Maintenance Plans Play a Significant Role in Strata Industry

Maintenance plans, also known as sinking funds, reserve funds, or fund forecasts, are crucial for effectively managing strata developments.

They serve as a financial blueprint for the upkeep and preservation of shared assets. Here's why they are essential:

Planning future expenses: Maintenance plans aid in forecasting future maintenance costs, reducing the need for unexpected special levies. They offer a comprehensive estimate of probable costs related to capital works within the strata scheme.
Compliance with Regulations: In many regions, having a maintenance plan is a legal requirement for strata schemes. However, maintaining an up-to-date maintenance plan is considered prudent governance regardless of legislation.
Preserving property value: Regular maintenance can prolong the lifespan of building elements.

Managing risks: Maintenance plans enable strata companies to manage repairs efficiently. They also play a crucial role in disaster risk management, especially given the increasing frequency and severity of extreme weather events due to climate change.

Ensuring financial security: An effectively implemented maintenance plan ensures the availability of contingency funds for unexpected emergency repairs. This is particularly important given the rising construction costs and their impact on the industry.

The regular review and execution of maintenance plans are crucial for the sustainability and resilience of strata developments. These plans ensure the property's physical upkeep and contribute to financial stability and regulatory compliance.
When investing in a strata scheme within an established development, it is vital to ensure sufficient funds cover foreseeable repairs and maintenance based on the building's age and condition. Without adequate funds, the strata may need to impose special levies to finance repairs or, worse, secure strata finance to complete the necessary work.

A well-managed maintenance plan can enhance the marketability of a strata property:

  • Attracting Potential Buyers: A well-maintained strata property conveys a sense of pride and care, drawing potential buyers and boosting marketability.
  • Avoiding Special Levies: Maintenance plans help prevent the need for potential future special levies, making the property more attractive to potential investors.

An inadequate maintenance plan can have severe consequences for a strata complex. It may result in the property appearing rundown due to a lack of funds to maintain its amenities. Moreover, it could necessitate raising additional funds from lot owners through a strata levy or even require securing strata finance if funds cannot be raised through a special levy.

Maintenance plans should be seen as more than just a box to tick; they should be a strategic instrument that boosts the marketability of strata properties, ensures financial stability, and encourages proactive maintenance for long-term benefits.

Nathan King
National Director – Advisory, State Director – WA Operations
— Perth Property Valuers
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