Page 17 - Kyalami_Issue2_2022

PROPERTY NEWS

Corporate to maintain this infrastructure. The local
municipality or their appointed agents supply the water,
electricity and sewage processing to residents in the
estate and charge for this, but they don’t maintain or
upgrade the internal services (infrastructure).

What most HOAs and all Body Corporates do is have
a ‘Reserve Fund’ that forms part of the levy and
accumulates to form a cushion that ensures there are
funds for future expenses beyond the annual budget
(which is typically operationally focussed), such as
infrastructure maintenance and upgrades. For body
corporates, this actually became legislation in 2014 to
force these homeowner representative bodies to prepare
for the future, as many were overlooking it.

The reality is, the original developer installs the
infrastructure at huge expense, but it does not last relinquish this responsibility from the Municipality if there
forever and it becomes the financial burden of the HOA/ is non-performance)?
BC to maintain and upgrade it in decades to come. This is
why a ‘Reserve Plan’ is often devised and implemented, We have to accept that there are large communities in our
generally with input of consulting experts (financial, risk metro that desperately need very basic services (access
and civil engineering) to cover future expenses, both to water, sewage etc.) and warrant prioritisation. If the
forecasted and unforeseen. capacity of the authorities continues to decease and
demand for such basic services continues to increase, a
The previous 2 paragraphs, however, describe the norm, privileged estate likes ours could understandably drop down
but Kyalami Estates is different. Our developer did Kyalami on the priority list.
Estates a huge favour back in the ‘80s when negotiating the
development approvals with the authorities – who agreed In conclusion, I believe we must persist in engaging with,
they would retain liability for the internal infrastructure within working with and encouraging the Municipality to repair
the estate i.e. they would own the roads, water lines etc. and and make improvements as much as we possibly can.
look after them. This is a massive windfall for the estate that But in parallel to this and, to be optimally prepared for
has realised huge levy savings over the past few decades. tomorrow’s uncertainties, it may be prudent to discuss
and consider the introduction of a ‘Reserve Fund’ line item
But ‘today’, the risk scenario has changed enormously to our budget, as most other estates have. This might well
compared to the ‘80s and the fact is, we are now directly be possible without having to increase the levies.
exposed to public sector infrastructure under-delivery.
Last but certainly not least, the local RE/MAX ONE franchise
So the uncertainty we face is for how long will the fix and (that I am a part of) is running the below awesome
‘patch-up’ of our infrastructure continue and if and when competition. That’s now even more reason to list your home
will we as an HOA need to take over (or at least try to with me as you stand a chance to win R100 000!!

rob@remaxone.co.za

Kyalami Estates • CONNECT • Issue 2 • 2022 15