatched structures pose significant fire risks not only to individual units but to entire sectional title complexes. While lapas and entertainment areas are common additions that require attention, trustees and managing agents must also consider schemes where thatch roofing forms the primary roofing material for residential units or common property buildings. These structures carry substantial insurance and liability implications that can affect the entire scheme, regardless of whether they are primary roofing systems or secondary structures.

Regulatory Compliance: A Legal Imperative

Thatched roofs and lapas are now governed by the same South African National Standards (SANS) that apply to conventional buildings. Municipal councils are actively conducting aerial surveillance to identify non-compliant structures, making enforcement a reality rather than a distant threat.

Key compliance requirements include:

• Approved building plans from local authorities

• Engineers' certificates and rational design certificates

• Adherence to National Building Regulations

For sectional title complexes specifically:

• Body corporate approval is mandatory under the Sectional Title Act (Act 95 of 1986)

• Municipal building line relaxations may be required

• Failure to obtain proper approvals can result in forced demolition at the owner's expense

Insurance Implications: The Industry Exodus and Hidden Costs

The Insurance Industry Withdrawal

Major insurers are systematically withdrawing from thatch-related risks following mounting losses. Entire sectional title schemes face policy cancellation not because of claims, but simply due to the presence of thatched structures within their boundaries. The insurance industry's message is clear: mitigate these risks comprehensively or lose cover entirely.

Insurance providers classify any development containing thatched elements as high-risk, requiring specialised underwriting that most mainstream insurers simply refuse to provide. Trustees must understand that thatch risk assessment extends far beyond individual structures—the presence of any thatched element can jeopardise insurance for the entire scheme.

Premium Loading and Cover Restrictions

Insurance companies classify thatched structures as "non-standard" and "special risk," leading to significantly higher premiums or complete cover withdrawal. More critically, these structures can impact insurance costs across multiple units within the scheme, with some insurers applying blanket premium increases to entire developments containing any thatched elements.

Premium Impact Zones: The Fire Risk Radius Effect

Understanding Distance Requirements: The National Building Regulations mandate specific separation distances between thatched structures and other buildings to limit fire spread risk.

These requirements directly impact insurance premiums:

• Lapas under 20m²: minimum 1m from any other built structure or electric fence

• Lapas over 20m²: minimum 4m from any built structure, 1m from electric fences

Why Distance Matters to Insurers: These distances represent fire safety zones. When a thatched structure is too close to conventional buildings, insurers view those neighboring structures as being at increased fire risk due to potential ember spread, radiant heat, or direct flame contact.

The Premium Penalty Zone: If your lapa doesn't meet these distance requirements, insurers will reclassify any building within the "danger zone" as if it also has a thatched roof, regardless of its actual roofing material. This means:

• Schemes with tiled roofs located too close to a non-compliant lapa may be charged thatch roof premiums

• Owners of affected units face dramatically higher insurance costs despite having no involvement in the lapa's construction

Real-World Example: If a 25m² lapa is built only 2m from a neighboring unit (instead of the required 4m), that neighboring unit's owner will pay thatch roof insurance rates even though their home has conventional tile roofing. In a sectional title scheme, this could affect several units simultaneously, creating significant financial disputes within the complex.

Mandatory Disclosure and Valuation Risks

Owners must disclose all capital additions to insurers, regardless of whether they choose to insure the structure. Non-disclosure can result in the entire unit being deemed under-insured, leading to proportional claim reductions across all claims—not just those related to the thatched structure.

Fire Safety: Non-Negotiable Requirements

Insurers mandate specific fire prevention measures that trustees must ensure are implemented and maintained:

Structural Requirements:

• Chimney stacks with full brick thickness (220mm) and proper flashing

• Spark arrestors fitted minimum 700mm from stack top

• Annual chimney cleaning to prevent soot ignition

Site Management:

• 25m clearance zone around thatched structures (maintained lawns and gardens excepted)

• On-site fire fighting equipment (minimum 4kg dry powder extinguisher)

• Annual equipment testing and servicing

Lightning Protection: While not mandatory, insurers may require lightning conductors, particularly in high-risk areas like Gauteng, with proper earthing and bonding of all metal components.

Trustee and Managing Agent Action Points

Whether dealing with primary thatched roofing on residential units or secondary structures like lapas, trustees and managing agents must take comprehensive action:

1. Comprehensive structural audit: Identify all thatched structures within the scheme, including primary roofing systems on units and common property buildings, as well as secondary structures like lapas and entertainment areas

2. Verify compliance: Ensure all structures have proper municipal and body corporate approvals

3. Review insurance policies: Confirm all thatched structures are disclosed and properly valued—this is particularly critical where entire buildings have thatched roofing

4. Establish maintenance protocols: Implement annual inspection and maintenance schedules for all thatched elements, prioritising primary roofing systems that protect living spaces

5. Update scheme rules: Consider specific conduct rules regarding thatched structure installation, maintenance, and modifications

6. Communicate risks: Ensure all owners understand the insurance and compliance implications, especially in schemes with primary thatched roofing where collective responsibility is heightened

Thatched structures in sectional title schemes represent a complex intersection of regulatory compliance, insurance risk, and community liability. The current insurance crisis surrounding thatch risks means that trustees and managing agents who fail to properly manage these structures expose themselves, the body corporate, and individual owners to not just significant financial and legal risks, but potential loss of insurance cover entirely.

The insurance industry's systematic withdrawal from thatch-related risks has transformed what was once an aesthetic choice into an existential threat to scheme operations. Proactive management, strict compliance verification, and ongoing monitoring are no longer optional—they are essential to maintain any insurance cover at all, let alone at reasonable rates.