The cost of maintenance for a sectional title scheme is commonly determined by its size, the current state of repair and the extent of maintenance required. To gauge these costs, the body corporate needs to obtain quotes from the relevant contractors.
Did you know that many bodies corporate lose money on insurance premiums by skimping on the valuation? In some cases, the reason might be that the body corporate has not met its obligation to obtain the mandatory 3-yearly replacement cost valuation – this usually leads to over-escalating the sum insured by applying the same “on-the-safe-side” escalation rate of 10% year after year.
Creating a financial roadmap for your sectional title scheme starts with understanding how your levy is calculated and what it includes. To that end, we will focus on the three parts that make up the community scheme levy in this article, namely the contributions required for the reserve fund, the contributions to the admin fund and the CSOS fee.
Sectional title levies can be the source of a great deal of debate and conflict within a body corporate. The process of determining body corporate levies should be transparent, methodical and done without any bias.
Having a 10-year maintenance plan for your body corporate is a requirement by law. A sectional title maintenance plan assists trustees with keeping all buildings and common property in a good state of repair, as this secures and safeguards the owners’ property investments.