Your comprehensive Guide to 10-Year Maintenance Plans for Strata Companies in Western Australia

The introduction of compulsory 10-year maintenance plans for designated strata companies marks a significant change in strata property management in Western Australia. Stemming from the The Strata Titles Amendment Act which took effect on May 1, 2020, this requirement is designed to help strata companies strategically plan for long-term maintenance costs and manage property upkeep in a sustainable way. Below is a complete overview of 10-year maintenance plans, including their purpose, requirements, and benefits for strata-titled properties.

What Is a 10-Year Maintenance Plan?

A 10-year maintenance plan is a document that allows strata companies to budget and prepare for non-routine maintenance, repair, and renewal needs over a decade. It forecasts these expenses to ensure that strata companies have the necessary reserve funds, avoiding unexpected levies and financial strain on owners. For designated strata companies (defined as those with ten or more lots or a building replacement cost of over $5 million)  the plan is a mandatory requirement under the Strata Titles Amendment Act (Strata Titles Act 1985 WA).

Why Is a 10-Year Maintenance Plan Important?

The 10-year maintenance plan ensures that funds are available when significant repairs or replacements are needed, reducing the likelihood of large, unexpected special levies. According to Jake Kneebone, director and co-founder of Exclusive Strata Management (ESM) and a long-standing member of the Community Titles Advisory Committee, “The addition of a compulsory 10-year maintenance plan is a long-overdue initiative that will help strata companies stay on top of maintenance in a smart, proactive way.”

The primary benefits of a 10-year maintenance plan include:

• Financial Stability
  With a structured approach to maintenance, strata companies can plan reserve funds for non-recurring expenditures, minimizing unexpected costs.
• Efficient Use of Funds
  A maintenance plan ensures owners’ contributions are used effectively and mitigates the need for special levies.
• Sustainable Maintenance
  By setting clear expectations and timelines, the plan keeps the property in good condition, preserving its value over time.

What is a designated strata company

Designated strata companies are defined as those with ten or more lots or a building replacement cost of over $5 million. For designated strata companies, 10 year maintenance plans are a requirement, but it is advisable that any size strata company considers the long term maintenance costs of their building and have funds reserved.

What are the requirements stipulated in the Act?

The Act mandates that the 10-year maintenance plan must:

• Identify Common Property
  List all common property and personal property of the strata company anticipated to require maintenance, repair, renewal, or replacement (excluding routine maintenance) over the next decade.
• Assess Current Condition
  Provide a report on the current condition of these items to establish a baseline for future maintenance needs.
• Estimate Costs and Methods
  Include estimated costs and methods for performing the maintenance, repairs, renewal, or replacement of each item, specifying the appropriate trades or services required.
• Develop a Funding Plan
  Offer a plan or recommendations for funding these future expenses, guiding the establishment of reserve funds to facilitate non-recurrent expenditures in the budget.

Additionally, the Act requires that:

• Plan Submission
  The initial 10-year maintenance plan must be submitted for approval at the next Annual General Meeting (AGM) following its drafting and accepted via an ordinary resolution.
• Regular Revisions
  The maintenance plan must be revised at least once every five years, extending it to cover the subsequent 10 years, ensuring ongoing relevance and accuracy.

While the Act allows the plan to be completed by anyone, it is recommended that a qualified builder or specialist undertake this task to ensure a comprehensive and accurate assessment.

 

(excerpt from Strata Titles Amendment Act)

What’s Not Included in the Plan?

The plan does not cover routine maintenance activities or unforeseeable issues that are difficult to detect in advance, such as hidden plumbing or electrical problems.

Who Should Prepare the Plan?

While strata companies can develop their own 10-year maintenance plans, ESM strongly recommends enlisting a qualified builder or specialist to create a reliable and accurate report. A professional can provide a thorough assessment of common property, ensuring that the plan is comprehensive and realistic.

For non-designated strata companies, while the plan isn’t compulsory, implementing one remains a prudent option. Proactively preparing for future maintenance is beneficial, regardless of statutory requirements.

How to Keep Your 10-Year Maintenance Plan Current

Every five years, the 10-year maintenance plan must be reviewed and extended to cover the next decade. This rolling update allows strata companies to stay proactive about upcoming expenses, adapting the plan as the building ages or as unexpected needs arise. Importantly, councils have the flexibility to delay or omit items if necessary, allowing for tailored financial planning based on actual requirements.

Next Steps: Implementing a 10-Year Maintenance Plan

For strata companies needing assistance in setting up a 10-year maintenance plan, working with experienced strata management providers, like Exclusive Strata Management, can be invaluable. While ESM does not complete the plans, they can connect strata companies with qualified professionals and assist in identifying areas of common property that need attention.

You can also access additional resources and information on the ESM Knowledgebase or consult your Strata Manager for guidance on meeting the requirements of the Strata Titles Act.

Where to find more information

A 10-year maintenance plan is a proactive, long-term solution for managing strata property maintenance effectively. By outlining potential costs and timing, strata companies can avoid unexpected expenses, maintain property value, and ensure a well-funded approach to ongoing maintenance. Designated or not, every strata company should consider the benefits of implementing a 10-year maintenance plan to achieve financial stability and sustainable property management. Connect with a strata management expert to get started on your maintenance plan and set your property up for lasting success.

More information about these plans can be found on Lookup Strata. Your strata manager can also provide you with a sample 10 year maintenance plan for consideration.