10-Year Maintenance, Repair and Replacement Plans for Sectional Title Schemes: What you need to know

A body corporate has the responsibility to plan for the maintenance, repair and replacement of their scheme’s major capital assets.

According to the Sectional Titles Schemes Management (STSM) Act, all sectional title schemes are required to have a 10-year maintenance, repair and replacement plan (MRRP) in place.

Below are the most frequently asked questions we received regarding the 10-year maintenance plan.

If you are looking for a guide on how to set up your 10-year maintenance plan, visit our “How to create a 10 year maintenance plan” article. You can also easily manage your 10-year plan on the Mirfin Dashboard.

10-Year Maintenance Plans - Frequently Asked Questions

What is a 10-year maintenance plan?

In the past, many community schemes found themselves without sufficient funds to perform maintenance projects, forcing them to either delay the project – leading to further deterioration of the building – or to raise a special levy to finance the project.

Prescribed Management Rule 22 of the Sectional Title Schemes Management Act requires bodies corporate to draw up 10-year plans in which they estimate the total costs needed for the maintenance, repair and replacement of all the major capital assets, and to save towards the required amount.

Therefore, trustees are obliged to prepare a MRRP for the common property in writing, setting out the following:

  • the major capital items expected to require maintenance, repair and replacement within the next 10 years;
  • the present condition or state of repair of those items;
  • the time when those items or components of those items will need to be maintained, repaired or replaced;
  • the estimated cost of the maintenance, repair and replacement;
  • the expected life of those items or components once maintained, repaired or replaced;
  • any other information the body corporate considers relevant.

When regular maintenance is planned for, it allows for time and finances to be managed more efficiently. If the maintenance plan is carried out regularly, the tasks will become less demanding and the costs are distributed more evenly over time. Taking a preventative maintenance approach will be more resourceful than dealing with emergency repairs.

Download our 10-year maintenance plan brochure now.

What is the purpose of the 10-year maintenance plan?

The purpose of the 10-year maintenance plan is to reasonably estimate the financial resources to be allocated to the reserve fund for the planned maintenance, repair and replacement of the body corporate’s major capital assets.

The idea of a 10-year maintenance plan is not to repair or replace capital assets only when they fail, but to schedule general preventative maintenance that will extend the useful life of all capital assets and avert failure.

Is the 10-year maintenance plan compulsory for bodies corporate?

Yes, according to the Sectional Title Schemes Management Act, a 10-year maintenance, repair and replacement plan for major capital assets must be presented at the annual general meeting for approval by the members of the body corporate.

What are the requirements of the STSM Act?
The Sectional Titles Schemes Management (STSM) Act specifies that major capital items, such as exterior painting, waterproofing, roof replacement, security system upgrades, driveway renovations, modernising elevator cabs and upgrading to energy-efficient lighting, must be included in the scheme’s maintenance plan. The Act also specifies that trustees must report on the 10-year maintenance plan at each annual general meeting (AGM). This report keeps all owners abreast of planned maintenance work and its associated expenses.
How does CSOS enforce the 10-year maintenance plan on bodies corporate?

While CSOS does not have the resources to proactively police each and every community scheme, it relies on whistleblowing, lodged disputes and random checks to reveal non-compliance. When detected, CSOS will hold the responsible parties accountable and enforce compliance through appropriate civil and criminal sanctions as well as imposing penalties with the aim to set a deterrent for other offenders.

Is the 10-year maintenance plan valid for 10 years, or should it be updated on a regular basis?

It is impossible to set up a maintenance plan that will remain valid for a period of 10 years as adjustments need to be made to account for real-life dynamics in the scheme, inflation of costs, shifting priorities etc. Therefore, the 10-year maintenance plan must be updated at least annually for the AGM, as required by legislation.

You can try our 10-year maintenance plan online tool which will save a lot of time for you to keep your 10-year maintenance plan up to date.

Is a 10-year maintenance plan required if the complex is still new with no apparent maintenance issues?

