Insuring heritage property in South Africa – how it works and what to consider | Everything Property

Insuring heritage property in South Africa – how it works and what to consider

heritage property

For many South Africans, the thought of owning a heritage property is an exciting prospect, given its cultural relevance, its potential worth as an investment in conjunction with its distinctive architectural character. Heritage properties do however come with a unique set of specifications regarding their upkeep and maintenance, as regulated by the National Heritage Resources Act of 1999. As such, insuring a heritage property requires specialist expertise and advice based on an informed perspective on the unique risks involved.

Providing advice on what to consider when purchasing a heritage property for residential or commercial purposes, Karen Rimmer, Head of Distribution of PSG Insure explains that while older buildings do not by definition automatically carry a larger risk, there are specific areas of risk that are unique to these types of properties. “Because older buildings are constructed using dated building techniques, materials and technology, they are more susceptible to wear and tear than their contemporary counterparts. Factors such as these make insuring these buildings fairly complex and require specialist expertise on all aspects.”

Furthermore, the use of copper in household water systems and fittings is significantly more prominent in heritage properties. Recent media headlines indicated that the threat posed by the theft of copper in older buildings remains substantially high, effectively costing the country more than R45 billion annually. Just a few years ago, the theft of the copper plaques that serve as identifiers for authentic heritage properties in Stellenbosch and other destinations in South Africa was raised as a growing problem. In late 2021, the roof of the historic Pietermaritzburg City Hall was stripped of its copper sheeting, causing severe damage and incurring big financial losses for the municipality.

Pointing to these occurrences, Rimmer asserts that, “the expert knowledge that specialist insurers have on the local crime landscape is a crucial factor in helping clients to make sure that they have adequate insurance for their heritage property or commercial entities. In addition, policies that are tailored to heritage properties will have the appropriate clauses that outline the responsibility of the insured to implement risk management procedures,” says Rimmer. When assessing the eligibility of heritage properties to be sold to members of the public, local authorities will conduct a heritage survey of the building and its surrounds in order to ascertain the historical significance of the built environment and the cultural landscape.

Rimmer explains that this may include specific plants, trees, garden areas and vegetation – the preservation of which may fall under the responsibilities of the prospective owner. These “natural assets” are a good example of how niche the expertise of specialist risk analysts and underwriters needs to be in order to advise property owners accordingly.

According to the National Heritage Resources Act, any structure (or part thereof) that is older than 60 years may not be altered or demolished without a permit issued by the relevant provincial authority. By law, heritage properties fall into one of three tiers. The higher a property is rated on the tiered system, the more stringent the limitations are on whether that building can be altered in any structural or aesthetic manner.

For instance, buildings in Tier One, also referred to as the Heritage Protection Overlay Zone, fall within entire areas that are of historical significance. An example of this in the Western Cape would be Chelsea Village in Wynberg or St James, along South Africa’s Indian Ocean seaboard. According to legislation, any alteration or addition to these buildings, apart from internal walls, need to be approved by the local municipality or relevant heritage resources department. The guidelines for the maintenance of these properties lean towards minimal intervention and rehabilitation, with alterations or adjustments serving only to enhance the historical significance of the building.

“Depending on the location of a heritage property, a number of legal exemptions make it possible for heritage homeowners to repaint internal sections of the property, conduct landscaping activities that do not change the topography of the area and replace roof coverings using identical materials and treatments. There is, however, a significant degree of interpretation where these restrictions are concerned.

“As such, any work carried out on a heritage property needs to be guided by the municipal agent and completed in consultation with the insurer. For this reason, insurers often recommend that homeowners compile maintenance plans for their heritage properties that can be approved and reviewed beforehand to ensure that all possible risks have been considered. A heritage building is a very special asset, insuring it appropriately therefore is of great importance, make sure you get the experts in to help you,” concludes Rimmer.

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