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When valuation measurements don’t add up

“Our recent valuation measurements do not quite add up – can this be right?”

This is a question we are faced with quite regularly, especially now that insurance valuations have become compulsory for sectional title schemes. Most often, the square meters of buildings as shown on the valuers’ report differs slightly from that shown on the pq schedule incorporated in the sectional plan documents.

We often get asked whether the valuer has made a mistake; however, the fact is that this actually indicates that the valuer is in fact doing their job properly. In fact, it is often a telltale sign that a valuer has not measured the buildings with their wheel if they simply use the sectional plan or participation quota (PQ) page as their measurements.

Some valuers do revert back to the sectional plan figures for simplicity but usually state the difference in these cases.

An obvious solution

The sectional plan measures from the median line of a section. For starters, there should be about a 110 mm difference around the entire diameter of the building as any valuer will measure the outside line of the buildings.

Let’s take the ideal example of a 10-unit scheme with 10 stand-alone units of 10m x 10m, i.e. 100sqm as shown on the sectional plan.

So 10m x 4 sides of each unit/building = 40m in circumference. This effectively measures the median line circumference which is the size of the section on the sectional title plan.

What is missing now, is the part of the building from the median line to the outside wall which is not reflected on the sectional title plan. To calculate this, we do the following: 40m in circumference x 110mm = 4,400 mm = 4.4 square meters.

Therefore, the sectional plan measures 100 square meters but the valuer’s measurement should be 104 square meters (assuming a 220mm double brick wall all round).  The difference will likely be even more in the case of cavity walls etc.

When considering all 10 units in the scheme (1,000 square meters), your figures may show 40 sqm difference. This is even without accounting for any stairwells, landings, etc.

Ensure proper insurance cover

When the managing agent or broker prepares the Schedule of Replacement Values, one can adjust the sqm back to sectional plan figures and proportionately adjust the rate per sqm to match.

We do recommend that any additional buildings not shown on the sectional plan are listed separately as these will form part of the common property until properly accounted for. Additional improvements (extensions) should also be shown separately so the insurer will know to includes these extended buildings.

Illegal or unapproved extensions or improvements that affect the size of sections or living areas can be a bone of contention – valuers must seek these out and advise accordingly. The measuring wheel finds these very quickly. An experienced eye will be able to quickly identify any potential problems on the plan or whether it’s simply accounting for the outer skin of the median line.


Author: Mike Addison

Contact Addsure – The Leaders in Sectional Title Insurance – to get fit and proper advice from advisors who understand Sectional Title. Contact us in Johannesburg (011) 704-3858; Durban (031) 459-1795; Cape Town (021) 551-5069