Body Corporate Sinking Fund & Reserve Fund Calculator
10-year capital maintenance plan for SA sectional title bodies corporate — calculate required reserve fund, annual contributions, STSMA compliance status, and special levy risk
| Item | Year Due | Estimated Cost (inflation-adj.) |
|---|---|---|
| Driveway / parking paving | Year 2 | R 125 939 |
| Roof replacement / waterproofing | Year 5 | R 504 919 |
| Exterior painting | Year 5 | R 120 440 |
| Common area waterproofing | Year 6 | R 180 088 |
| Plumbing (major overhaul) | Year 10 | R 345 428 |
| Lift refurbishment | Year 10 | R 710 209 |
| Total 10-Year Capital Requirement | R 1 987 023 | |
Reserve Fund Planning for SA Body Corporates STSMA • 10-year plan • Funding formula
How to Use This Calculator
The Reserve Fund Plan tab takes your building's age, size, and current fund balance and generates a 10-year capital expenditure schedule covering roof replacement, painting, plumbing, waterproofing, paving, lift refurbishment (if applicable), and generator overhaul (for high-rises). It then calculates the annual contribution needed to fully fund these items, growing the fund at your chosen investment rate.
The Fund Adequacy tab assesses your current balance against the required reserve, shows the funding ratio percentage, STSMA compliance status, special levy risk, and recommended levy contribution increase.
This calculator is different from the Body Corporate Budget Calculator, which covers the annual operating budget (admin levy). The sinking fund / reserve fund covers capital replacement expenditure only.
STSMA Reserve Fund Requirements
- Section 3(1)(b) STSMA: The body corporate must establish and maintain a reserve fund for the repair, maintenance, and replacement of common property. Trustees must approve the reserve fund budget at each AGM.
- 10-year maintenance plan: The STSMA requires a written 10-year maintenance plan. This is not optional — trustees who fail to maintain it can be held liable. The plan must be reviewed annually.
- Minimum contribution: While not a fixed statutory percentage, best practice and CSOS guidelines recommend contributing at least 10% of gross levy income to the reserve fund.
- Prescribed investments: Reserve funds must be invested in a separate, interest-bearing account — money market, notice deposit, or fixed deposit. Investing in equities or using the reserve fund for operational costs is prohibited.
Worked Example
Sunridge Body Corporate has 20 units in a 4-storey building aged 10 years, with a current reserve fund of R150,000 and annual levy income of R480,000.
The 10-year capital plan projects R850,000 in replacement costs (roof R360,000, painting R90,000, plumbing R160,000, waterproofing R120,000, paving R110,000, lift R210,000 — some inflation-adjusted).
To fund this, the body corporate needs to contribute approximately R4,200/month — versus the current 10% STSMA contribution of R4,000/month. A shortfall of R200/month or roughly R10/unit/month needs to be addressed at the next AGM.
Frequently Asked Questions
What is a sinking fund / reserve fund in a South African body corporate?
The reserve fund (also called a sinking fund) is the body corporate's savings account for future capital expenditure — roof replacement, repainting, plumbing overhauls, lift refurbishment, and other major repairs. Under the STSMA, every body corporate must maintain a reserve fund separate from the day-to-day administrative fund. Owners contribute to it monthly as part of their levy.
How much should a body corporate keep in its reserve fund?
The reserve fund should be sized to fund the next 10-year capital expenditure plan. A minimum of 10% of annual levy income is a commonly recommended starting point, but older buildings or those with major upcoming capex may need 20–30%. The body corporate's 10-year maintenance plan (required by law) should drive the required reserve amount.
What happens if the reserve fund is inadequate when a major repair is needed?
If the reserve fund is insufficient, the body corporate must raise a special levy — a once-off additional charge to all unit owners to cover the shortfall. Special levies can be significant (R10,000–R50,000+ per unit for major items) and are often not budgeted for. A well-funded reserve fund avoids this scenario. Alternatively, the body corporate can borrow from a bank, but this is costly and requires trustee approval.
Where should a body corporate invest its reserve fund?
The STSMA prescribes that reserve funds must be in a separate interest-bearing account. Best options in SA in 2026 include: money market funds (9–9.5%, highly liquid), 32-day notice deposits (10–10.5%, 32-day withdrawal notice), and 12-month fixed deposits (10%+, locked in). Trustees must balance liquidity (in case funds are needed for urgent repairs) with maximising returns.
Can the CSOS force a body corporate to increase its reserve fund contributions?
Yes. The Community Schemes Ombud Service (CSOS) can investigate complaints from unit owners about inadequate reserve fund management. The CSOS can issue orders requiring trustees to increase contributions, commission a professional building inspection, or prepare a proper 10-year maintenance plan. Trustees who wilfully neglect reserve fund obligations can be held personally liable for resulting losses.