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Plan for the future...is your strata maintenance plan in check?



 
Having a budgeted for, well-planned and executed maintenance plan is an asset to any property owner – and no more so than in Strata where the burden of the cost is fairly contributed to and shared by the community


Maintenance plans are a legal requirement in most states/territories and are funded and budgeted for by periodic payments made by strata property owners and allocated to a ‘Sinking Fund’. This can also be referred to as a ‘Maintenance Fund’ or ‘Capital Works Fund’, for what is essentially a legally required and extremely beneficial community savings account for property and building maintenance.

All buildings and properties require maintenance in various forms:

  • ongoing
  • preventive
  • repairs (emergency and planned)
  • In Strata, community contributions to the funding of this maintenance is a fair way of ensuring that the cost of these expenses is shared over the time period the benefits of the property are being enjoyed by the owner or their tenants. A properly maintained property retains its value and ensures it remains a pleasant and safe place for its residents to enjoy.

    However, in order to determine the amount that each owner needs to contribute to the fund, a well-planned and defined maintenance plan must be developed and adhered to. This is where property owners need to be informed and understand a bit more about maintenance plans and the requirements specific to their Owners Corporation and State/Territory.

    What do Maintenance Plans cover?

    Maintenance plans cover the maintenance of areas of the common property. They do not cover maintenance particular to a private lot. The definition of what is common property and private property in Strata does differ from State/Territory to State/Territory, so if you need clarification, it is best to check online for the law relevant to you or turn to your Body Corporate Manager or Committee to provide you with the information.

    A good maintenance plan will ensure that:

  • Common property is protected
  • Major expenses and capital works are budgeted for
  • The property is proactively maintained in a planned and timely manner
  • The need to raise money through unexpected and large special levies is mitigated
  • There are contingency funds available for unforeseen emergency works
  • Examples of Common Property items (Note: these can differ for each State/Territory) that need to be budgeted for in the Maintenance Plan are:

  • Roofs and balconies
  • Doors and windows
  • Lifts
  • Shared laundries and bin rooms
  • Security systems
  • Sewage
  • Car parks, driveways and entrances
  • Exterior wall painting
  • Fences
  • BBQ areas
  • Pool and surrounds
  • Gyms and other facilities
  • Utility infrastructure (like equipment, pipes and wiring)
  • What are each State/Territories Maintenance Plan legislations?

    The requirement and management of maintenance plans is legislated in each State and Territory differently. Victoria is changing their rules effective from the 1st of December 2021. Instead of a one-size-fits-all approach, Owners Corporations will be divided into 5 tiers determined by their size. For example, tiers 1 and 2 will be required to have a 10-year maintenance plan, which is good news for all Strata property owners. Read more on this at https://www.consumer.vic.gov.au/housing/owners-corporations/property-maintenance/maintenance-plan

    Other states such as Queensland, NSW, ACT, WA also all require 10-year budgets for their property maintenance.

    Visit these links for more information on:

  • Northern Territory: https://nt.gov.au/property/buying-and-selling-a-home/ways-to-buy-or-sell-a-home/buying-a-unit-in-a-body-corporate
  • South Australia: https://www.agd.sa.gov.au/sites/default/files/fact_sheet_-_mandatory_sinking_fund_budgets_1.pdf?acsf_files_redirect
  • Is your maintenance plan in check?

    Unless you have been proactive, or are a committee member for your Owners Corporation, it is possible that you do not know the answer to this question. Although you are not expected to be an expert in the area, finding out more about the maintenance plan for your property is time worth spending. So how do you do this?

  • Request a copy of your strata maintenance plan if you have not already seen it
  • Read and review documentation sent through to you, so you are informed and up-to-date
  • Attend AGMs and any special meetings that are called
  • Vote for Committee members that are up to the task of managing your investment properly, without their own agendas
  • Ensure your committee are following the legal requirements
  • Find out if they have received professional input (not required, but beneficial for bigger OC’s)
  • Keep an eye open and report any maintenance issues you see or can foresee
  • Keep in mind that typically a plan should be reviewed formally every 5 years, after significant planned works, unexpected works or emergency use of funds, so check the date of your latest plan
  • Do you need help with checking or creating your Maintenance Plan? Do you have questions about what your plan covers in your State or Territory? Get in contact with one of our experienced Ace Body Corporate Managers who have all the information and detail ready at their fingertips to help you.


    Ace Body Corporate Management
    www.acebodycorp.com.au
    Disclaimer: This is not advice and should only be referred to for general information purposes. Strata management contracts often vary, so we recommend you contact your local Ace manager for more information, or seek expert legal advice. This article is not intended to be personal advice, and you should not rely on it as a substitute for any form of advice.Ace Body Corporate Management offers this newsletter to clients to assist in updating them on company and industry news. The content within this newsletter is of a generic nature and may not be applicable to all owners corporations. Ace Body Corporate Management attempts to provide the most up-to-date and accurate information for our clients. However, we strongly recommend that individuals and committees seek further advice before acting on any information in this newsletter.