ADVOKS GLOBAL · KENYA
Sectional Properties Act
38. Insurance
Edition: 2022-12-31 · In force
38. Insurance
(1)Where a sectional plan has not been registered prior to the sale of any units, the developer—(a)shall insure the units and the common property against—(i)loss resulting from destruction or damage caused by fire and such other perils as are specified in the by-laws; and(ii)damages awarded against the developer, the owner of a unit or the Corporation in an action for occupier's liability; and(b)may insure the units and the common property or either of them against additional perils other than those specified in the Act or the by-laws, and for that purpose the developer has an insurable interest in the units and the common property.(2)Upon the registration of the sectional plan, the insurable interest in the units and the common property passes to the Corporation, and if no insurance on the units and common property has been effected under subsection (1), the Corporation—(a)shall place insurance on the units and the common property against—(i)loss resulting from destruction or damage caused by fire and such other perils as are specified in the by-laws; and(ii)damages awarded against the owner of a unit or the body corporate in an action for occupier's liability; and(b)may place insurance on the units and the common property or either of them against additional perils other than those specified in the Act or the by-laws.(3)A Corporation shall, subject to subsection (4), maintain such insurance on the units and common property as has been placed under subsection (1) or (2).(4)Where insurance has been placed under subsection (1) (b) or (2) (b), such insurance may be continued by the Corporation unless it is prohibited from doing so by a resolution passed at a properly convened meeting of the Corporation.(5)Any payment by an insurer under a policy of insurance for destruction of or damage to a unit or the common property shall, notwithstanding the terms of the policy—(a)be paid to the insurance trustee designated in the by-laws or, where the by-laws do not designate an insurance trustee, to the Corporation; and(b)be used forthwith, for the repair or replacement of the insured property which was destroyed or damaged.(6)Notwithstanding the Insurance Act (Cap. 487) or any other policy of insurance, where insurance is placed by both a developer or a body corporate, and an owner against the loss resulting from destruction of or damage to the units or the common property—(a)the insurance placed by the developer or the body corporate is deemed to be first-loss insurance; and(b)the insurance placed by the owner of the unit in respect of the same property which is insured by the developer or the Corporation is deemed to be excess insurance.