What is the Maintenance, repair and replacement plan (10 year plan)?
The Maintenance, repair and replacement plan is a detailed schedule of expected maintenance for the scheme over the next 10 years. The plan is drawn up by the Scheme Executives, who may make use of service providers to assist.
The plan runs indefinitely. At the AGM, the scheme reviews the maintenance plan and the updated budget. The budget must always cover 10 years, so as each year ends the budget is updated to include new future items. Once approved the maintenance plan levy is adjusted if necessary.
The Maintenance, repair and replacement plan is mandated by the Sectional Titles Schemes Management Act, Regulation 22:
22. Maintenance, repair and replacement plan
(1) A body corporate or trustees must prepare a written maintenance, repair and replacement plan for the common property, setting out-
(a) the major capital items expected to require maintenance, repair and replacement within the next 10 years;
(b) the present condition or state of repair of those items;
(c) the time when those items or components of those items will need to be maintained, repaired or replaced;
(d) the estimated cost of the maintenance, repair and replacement of those items or components;
(e) the expected life of those items or components once maintained, repaired or replaced; and
(f) any other information the body corporate considers relevant.
(2) The annual contribution to the reserve fund for the maintenance, repair or replacement of each of the major capital items must be determined according to the following formula: [(estimated cost minus past contribution) divided by expected life].
(3) A maintenance, repair and replacement plan takes effect on its approval by the members in general meeting; provided that on approval of such a plan, members may lay down conditions for the payment of money from the reserve fund.
(4) The trustees must report the extent to which the approved maintenance, repair and replacement plan has been implemented to each annual general meeting.
The Scheme Executives are required to create a separate fund for the items budgeted for in the 10 Year Plan and to raise a levy to cover these items as per the Sectional Titles Schemes Management Act 3 (1)(b); 3 (1)(c); 3 (1)(e) and 3 (1)(f)
3. Functions of bodies corporate
(1) A body corporate must perform the functions entrusted to it by or under this Act or the rules, and such functions include-
(a) to establish and maintain an administrative fund which is reasonably sufficient to cover the estimated annual operating costs-
(i) for the repair, maintenance, management and administration of the common property (including reasonable provision for future maintenance and repairs);
(ii) for the payment of rates and taxes and other local municipality charges for the supply of electricity, gas, water, fuel and sanitary or other services to the building or land;
(iii) for the payment of any insurance premiums relating to the building or land; and
(iv) for the discharge of any duty or fulfilment of any other obligation of the body corporate;
(b) to establish and maintain a reserve fund in such amounts as are reasonably sufficient to cover the cost of future maintenance and repair of common property but not less than such amounts as may be prescribed by the Minister;
(c) to require the owners, whenever necessary, to make contributions to such funds: Provided that the body corporate must require the owners of sections entitled to the right to the exclusive use of a part or parts of the common property, whether or not such right is registered or conferred by rules, to make such additional contribution to the funds as is estimated necessary to defray the costs of rates and taxes, insurance and maintenance in respect of any such part or parts, including the provision of electricity and water, unless in terms of the rules the owners concerned are responsible for such costs;
(e) to determine the amounts to be raised for the purposes of paragraphs (a), (b) and (c);
(f) to raise the amounts so determined by levying contributions on the owners in proportion to the quotas of their respective sections;