Administrative and reserve funds
24.(1) The administrative fund referred to in section 3(1)(a) of the Act must be used to fund the operating expenses of the body corporate for a particular financial year.
(2) The reserve fund maintained in terms of section 3(1)(b) of the Act must be used for the implementation of the maintenance, repair and replacement plan of the body corporate referred to in rule 22.
(3) The following amounts must be paid into the reserve fund —
(a) any part of the annual levies designated as being for the purpose of reserves
or the maintenance, repair and replacement plan;
(b) any amounts received under an insurance policy in respect of damage or
destruction of property for which the body corporate is responsible;
(c) any interest earned on the investment of the money in the reserve fund;
(d) any other amounts determined by the body corporate,
and all other body corporate income must be paid into the administrative fund.
(4) Money may be paid out of the administrative fund in accordance with trustee resolutions and the approved budget for the administrative fund.
(5) Money may be paid out of the reserve fund —
(a) at any time in accordance with trustee resolutions and the approved
maintenance, repair and replacement plan; or
(b) if the trustees resolve that such a payment is necessary for the purpose of
an urgent maintenance, repair or replacement expense, which purpose
includes, without limitation —
(i) to comply with an order of a court or an adjudicator;
(ii) to repair, maintain or replace any property for which the body
corporate is responsible where there are reasonable grounds to
believe that an immediate expenditure is necessary to ensure safety
or prevent significant loss or damage to persons or property;
(iii) to repair any property for which the body corporate is responsible
where the need for the repairs could not have been reasonably
foreseen in preparing the maintenance, repair and replacement plan;
(iv) to enable the body corporate to obtain adequate insurance for
property that the body corporate is required to insure;
provided that the trustees must report to the members on any such
expenditure as soon as possible after it is made.
(6) Expenditure under sub-rule (5)(b) —
(a) must not exceed—
(i) the amount necessary for the purpose for which it is expended; or
(ii) any limitation imposed by the body corporate on expenditure; and
(b) must comply with any restrictions imposed or directions given by members.
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STAATSKOERANT, 2 OKTOBER 2015 No. 39247 79