10-Year Maintenance Plan
The Mirfin method
Our service is based on a light inspection of the common property and an approximation of maintenance costs in accordance with the apparent condition and estimated useful life of the major capital assets.
The objective is not to achieve an accurate 10-year plan from the onset, but to have a reasonable estimate of the reserves required for the preservation of the combined capital assets. Accuracy can only be gained over time through ongoing adjustments in accordance with actual expenditure and contributions. The 10-year maintenance plan is, therefore, a “living” document that must be continuously adapted to the scheme’s specific needs and financial capability.
The Mirfin Dashboard offers a free cash flow planning tool for both the reserve and administrative funds. This requires the client’s input and forms the basis for reserve fund forecasting and levy calculations.
Click the video links below to learn more:
How to use the Mirfin Dashboard | How to plan your reserve fund cash flow
Important:
The community scheme’s appointed representatives are best suited to schedule maintenance activities in accordance with the scheme’s financial capability. A capital asset’s remaining useful life cannot be accurately predicted as there are many factors that can delay or accelerate its deterioration.
For a full-scale building audit that will reveal structural defects, rising damp, exposed asbestos, roofing and guttering problems, plumbing and electrical issues, and the existence and damage of termites and borers, it is essential to engage the services of a specialist contractor.
Preventative maintenance
The Mirfin Dashboard includes the following useful tools:
- Legally compliant 10-year plan
- Life-cycle cost analysis
- Maintenance cost estimates
- Reserve fund forecasting
- Admin fund budgeting
- Cash flow planning
- Levy calculation per unit
Long-term planning
If you are invested in a community scheme, you will want your investment to be protected at all times. This is achieved through proper maintenance and insurance as part of the trustees’ fiduciary duty to the body corporate. However, many community schemes fall short of their long-term planning requirements.
Prescribed Management Rule no. 22 of the Sectional Title Schemes Management Act calls for better financial management of body corporate finances to avert the need for special levies. A well-maintained scheme with sound financials attracts prospective buyers more easily and positively influences the market value of all units in the scheme.
Planning ahead for regular maintenance allows for time and finances to be managed more effectively. Regular maintenance is less onerous and the costs can be spread more evenly over time. Preventative maintenance is more cost-effective in the long term than emergency repairs.
Get 25% off the standard valuation fee when ordered together with the 10-year maintenance plan.
Reserve fund
A maintenance, repair and replacement plan for the major capital assets is essential to planning the reserve fund contributions and cash flow. The 10-year plan must be adjusted regularly in accordance with actual contributions and expenditure. Examples of reserve fund expenditure include exterior painting, waterproofing, roof replacement, security system upgrades and driveway renovations.
Operational expenses such as replacing light bulbs or repairing a faulty gate motor are allocated to the administrative fund. Therefore, these are excluded from reserve fund planning.
What does the law prescribe?
The Sectional Title Schemes Management Act No. 8 of 2011 (STSMA) aims to improve the management of bodies corporate and consequently, the shareholder value for individual members. It is prescribed that –
A body corporate or trustees must prepare a written maintenance, repair and replacement plan for the common property, setting out
- 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 of those items or components;
- The expected life of those items or components once maintained, repaired or replaced; and
- Any other information the body corporate considers relevant.
(STMS Act. No. 8 of 2011, rule no. 22.1)
The reserve fund maintained in terms of section 3(1)(b) of the Act must be used for the implementation of the maintenance, repair and replacement plan of the body corporate referred to in rule 22 (STMS Act. No. 8 of 2011, rule no. 24.2).
Why choose Mirfin for your 10-year maintenance plan?
Admin fund budgeting
Create a 10-year cash flow projection from your admin fund budget by escalating the expenses over time.
One-click quotations
No time for filling in forms? Just click the button for an instant quote and share it with your clients.
Levy calculations
Your scheme’s levy schedule is automatically re-calculated as you make adjustments to the 10-year maintenance plan and Admin Fund budget.
Secure document storage
Find the valuation, 10-year plan and sectional title plans in the “Documents” section of the Mirfin Dashboard. Upload your policy schedule and more for safekeeping.
98% service coverage
Our surveyors are situated in the densely populated areas of Johannesburg, Pretoria, Cape Town, Durban, Bloemfontein, Port Elizabeth, East London and Mossel Bay.
Reserve fund forecasting
Manage your Reserve Fund contributions to plan the expenditure relating to the maintenance, repair and replacement of capital assets.
Frequently asked questions
Long-term planning for the maintenance, repair and replacement of the body corporate’s major capital assets is essential for retaining the market value of the owned units in a scheme.
A well-maintained complex seldom needs to raise special levies and is attractive to potential real estate buyers.
Click here to learn more.
A body corporate’s admin fund pays for operational expenses, such as management fees, salaries, insurance premiums and routine maintenance activities such as repairing a gate motor, replacing a light bulb, fixing a leaking tap and gardening.
Reserve fund expenditure is allocated to items that add value and extend the useful life of a scheme’s capital assets. Examples include waterproofing, exterior painting, security system upgrades and driveway renovations.
Read more: How to allocate your maintenance costs
Mirfin’s surveyors are located across South Africa, and the 10-year maintenance plan can be updated and adjusted on our online Mirfin Dashboard on a regular basis, according to your scheme’s financial capabilities and needs.
Or simply do it yourself with Mirfin’s online DIY template.
Click here to get a free quote.
To calculate your monthly levies, a budget must be compiled for both the admin fund and the reserve fund. The reserve fund budget is derived from the 10-year maintenance, reserve and replacement plan.
The reserve fund levy refers to the contributions that fund the planned maintenance, repair and replacement of the scheme’s major capital assets.
The admin fund levy is based on the expenses required to keep the scheme in good running order.
The CSOS levy for each unit is calculated as [its individual admin fund levy amount less R500 multiplied by 2%], but not exceeding R40 per month.
All three levies together comprise the monthly levy contribution. Click here to learn more.
Our other services
- Body Corporate Valuations
- DIY 10-Year Maintenance Plan
- Commercial Property Valuations
- Municipal Rates Check