The purpose of an owners corporation maintenance plan is to outline the regular upkeep and repair needs of a building or property managed by the owners corporation. It helps to ensure the longevity and functionality of the assets and prevent or minimize costly repairs or replacements in the future. The maintenance plan covers major capital items for repair and replacement over the next 10+ years, outlines their present condition, and provides an estimated cost and timeline for repair and replacement. By having a maintenance plan, the owners corporation can properly allocate resources and responsibilities to maintain the property, retain its value, and make it more enjoyable to live in.
Having a Long-Term Maintenance Plan is a necessary part of an Owners Corporation to account for both planned and unexpected repairs and maintenance of its common property. Under the Owners Corporation Act 2006 (Incorporating amendments as at 1st December 2021) it is a legislative requirement that all Tier 1 & 2 (51 Habitable Lots or More) buildings prepare a Long Term Maintenance Plan, however all multi-unit developments will benefit from developing effective budgets for ongoing repairs and maintenance to keep the property in a good state of repair and avoid substantial special levies.
All owners corporations, committees and delegates must exercise duty of care and diligence in carrying out functions and owners, including maintenance and repairs.
A Maintenance Plan is created for the Owners Corporation to budget and save for maintenance over a period of time, rather than bulk levies on a reactive basis. Maintenance Plan contributions provide a progressive growth funding system that are designed to ensure reasonable collection of funds in order to maintain the property in a good state of repair. This will ensure that all owners contribute fairly to the replacement and maintenance costs of assets over the effective life cycles.
Consumer Affairs Victoria recommends that all owners corporations have a maintenance plan, but only some owners corporations are required to have one by law.
Tier 1 & 2 (51 occupied lots or more) owners corporations must have a maintenance fund.
Tier 3, 4 & 5 (less than 50 lots) owners corporations are not required to have a maintenance plan, but may choose to do so.
Mabi Services will conduct a full site inspection, including liaising with owner’s to prepare a long-term maintenance plan and budget for your building that will fully comply with the Owners Corporation Act 2006 and Amendments Act 2021.
The report includes:
- A Long Term Maintenance Plan Budget compliant to Part 3 – Division 3 Owners Corporations Act 2006;
- A list of major capital items for repair and replacement over the next 10 years
- The present condition of those items
- When the items or components will need to be repaired or replaced
- The estimated cost of the repair and replacement of those items
- The expected life of those items or components once repaired or replaced
- A budget table listing recommended anticipated accrual of levies against the anticipated expenses for the next 10 or 15 years
- A first-year lot liability breakdown for the accrual of levies, as per the registered Plan of Subdivision
- A summary report for the Owners
A successful budget will have a progressive growth, ensure adequate funds are collected for the initial, short term and long-term future repairs and replacements, with a steady increase in the annual budget contributions to allow owners to know what they are up for a on a yearly basis.
We recommend that a re-inspection and review of the budget is undertaken every 3-5 years in order to assess the actual expenditure against predicted maintenance plan to ensure that adequate contributions are maintained and update the plan.
- Helps avoid large special levies
- Ensures a user pays / fair system of funding common property works
- Adds value to your investment
- Maintains the common property proactively NOT reactively
- Allows for easier decision making when undertaking works
- Is a base line of expected life cycles and estimated costs
- Is not a detail costing / quotation for each item assessed.
- Is not a detailed Building Defect or Condition Report
- Is not a fixed maintenance schedule
Often Maintenance Plans are required at least 14 days before the Annual General Meeting (AGM) so that the proposed budgets can be discussed and approved. A good maintenance plan should be developed in advance and allow adequate time for committee discussions and revisions prior to the AGM agenda being sent out.
Tier 1 and Tier 2 owners corporations are required to prepare and approve a maintenance plan under 19 Section 36 of the Owners Corporations and other Acts Amendment Act 2021. Tier 3 through to Tier 5 owner corporations can choose whether to prepare a maintenance plan. A maintenance plan, on the other hand, is beneficial to all owners corporations because it provides a roadmap for regular upkeep and repair of the building or property. It contributes to the assets’ longevity and functionality, as well as preventing or minimising future costly repairs or replacements and retaining the property’s value.
A maintenance plan for an owners corporation in Victoria, Australia is expected to include the following elements:
- An assessment of the current condition of the common property, facilities and assets.
- A description of the maintenance / works that is required to keep the common property in good condition.
- A prioritization of the work, based on its urgency and importance.
- A schedule for the completion of the work, taking into account factors such as available resources and funding.
- An estimation of the costs associated with each item of work.
- A plan for how the costs will be funded, including the contributions that will be required from the owners.
- Details on how the plan will be implemented and reviewed, including a schedule for regular inspections and maintenance work.
- An explanation of the roles and responsibilities of the owners corporation, individual owners, and other relevant parties.
The maintenance plan should be comprehensive, practical, and realistic, taking into account the current and future needs of the owners corporation and its members.
A maintenance plan for an owners corporation should be re-inspected every 3-5 years unless required more frequently, while the financial aspect should be reviewed annually.
The re-inspection / review process is an opportunity for the owners corporation to assess the condition of the common property, facilities, and assets, to identify any new maintenance or repair needs, and to update the plan to reflect the current and future needs of the owners corporation.
It is important to note that while the plan must be reviewed every 10 years, the owners corporation should also review the plan on an ongoing basis, as needed, to ensure that it remains relevant and up-to-date. This may involve making changes to the plan to reflect the results of inspections or other assessments, or to take into account changes in circumstances or the needs of the owners corporation.
The Owners Corporations and Other Acts Amendments Act 2021 in Victoria, Australia introduced changes to the way owners’ corporations operate. One of the changes introduced affects the requirement for a maintenance plan. Tiers 1 and 2 owners’ corporations must now prepare and approve a maintenance plan, with Tier 1 having 12 months and Tier 2 having 24 months to do so. Tiers 3 to Tier 5 can opt to have a maintenance plan, but it is not mandatory. The maintenance plans can be amended by the owners’ corporation by an ordinary resolution.
Mabi Services provides a maintenance plan and budget that provide additional value to the owners corporation including:
Comprehensive Assessment: Mabi Services provides a thorough and detailed assessment of the current condition of the common property, facilities, and assets, and takes into account the future needs of the owners corporation, can provide a more complete and accurate maintenance plan.
Expertise: the team at Mabi Services has a deep understanding of the relevant regulations and building codes, and has experience in developing and implementing maintenance plans, can provide the owners corporation with valuable insights and guidance.
Customized Solutions: Mabi Services takes the time to understand the specific needs and priorities of the owners corporation and provides customized solutions that take into account their budget and available resources, can provide a more effective and efficient maintenance plan.
Ongoing Support: Mabi Services offers ongoing support and assistance, guidance, updates / revisions to the maintenance plan, and help with implementation, can provide the owners corporation with peace of mind and a more sustainable maintenance plan over time.
Transparent Communication: Mabi Services provides clear and transparent communication throughout the process, including regular updates and clear explanations of costs and funding options, can help to build trust and ensure that the owners corporation feels informed and involved.
By offering these services, Mabi can differentiate itself from its competitors and provide the owners corporation with a comprehensive, effective, and sustainable maintenance plan that meets your specific needs and requirements.