Sooner or later, maintenance issues will arise in any building and, as such, must be anticipated and planned for in advance. In fact, the aim of the 10-year maintenance plan is to practice preventative maintenance to avoid emergency repairs or replacement of assets.

Regardless of how new a complex is, the Sectional Title Schemes Management Act requires all bodies corporate to draw up 10-year plans and to present them at the annual general meeting for approval by the members of the body corporate.

What is a Reserve Fund?

Along with the maintenance, repair and replacement plan, bodies corporate need to create and maintain a reserve fund that is used to implement the MRRP. Both the MRRP and the reserve fund forecast have to be presented at the annual general meeting (AGM) for approval by the members. It should also be amended as and when needed, keeping a record of all contributions and expenditure.

There is a statutory minimum annual contribution to the reserve fund, depending on the ratio between the reserve fund balance and the administrative fund contributions.

Operational expenses such as fixing a leaking tap or a defective gate motor are settled using the administrative fund. For this reason, it is excluded from reserve fund planning.

Read more: Reserve fund forecast | Body corporate reserve funds: What you need to know

What is an Admin Fund?

The administrative fund pays for operational expenses such as management fees, insurance premiums and salaries. It also pays for routine maintenance activities, such as replacing a light bulb, fixing a leaking tap, repairing a faulty gate motor, cleaning the pool, gardening services, elevator maintenance and other related tasks that are performed on a frequent or ongoing basis.

Read more: Body corporate administrative fund

How to calculate the levies for a body corporate?

A section's monthly levy constitutes the sum of its share in the reserve fund levy, the admin fund levy and the CSOS levy:

  • Reserve Fund Levy:This is calculated as the sum of the annual reserve fund contribution and the supplementary contribution multiplied by the section's registered participation quota (section floor area divided by total floor area) divided by 12 months.    
  • Admin Fund Levy:This is calculated as the sum of the combined income amount multiplied by the section's registered participation quota (section floor area divided by total floor area).                       
  • CSOS Levy:This is calculated as (the admin fund levy amount less R500) multiplied by 2%, but not exceeding R40 per month.

Read more: How to calculate your community scheme levy

Why should I manage my 10-Year Plan on the Mirfin Dashboard?

For all existing customers, Mirfin offers access to our practical and useful online Mirfin Dashboard where users can update their 10-year plan whenever necessary.

Normally, one representative of a scheme is provided with access to the dashboard where they will be able to make adjustments and access the most updated version of the reserve fund forecast.

Keeping the sectional plans up to date at all times is beneficial to the body corporate and individual owners alike and, besides being adequately covered, ensures that every owner is apportioned the correct levies.

Done with the questions?

Learn how to create a 10-year maintenance plan

The reserve fundadmin fund and levies all play an important role in creating a successful and sustainable 10-year maintenance, repair and replacement plan for bodies corporate and homeowners’ associations. The admin fund is used for day-to-day expenses such as repairs and maintenance, while the reserve fund is set aside for major expenses that are expected to occur in the future, such as roof replacements or paving projects. The levies are fees charged to each owner in order to fund these two accounts. 

Manage your 10-year plan on the Mirfin Dashboard

The Mirfin Dashboard is free to use for property managers, insurance brokers, auditors, body corporate trustees, HOA directors and homeowners. For certain Dashboard features to be fully available, a property valuation or 10-year maintenance plan must be active.

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Comments (4)

  1. Jenny Kerchhoff
    July 1, 2023

    Could you please advise if Ten year plan must be submitted to CSOS?

    • mirfin_admin
      July 5, 2023

      Hi Jenny, the 10-year plan must not be submitted to CSOS but must be presented at the AGM for approval by the body corporate members.

  2. Jenny Kerchhoff
    July 1, 2023

    Should I submit the MRRP to CSOS for approval

    • mirfin_admin
      July 5, 2023

      CSOS cannot approve the 10-year plan because they are unable to verify the condition of your complex, nor the maintenance required, nor the expenditure allocated to the upkeep of each capital asset.

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