Let’s talk Maintenance, Repairs and Replacements!

assess the condition of the common property. They will also ensure the costs being budgeted for are based on accurate quotations and take inflation into account over the ten year period.

Affordability of expenses

The affordability of expenses should be reviewed annually alongside the annual budget. The act stipulates the minimum amount that should be contributed to the maintenance reserve fund. It is important for trustees to consider the tenyear cash flow of the plan to ensure that the legal requirements are met as per the act. They should also consider the reality of sufficient annual contributions to cover all future estimated projects and costs.

According to the Sectional Title Schemes Management Act, each body corporate is required to establish a reserve fund, including a ten-year maintenance, repair, and replacement plan (MRR).

An MRR plan’s purpose is to ensure that the body corporate has enough funds to cover the costs of maintaining and repairing the common property over a ten-year period without having to raise any special levies. Ultimately, protecting the owner’s investment.

When implementing the reserve fund plan and calculating the annual reserve fund contribution, a few key factors must be considered. We have listed these points below;

Accuracy of the plan

The act stipulates that a plan be in place; however, the accuracy of the plan is crucial to ensuring the operational wellbeing of the scheme. We recommend all schemes have their MRR plan updated each year by specialist building consultants. Consultants will have the expertise to advise on the plan and provide onsite visits to

It is vital not to fall into the trap of only contributing the minimum amount required for the year in order to keep levies down. This will ultimately lead to a cash deficit and maintenance being postponed to future years.

The delay in maintenance on the building will have severe implications. A deteriorating building will result in an increase in maintenance costs. This could potentially also result in a special levy being raised in order to cover the higher costs of maintenance and repair, particularly if they become more urgent.

At FMS Property Managers, we utilise the reserve fund software in WeConnectu. This enables us to enter the reserve budget into the accounting system and report on annual costs against the approved maintenance reserve budget.

This is a fundamental reporting tool for trustees and management. They are able to review their management accounts on a monthly basis. The tool also assists in the planning of the year’s projects, ensuring the costs are kept within budget. We are then able to easily analyse the yearly spend and review which projects need to be carried over in the maintenance plan for the new year.

Are you prepared for the electricity tariff increase?!

Effective 1 July 2023, the electricity tariff will increase by 18.65%. This will significantly impact many South Africans. We at FMS Property Managers can assist you in being prepared for this change.

Eskom’s Homeflex tariff

Alongside the tariff increase, Eskom has also introduced the ‘homeflex’ (time of use) tariff, allocating seasonal high and low demand periods and daily peak and off-peak times. Electricity will be billed under this tariff based on the period of time it is used, i.e., electricity consumed during peak times in the winter will be charged at a higher R/kW than the electricity consumed during off-peak times in the summer.

Strategies to overcome these costs

Together with backup power experts InPower, we have provided strategies for Body Corporates and Homeowners Associations of Sectional Title Schemes to deal with Eskom’s continually rising cost of living.

Council and Tariff Reconciliation

Make sure that bulk meter readings are being correctly reconciled against the municipality’s charges on the building. Reconciling usage according to what is being charged ensures there is no ‘wastage’, either in power usage or finances, i.e., being overcharged for your water use by the municipality.

Load shifting

An electricity load management technique ‘shifting’ the load demand from peak hours to off-peak hours of the day. By installing timers on big energy users, such as geysers and battery backup packs, to run during off-peak hours, excessive costs can be avoided.

Owning your supply

There are long term benefits to body corporates owning their own electricity supply. Bulk buying electricity from InPower, as opposed to directly from the City means that body corporates can offer tenants discounted rates of electricity OR charge them rates in line with the City of Cape Town, retaining the excess funds.

Solar power

A sustainable solution to decrease electricity consumption, solar power is efficient for Body Corporates and Homeowners Associations, the initial capital investment will yield long term savings.

As loadshedding stage changes continue, we have to take into account the reality of a greater drain on their finances. and can

assist in the process.

Samantha Thwaites - Portfolio Manager

Being in the property industry for so many years has taught me that there is always something to be learned; there is always something to be done. This is why I enjoy what I do. This job does not allow for any idleness, it is just so fast-paced 24/7.

I love that my team varies in age. “Age is nothing but a number” when we work together and interact. We also enjoy a good laugh and it makes the dreary day more bright, also it keeps me sane!

Insurance claims

Apart from work, I am a mom to two boys and also a plant mom. I struggle going into a store and leaving without adding to my plant family! I cannot say that I favourite plant. I love them all!! From the low-maintenance plant to my dramatic Weeping Fig, which has been on the brink of death and is now somewhat thriving! If I was ever pressured to choose one that I enjoy the most, it would be the Watermelon Peperomia. It’s just too pretty. I’m also learning how to make macrame, so before you know it, all of my plants will be hanging from the ceiling.

Claims Facilitation Services (CFS), our in-house insurance claim team, processes claims on behalf of managing agents, trustees, body corporates, and homeowners associations.

We are committed to providing a bespoke service to our clients. In line with this, the claim procedure is not the same for all our clients. Claim procedures are available to you via WeConnectU. to view your claim procedure. Alternatively, reach out to our team for assistance.

Until next time

Our focussed commitment is serving our clients by being committed to excellence. With a legacy of experience, a passion for compliance, financial well-being of a scheme and the fostering of an asset, we will always ensure that your investment is well maintained.

FMS Property Managers are your first choice in property management.

We look forward to providing you with more insight and knowledge about property management and the Cape Town property market in our next newsletter!

Until then, if you have anything you’d like to discuss, to get in touch!