Where Does Your Money Go? A Sectional Title Breakdown on Levies

The Administrative Fund

In terms of STSMA section 3(1)(a), every Body Corporate must establish an administrative fund. This fund covers the everyday running costs of your scheme such as cleaning, gardening, security, and routine maintenance. Think of it as the community’s monthly household budget that keeps everything operating smoothly.

The Reserve Fund

The reserve fund is the scheme’s savings account. According to Regulation 2 of the STSMA Regulations, Bodies Corporate are required to maintain this fund for major repairs and long-term projects such as roof replacements, repainting, lift servicing, or paving. The law also prescribes minimum contribution levels to ensure that schemes do not face financial strain when large repairs are needed.

Insurance

Under STSMA section 3(1)(h), the Body Corporate must insure the building to its full replacement value against risks such as fire, storm, flooding, and theft. This insurance protects the structure and common property, but not an owner’s personal belongings inside their unit. For that, each owner needs separate home contents insurance.

Transparency and Accountability

Levies are managed with full transparency. The STSMA requires that a budget is prepared and approved every year, and that the financial statements are independently audited. During the Annual General Meeting (AGM), owners are entitled to review how levies have been allocated and spent, promoting trust and accountability in the scheme.

Final Thoughts

Levies are more than a monthly payment. They are a legal mechanism that keeps your scheme functional, well-maintained, and financially secure. Each rand is accounted for and directed toward protecting and preserving your shared property investment.

At Cenprop, we make sure your levies are managed in full compliance with the Sectional Titles legislation, ensuring your money works for you and your community.