HouseCheck Body Corporate Maintenance Inspections
HouseCheck has made it super easy for body corporates to outsource the creation of their maintenance, repair and replacement plans.
In terms of the Sectional Title Schemes management (Act 8 of 2011) regulations as set out by the minister in the Government Gazette on 7 October 2016 Body Corporates have to:
- Establish a reserve fund for future costs including maintenance.
- Prepare a written maintenance, repair and replacement plan for capital items over the next ten years.
- Prepare a report on the current condition or state of repair for those items and and the times when those items will need to be maintained, repaired to replaced.
- Estimate the maintenance, repair and replacement costs over the next ten years.
- Determine the annual contribution to the reserve fund [(estimated cost minus past contribution) divided by estimated life].
The maintenance, repair and replacement plan takes effect on it’s approval by the members in general meeting.
Each year the trustees must report the extent to which the approved maintenance, repair and replacement plan has been implemented to each annual general meeting.
The HouseCheck Solution
HouseCheck has developed a product that provides all these requirements. We call it the Maintenence Action Plan (MAP).
A HouseCheck SAHITA trained inspector will provide an independent report on the current condition of the property. Our team will estimate the maintenance and repair costs over the next ten years and determine the annual contribution necessary to the reserve fund to cover the cost of maintenance as envisioned in the ministers regulations. The dynamic MAP modelling is done in conjunction with the trustees until ready to be presented to the body corporate AGM.
A HouseCheck representative is normally available to do the MAP presentation at the AGM.
What is the process:
In terms of the regulations an annual report needs to be prepared. The initial report takes quite a bit of work as estimates of the size of the property need to be concluded. Individual components have different lifespans and this data has to be collated for each property. This represents a "take on” phase. This phase does not have to be repeated in future years unless further improvements or units are added to the complex.
The next component is the actual inspection which needs to be undertaken annually. This requires an inspector to make an assessment of the current condition of components and to revise his or her view on the likely maintenance, repair or replacement date. This report’s information needs to be added into the specially developed HouseChecks management tool to provide for an updated maintenance, repair and replacement plan cost over the next ten years.
There are various factors that can influence the maintenance, repair and replacement plan, most notably severe weather conditions.
What does it cost?
Costs depend on the size of the property, whether updated plans are available and the situation of the body corporate, whether specialized equipment is required to view the roof structure etc.. A quote can be obtained by filling in<this form>.
Typically the first years costs will be slightly higher than than future years costs as estimates of size are required to be made.
What if your body corporate decides not to do a maintenance plan?
Under section 26(f) of the regulations, an independent auditor needs to review the annual statements, express a view on the annual maintenance plan and the body corporate must make this available to any member, registered bondholder or managing agent. It is therefore unlikely that units can be sold or be transferred without this being in place.
A body corporate must:
26 d) prepare a maintenance, repair and replacement plan in accordance with rule 22 for presentation at the annual general meeting;
26 f) (5) (c) The audit of a body corporate’s annual financial statements—must include opinions as to whether or not—
(ii) the body corporate has complied with the accounting requirements set out in rules 21, 24 and this rule 26, with a specific description of any failure to comply with such requirements;
So it is obvious that the auditor needs to express an opinion as to whether the body corporate has compiled a maintenance, repair and replacement plan in accordance with rule 22 for presentation at the annual general meeting and how they have progressed in the implementation of such plan as per 22 f) (4).
Furthermore 26 f) (2) requires that On the application of any member, registered bondholder or of the managing agent, the body corporate must make all or any of the books of account and records available for inspection and copying.
In practice when transfer of a property takes place the transferring attorney always asks for the rules of the body corporate and the levy amount and I presume will now insist on seeing these financials to determine the buyers liability.
Therefore non compliance with the provision of the regulations may lead to problems with registering of bands.