While CSOS does not have the resources to pro-actively 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.

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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.

Read more: The real reason for 10-year plans

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.

Read more: Why should a body corporate’s 10-year maintenance plan be kept updated?

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 practise preventative maintenance to avoid emergency repairs or replacement of assets.

Read more: How accurate is your 10-year maintenance plan?

If a cost item adds value to a capital asset, extends its useful life and/or prevents its deterioration (= preventative maintenance) such expenditure is typically allocated to the reserve fund.

Examples of reserve fund expenditure include exterior painting, waterproofing, roof replacement, security system upgrades, driveway renovations, modernising elevator cabs and upgrading to energy-efficient lighting.

Read More: How to allocate your maintenance costs: Part 2

The administrative fund pays for operational expenses such as management fees, insurance premiums, salaries and maintenance activities that keep assets in good working order (= routine maintenance).

Routine maintenance activities include 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: How to allocate your maintenance costs: Part 1

Mirfin’s approach is to provide a cost-effective 10-year maintenance plan for the cash-strapped body corporate. Our surveyor quantifies the major capital assets for which the body corporate is responsible and applies a reasonable approximation of maintenance costs in accordance with the apparent state of repair and the estimated maintenance cycle or remaining lifespan of each asset. The final product is a legally compliant 10-year maintenance plan that is based on the assumption that the body corporate is financially capable.

It must be noted that the 10-year plan is a “living” document that can only gain in accuracy and relevance through regular input by the trustees of the body corporate. To this end, the free and user-friendly Mirfin Dashboard empowers trustees to adjust the proposed cost estimates, maintenance cycles and maintenance scheduling to suit the body corporate’s preferences and in accordance with quotations obtained from the preferred maintenance contractors.

Watch: How to easily manage the 10-year maintenance plan

1. The trustees have better insights into the body corporate’s current cash flow and true financial capability than an external service provider.
2. A body corporate’s financial status is likely to change at any time due to unexpected expenses, arrear levies etc.
3. The remaining useful life of an asset cannot be accurately predicted as there are many factors that might delay or accelerate its deterioration.
4. The future escalation of costs cannot be accurately predicted.
5. The body corporate’s preferred maintenance contractors might quote a different cost than what was estimated by the provider of the 10-year maintenance plan.
6. The body corporate might wish to specify the technical scope differently to what the service provider envisioned.
7. The body corporate might decide to re-prioritise or stagger the recommended maintenance activities.
8. No service provider is able to provide an accurate cost estimate for all maintenance activities alike, such as construction, painting, waterproofing, elevators, security, access control, electrical, plumbing etc.; the onus is on trustees to obtain cost proposals from the relevant specialist contractors, bearing in mind that these will likely differ in price, scope and quality of workmanship and materials; only the body corporate can determine which maintenance cost proposal will best suit the scheme’s technical and qualitative requirements.

Watch: How to easily manage the 10-year maintenance plan

1. It is affordable, even for cash-strapped bodies corporate.
2. It can be easily maintained and updated on the Mirfin Dashboard by trustees with very little effort and no prior accounting knowledge.
3. The Mirfin Dashboard enables trustees to create a cash flow forecast based on the budgeted income and expenses for both the reserve fund and the admin fund.
4. The Mirfin Dashboard automatically re-calculates the levy contribution schedule (including the CSOS levy) in accordance with the adjustments made.
5. The Mirfin Dashboard allows you to create different financial scenarios for budgeting and voting purposes.

Read more: How to achieve financial prosperity in a body corporate

1. Legally compliant 10-year maintenance plan
2. Life-cycle cost analysis
3. Maintenance, repair and replacement cost estimates
4. Reserve fund forecasting
5. Admin fund budgeting
6. Cash flow planning
7. Levy calculation per unit

Read more: 10-year maintenance plans for sectional title schemes: What you need to know

The reserve fund is replenished with monthly levy contributions and interest earned on the account. The minimum annual reserve fund contribution is determined by the ratio between the previous financial year's reserve fund balance and total admin fund contribution.

Read more: Why the reserve fund budget plays a critical role in the 10-year plan

If the available funds are insufficient for the required maintenance, they can be supplemented by way of raising a special levy or obtaining a bridging loan. A reserve fund cashflow forecast based on the 10-year maintenance plan will guide you on avoiding the need for supplementary contributions.

Let Mirfin's online dashboard guide you in determining the correct reserve fund contribution and planning your reserve fund's cashflow.

Watch: An 8-step guide to setting up a financial roadmap for your 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

The levy schedule is displayed on the PDF file that you can download from the “Reserve Fund Planning” and “Admin Fund Planning” tabs.

Read more: Setting levies without bias