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Moving forward with Maintenance Plans

All too often when undertaking site inspections, we leave the site with the impression that the Owners Corporation is not adequately maintaining their investment which is, more often than not, due to a funding issue. This will likely affect the sale value of the lots and increase the risk of large special levies when the works can no longer be ignored.

Why is this?
The main reason is simply, in many instances, having the owners invest their money into an account they don’t control, and when it’s not mandatory for the owners to invest their funds over time, it can be like getting blood out of a stone. The result being that property maintenance decisions are made reactively rather than proactively.
 
New legislation only requires 51 lots or more to approve a maintenance plan, which is a positive step forward for the industry, however many properties less than 51 lots still require funding for major works such as passenger lifts, roof replacement, external painting and other plant and equipment.
 
Encourage Owners to take action
We advise all Owners Corporations to take action, be aware of their buildings and specific needs, and develop a maintenance plan or ensure some form of funding is in place regardless of the number of lots of their building/s. We encourage the following:

  • Owners to have a maintenance inspection undertaken.
  • To identify the known and potentially unknown cost cycles (the earlier the better).
  • The committee to have a “Maintenance Plan Review Meeting.”
  • The committee should ask questions and understand the plan.
  • Don’t set and forget and be proactive.
  • Review the plan and budget at least every 3-5 years.
 
Explain the benefits to the Owners
  • Long term needs of building assessed and funded.
  • Potential problems may be identified when plan is being prepared or reviewed.
  • Allows works to be undertaken when needed and as funds are available.
  • Promotes a view of a well-maintained building and prudent Owners Corporation.
  • A fairer system of funding for all stakeholders.
  • Special levy is typically not required.
  • Financial certainty for all owners.
  • Add value to their investment.
  • Promotes saleable units and liveable Owners Corporations.
 
Case Study
In late 2019 Mabi was engaged to work with an Owners Corporation committee to inspect the property for defects and establish a long-term maintenance plan. What we discovered was a perfect example of the importance of proactive maintenance and establishing a fund as early on as possible, regardless of the size or number of lots.
 
The development in question consisted of 35 lots, as such did not require a maintenance plan under the previous legislation, nor does it require one under the newly adopted legislation as of 1st December 2021.
 
The development was 45 years old and had common property infrastructure such as a passenger lift, four separate metal roofs, timber balustrades to balconies and common walkways and a known issue with subsidence to the under-croft car park.
 
Upon completion of the defect survey the following was determined:
  • The passenger lift required immediate overhaul and was unsafe
  • Structural engineer advice determined the brick ties had corroded and parts of the brick fa├žade required re-building
  • Concrete spalling to the cantilevered concrete balconies was significant
  • Three of the four roofs require replacement within 5 years
  • A number of timber balustrades had completely rotted, and the steel supports were corroded
  • One balustrade had recently fallen out of the building leaving a tenant with a balcony with no fall protection
  • Timber windows were also rotted and had not been painted
  • Geotechnical engineer had determined a serious subsidence issue within the under croft.

Without allowing for all other required maintenance (such as internal hallway painting and carpet replacement, essential safety measures, mechanical, CCTV and other normal maintenance costs cycles), the total for the urgent works exceeded $1.4 million required within the next 5 years. The average cost per unit for the next 5 years exceeded $10,000.
 
This is a perfect example of why an Owners Corporation must consider the specifics of their building/s and not just the number of lots. The Owners Corporation had zero funds set aside for maintenance and no formal or informal plan. The owners were reluctant to have the works carried out as they had no money, and no decisions were ever made until it was too late.
 
Whilst this case study is a ‘horror story’ it does illustrate that nothing lasts forever, and a more pragmatic approach must be taken when maintaining common property and how it is funded.
Not all Owners Corporations will require substantial repairs as per this example, however many lot owners will be dealt a blow when they realised the sums of money they are required to individually contribute often coupled with the fact that they are effectively recouping funds that should have been contributed from day one and potentially from past owners. 
 
The earlier a maintenance plan budget is set up, the easier the process and the fairer the financial requirements are for all stake holders over the long term.
 
Kingsley Osmond
Director
Mabi Services
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Example of concrete spalling to concrete ceiling with no action taken by Owners Corporation for 15 plus years


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Example of timber fascia that has rotted past the point of repair
 

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QA Roofing Repair And Maintenance

Question: Irregular gutter cleaning has resulted in roof leaks and damage to my walls and ceiling. Who is responsible to carry out regular maintenance such as gutter cleaning?

 

My roof has been leaking ever since I moved in. This has caused damage to my walls and carpets. I clean the gutters that I can reach myself regularly, however, there are gutters that I cannot reach that have never been cleaned the entire time I have lived here and I believe this is causing the roof leak issue.

I have emailed my Strata manager many times about this and after many many months she replied with "I suggest you ask a roof plumber to inspect the leak, then look at roof replacement".

I have since looked back through the strata records and found that professional gutter cleaning has been included on every AGM agenda, however, the issue has never been discussed at any meetings.

Who is responsible for roof inspections, gutter cleaning, etc to rectify the problem?
 

Answer: If the plan of subdivision states that the Roofing Areas are part of the common property, the Owners Corporation is responsible.

 

Your plan of subdivision will determine whether the Owners Corporation is responsible to pay for the roof, gutter cleaning and related works (Roofing Areas). If the plan of subdivision states that the Roofing Areas are part of the common property, the Owners Corporation is responsible to pay. On the other hand, if the plan of subdivision provides that the Roofing Areas are private property, the owners are responsible for the works.

Alternatively, if the owners corporation passed a special resolution to provide a service of Roof Areas cleaning (if these areas are private property) the owners corporation is responsible to pay for the works.
 

Rochelle Castro
RC & Co Lawyers

 

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Roofing Repair and maintenance


17 Jan 2023

On taking over the management of this property, it became obvious that the roof had not been maintained or repaired for many years, which had resulted in ongoing and constant leaks into individual units.
 
A roof report was obtained, with the result being that the entire roof required replacement. Several quotes were obtained for the work, however as the property was heritage listed, council approval regarding the project was required, including the type of tiles used, which impacted the project.
 
Due to the nature of the repairs, the cost was substantial, however the contractor agreed to lock in the price for twelve months.  Several meetings were held to choose a quote and to formulate a payment plan which provided owners some flexibility in payment of the special levy.  There were a number of options provided, enabling the owners to select which option worked best for them and suited their financial situation.
 
Although there were a couple of hiccups along the way, with good communication and collaboration between all parties, these were easily resolved, and owners are delighted with the end result.
 
Maintaining open and transparent communication and collaboration between all parties only serves to produce excellent outcomes when managing such projects.

 

Sean Ewinger
OC Manager MBCM Strata Specialists Hawthorn