With the Unit Titles Act 2010 (UTA), bodies corporate were required to implement a long term maintenance plan. By special resolution, a body corporate could opt out of having a long term maintenance fund.
Most bodies corporate have plans. Not so many have funds (or sufficient funds) to cover all the needs of their buildings. More often than not, these are decisions made at an annual meeting and levies set based on looking one year ahead at a time. The long term maintenance plan looks at the needs for at least 10 years.
The long term maintenance plan needs to be reviewed every 3 years. For most bodies corporate that review will be required sometime this year or next year. When undertaking that review bodies corporate should give careful thought to funding their plans.
When units are being bought and sold, the long term maintenance plan and funds held are critical pieces of information. Two units which might seem the same are a quite different investment proposition if one body corporate is holding funds and another is not. A long term maintenance plan which shows significant maintenance needs in the near future would be viewed with caution by an incoming buyer. This will become more and more important as our unit title market becomes more knowledgeable and sophisticated.
The needs of a body corporate do differ. Smaller bodies corporate might consider it is reasonable not to have a fund, as the common property is just a driveway. But in making this decision repairs to the driveway are incurred by the owners at the time, rather than being spread over time across the owners who are actually making use of that driveway. For larger apartment blocks, there are significant responsibilities on the bodies corporate with respect to repairs and maintenance. Because the body corporate is responsible for the common property and also for building elements and infrastructure that are shared amongst owners, these might be more than are appreciated by most owners – e.g. fire sprinkler heads need replacing every so many years, lift replacement needs to be considered, treads on the fire exit stairs, painting, window seals etc.
Typically the responsibily for managing repairs and maintenance is delegated to the body corporate committee. I would encourage the committee to approach this as would the owner of a commercial property – look at e.g. planned and unplanned maintenance needs, how they will be funded and take a long term view in order to protect the value in the building.