South Africa | Levies and Funds
Sectional Title Levies and the Reserve Fund
Every owner in a sectional title scheme pays levies to the body corporate, in proportion to the section's participation quota. The money goes into an administrative fund and a reserve fund, and the 2016 Regulations set a minimum reserve contribution. Unpaid levies are recovered through the Community Schemes Ombud Service.
The short answer
- Levies are split by participation quota, unless a rule made by special resolution sets another basis with the consent of any owner affected.
- If the reserve fund is below 25% of last year's administrative fund contributions, this year's reserve contribution must be at least 15% of the administrative fund budget.
- A written 10-year maintenance, repair and replacement plan sets the reserve contribution for each major item.
- Interest on arrears may not exceed the maximum rate under the National Credit Act, compounded monthly.
- Each unit also pays a CSOS levy of the lesser of R40 or 2% of its monthly levy above R500; units at R500 or less pay nothing.
The two funds
The administrative fund pays the yearly costs: repair, maintenance, management and administration of the common property, rates and municipal charges and insurance premiums (STSMA s 3(1)(a)). The reserve fund pays for future maintenance and repair of the common property under the maintenance plan (s 3(1)(b); MR 24). Insurance payouts for damage the body corporate is responsible for go into the reserve fund.
The minimum reserve contribution
Source: STSM Regulations reg 2. The text does not say which line applies at exactly 25%.
| Reserve fund at the end of last year | This year's minimum reserve contribution |
|---|---|
| Less than 25% of last year's administrative fund contributions | At least 15% of the budgeted administrative fund contribution |
| More than 25% but less than 100% | At least the amount budgeted for repairs and maintenance of common property from the administrative fund |
| 100% or more | No minimum |
The 10-year plan
The body corporate keeps a written plan listing the major capital items expected to need maintenance, repair or replacement within the next 10 years, with their condition, timing, cost and expected life (MR 22). Major capital items include wiring, plumbing, drainage, lifts, roofing, painting and waterproofing, parking, paving and security. Each item's yearly reserve contribution is its estimated cost minus past contributions, divided by its expected life. The plan takes effect when a general meeting approves it.
Levies, interest and recovery
- Levies are raised "in proportion to the quotas" of the sections (STSMA s 3(1)(f)). Owners of exclusive use areas pay extra for their rates, insurance and upkeep unless the rules say otherwise.
- Trustees can raise a special contribution for a necessary expense that cannot wait, and increase levies by at most 10% at the end of a financial year until the new budget (MR 21(3)).
- Within 14 days after the budget is approved, each member gets written notice of their contributions, due dates, interest rate and the dispute process (MR 25(1)).
- If unpaid, a final notice gives 14 days, stating the amount and the interest accruing daily (MR 25(2)).
- The body corporate recovers through an ombud (STSMA s 3(2)); the ombud can also order a tenant to pay rent to the body corporate until the landlord's debt is paid (CSOS Act s 39).
- Interest may not exceed the maximum rate under the National Credit Act, compounded monthly (MR 21(3)(c)). The rule does not name the credit category.
- Budgets may include a discount of up to 10% for paying on time.
Insurance
- Buildings insured at replacement value against fire and the prescribed risks, including storm, flood, burst pipes, earthquake and subsidence (STSMA s 3(1)(h); reg 3).
- A replacement valuation of all insured buildings at least every three years, presented to the AGM (MR 23(3)).
- Public liability cover of at least R10 million (MR 23(6)).
- Fidelity cover against fraud by trustees, managing agents or employees, at least the total of investments and reserves plus 25% of the operating budget (CSOS Regulations reg 15).
- An owner may insure their section against risks the body corporate policy does not cover (STSMA s 14).
The CSOS levy
- Each unit pays the lesser of R40 or 2% of the amount by which its monthly levy exceeds R500, collected by the body corporate and paid to CSOS quarterly.
- Examples from the gazette: a monthly levy of R1,000 gives R10; R1,500 gives R20; R2,000 gives R30; R2,500 and above gives R40.
- Units with a monthly levy of R500 or less pay nothing. CSOS bases the 2% on the administrative fund levy only.
- Payment is due by 30 April, 30 July, 30 October and 30 January.
Read from the Government Gazette copies on gov.za and the Community Schemes Ombud Service's 2025 practice directives on 31 October 2026. The Department of Human Settlements' 2026-27 plan lists amendment Bills for both Acts as still being drafted; none was law when we checked.
Common questions
How are sectional title levies calculated? +
The body corporate sets a budget and each owner pays in proportion to their section's participation quota (STSMA s 3(1)(f)), unless a rule made by special resolution sets another basis.
What is the minimum reserve fund contribution? +
If the reserve fund is below 25% of last year's administrative fund contributions, at least 15% of this year's administrative fund budget. Between 25% and 100%, at least the budgeted repairs and maintenance amount. At 100% or more, no minimum.
What is a 10-year maintenance plan? +
A written plan for the common property listing major capital items expected to need maintenance, repair or replacement within 10 years, with costs and expected lives. It sets each item's yearly reserve contribution.
What interest can a body corporate charge on arrears? +
Up to the maximum rate under the National Credit Act, compounded monthly in arrear (Management Rule 21(3)(c)).
How does a body corporate recover unpaid levies? +
After a final notice giving 14 days, by an application to the Community Schemes Ombud Service. An adjudicator's order is registered and enforced as a court judgment.
Can trustees raise levies without a meeting? +
Trustees can raise a special contribution for a necessary expense that cannot wait, and increase levies by at most 10% at the end of a financial year until the new budget is approved.
How often must the building be valued for insurance? +
At least every three years, with the replacement valuation presented to the AGM (Management Rule 23(3)).
What is the CSOS levy? +
A levy paid to the Community Schemes Ombud Service for each unit: the lesser of R40 or 2% of the monthly levy above R500. Units with a monthly levy of R500 or less pay nothing.
What is a levy clearance certificate? +
The body corporate's certificate that all money owed by the seller for the unit has been paid or provided for. A unit cannot be transferred without it. Two trustees or the managing agent sign it.
How long must financial records be kept? +
Six years after the transactions are completed (Management Rule 26(3)).
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