Long term maintenance plans
This morning seven team members from Strata Management SA attended a Strata Community Association training session run by the knowledgeable Wal Dobrow of BIV Reports aimed at ensuring that the staff members talking to our valued clients have the weapons in their armoury to assist unit owners with their property.
We all understand the importance of maintenance but often it can be a challenge speaking with a diverse group of unit owners about their personal financial positions and how best to maintain their communal asset.
One of the ways of making asset maintenance less of a personal or emotional discussion with unit owners can be to consider obtaining a report from a qualified professional which breaks down the major maintenance expenditures that are anticipated over the next decade into a plan with which to save the funds over the journey.
A highlight of this session for me was Wal talking about the money we pay for servicing and tyres on our car, a depreciable asset that we generally plan ahead for while understanding the lifespan of differing vehicle components and yet often we take a different approach to our homes as generally our most significant asset and one that is generally appreciating.
When we live in a single dwelling property no one else needs to know or think about what is required but having recently settled on a home for my family I have been hit with larger than anticipated bills when having to upgrade the meter box for solar panel installation, tree removal requiring more effort and expense than initially expected and then the neighbour started a dialogue on boundary fence replacement and installation of a retaining wall while my early efforts have been on stripping cracked paint off of the timber windows in order to repaint and protect those (which is far cheaper than replacing them).
While the budgeting for the above and the keeping of reserve funds for when items fail is my problem, just as it is for the owner of any Torrens Title property, when we move into the strata scenario the communal assets such as buildings, roofing, driveways, grounds, fencing etc must be budgeted for by the corporation as a whole.
Given that the unit owners are the corporation and are in essence the funding source for the corporation I must say that by failing to plan for future maintenance requirements that we are setting ourselves up for future failure.
Over the years I have heard many responses to why owners could not maintain their assets from I can’t afford it to I’ll sell in the next couple of years or I won’t be alive when those works take place.
Leaving the morbid response aside for the moment, all owners have a duty to maintain the common property and the easy response to the objections are that a well maintained and funded property is of greater value than one which is run down which is of benefit to all.
Another point worth considering (if a little blunt) is that if an owner cannot afford to make a quarterly budgeted contribution toward future repairs then they are highly likely to struggle to meet an unbudgeted or unexpected special levy raised when works must be done without the funds in place.
One of our managers is currently working with an older apartment style corporation that has been dealing with significant fire upgrades required by their council and had a multiple year plan in place with owners to get the funds into the account to carry out this work in stages.
While dealing with these works the owners have noted that sections of the roofing are approaching a failure state and the lift is in desperate need of refurbishment.
If owners had considered the finite lifespan of the assets involved with their property and had started saving in previous years then the leap in contributions would have been far lower than it ended up being for these owners.
In attendance this morning for Strata Management SA were our strata community managers Lei Brown, Mark Grffiths, David Jolly, Francesca Nuzzo and Sam Pinnington, in addition to our directors Michael Haines and Paul Stephenson.
Speaking with our team members following this training event, they took onboard points of helping owners to make their decisions on what they are trying to achieve with the maintenance of their property, prioritizing works, considering the lifespan of building assets and that the plan is a savings plan, not a spending plan with a common theme noted around prioritizing the works and gaining clear instructions in order to achieve the outcomes desired by the unit owners.
In our role as body corporate managers, we assist and advise owners in preparing budgets but we recommend 10 year maintenance plans, reserve fund plans or sinking fund forecasts in order to more accurately attune owners as the decision makers in order to avoid surprises and ensure that the property as a significant asset is well maintained for the future.
While the obtaining of such a plan is authorized by a corporation via a meeting, we would be happy to talk with you about this should you have any questions please feel free to contact our office and speak with your strata community manager.
