In today’s modern and economically tough times, it is becoming more common for professional people with their own businesses to work from a home office. This is quite likely in a residential sectional title schemes, notwithstanding that body corporate rules may disallow this practice.
From an insurance perspective, it is quite acceptable that an owner or tenant does work on their computer in their home office, provided that they do not entertain regular business client appointments on the premises or have delivery vehicles coming and going from the property. A residential complex is not the same as a business complex and the insurance risks are greater in a commercial environment, especially with regard to liability exposure and risks related to storage of household contents versus commercial stock, materials and equipment.
Should any section in a residential occupancy scheme be occupied as a business, it is very important that this is disclosed to the insurers. The insurers may then elect to apply a slightly higher premium rate, depending on the nature of the risk disclosed.
When making disclosure to your broker/insurer, it is important to mention the following:
- Name of business, e.g. BAD Architects
- Nature of business, e.g. drafting and registration of building plan diagrams for clients
- Occupancy risk: Any hazardous materials? (fuels, inks, paints, chemicals, etc.) Any storage or further spread of fire or explosion risk? (fabrics, cardboard, waste, wood, spices)
This being said, it is highly unlikely that trustees would give permission for any high risk commercial enterprise to operate from a residential section, as this may be against residential scheme rules.
Author: Brian Addison
Contact Addsure – The Leaders in Sectional Title Insurance – for fit and proper advice from advisors who understand sectional title. Contact us in Johannesburg on (011) 704-3858; in Durban on (031) 459-1795 and in Cape Town on (021) 551-5069