While not a requirement in all owners corporations, maintenance plans play an important part in the scheduling and budgeting for the upkeep of the building and common property.
If you own a lot in a property that is a ‘prescribed’ owners corporation (ie over 100 lots or $200,000 in annual income) you will be familiar with the concept of a maintenance plan, as it is a legislative requirement for your owners corporation. However if you own in a property that does not meet those thresholds, you may not yet have had any exposure to these plans. So let’s take a quick look at what they are, what they do, and why they can be so useful.
What is a maintenance plan?
A maintenance plan is a report prepared by a professional quantity surveyor to best forecast the maintenance needs for a property over the next ten to fifteen years. It will include information as to the expected lifespan of all equipment and materials and the expected cost of repairs or replacement. The plan should also take into consideration inflation over the coming years.
Once the maintenance plan has projected the amount an owners corporation needs to spend each year over the next ten to fifteen years, the quantity surveyor will then also assess how much income will be required to cover those costs. This will then dictate the levies that your owners corporation needs to raise for its maintenance fund.
What if I don’t have a maintenance plan?
If you own in a non-prescribed owners corporation, there is no requirement to have a maintenance plan or maintenance fund. While this might sound like less of a burden to some, keep in mind that the maintenance and associated costs will still be required at some point, it’s just that you don’t have a report to guide you as to when this might be and how much money you as owners might need to put aside to cover this cost.
A maintenance plan, even where not required, can save lot owners the unpleasant and inconvenient surprise of a sudden special levy to fund a new roof, or a new hot water system, driveway, gutters or any number of maintenance works that your property may need.
What can you do?
The Victorian Owners Corporation Act is quite clear that any money spent from a maintenance fund must be aligned with the projection in the approved maintenance plan. For this reason, it is essential that maintenance plans should be well prepared and as thorough as possible. While no maintenance plan that I have seen is ever 100% accurate (after all, who can dictate for ten years into the future the exact timing that services will break down!) the more time and property-specific expertise that is involved in preparing the report, the more relevant and helpful they can be.
If your owners corporation is about to have a new maintenance plan prepared ensure that, if at all possible, someone who is very familiar with your property is available to meet with the quantity surveyor when they come to site to inspect. Knowledge regarding when certain items were replaced, ongoing issues with some equipment, or the location of some out-of-sight items can be invaluable in ensuring the needs of the property are captured as best as possible.
If you already have a maintenance plan, take some time to review it to assess how relevant it might be; ask your Committee if anyone met with the quantity surveyor when it was prepared; and consider if there is anything missing that might have been overlooked.
If you don’t yet have a maintenance plan, raise the topic with your committee for discussion: would it be helpful for your owners corporation community? Your suggestion for better planning and budgeting might be just the thing your owners corporation needs!