Sectional title corner – Can we ignore CSOS and reserve fund levy requirements as we are a small, self-managed BC?
Hi, we are in a complex of 4 houses – different levies for each according to the sizes. At the moment we are self-managed with myself acting as chairlady, we keep a savings account which levies go into and two signatories required to draw cash if needed, plus a petty cash for daily expenses such as gardener etc. We have insurance for the complex. Each unit looks after their own section and does their own maintenance. The units are face brick and the gutters and downpipes are cleaned annually and painted; paid from the complex account when needed.
Can you advise whether we need to register with the Ombudsman and if so how do we do it? Also regarding this reserve account we keep hearing about, do we really need to open a second account or must I, along with the other owners, raise our levies a bit more to allow for repairs such as exterior plumbing and re-tarring driveways?
All other interior and private fencing, roof repairs and gardening etc. of their own private sections is done by each owner.
I did phone an agency to query what they would charge to manage our complex and was told that all they do is manage the money and we would still have to run petty cash and do all the day to day management – he told me we should carry on with our self-management as if they did the accounting for us it would increase our levies by up to R1,000 each!
In light of this, I would appreciate your advice on the following:
Can we continue with the one bank savings account which holds R40,000 at the moment and just increase the levies a bit more. At the moment our account is a savings one and we get some interest on it. My question is: Do we really need two accounts?
How necessary is auditing? I prepare a statement of expenses and a budget for the following year with proposed levy increases. This is done every year for our AGM and minutes are taken of all meetings and given to each owner. All expenses and files are also open for inspection. As long as all the four owners agree that everything is correct etc. then it is approved by one person and seconded by the others.
As stated above do we need to register with the Ombudsman and if so how to go about it and to calculate what payment he should get?
Thanks for any help you can give me – Rosemary Harlow
Hi Rosemary, thank you for your question. To address the first part of your question:
Yes, you need to register with CSOS. We use an auditing firm to do this for us and do all our annual returns to CSOS (contact Paul@beanies.co.za). You need to open a separate account and raise your levies so that the necessary reserves can be put in this fund. A 10 year maintenance plan is also mandatory.
Now for the second part of your question:
- Yes, you need a separate account.
- No, you need to audit the figures.
- Yes, you have to register. I would advise appointing a managing agent.
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This question was answered by experts from the Central Developments Property Group and facilitated by communications manager Alda Erasmus
Who is Alda Erasmus?
After obtaining an honours degree in Corporate Communication from UJ, Alda spent 11 years living and working in the USA, the Netherlands and the UK in the financial software industry. She joined the Cosmopolitan Projects and Central Developments Property Group in 2010. Since then Alda has worked with all the divisions in the Group, including human resources, land development, project management, construction, marketing and property management.