These Q&As from WA Lot Owners are about obtaining an inventory of assets on common property.
Table of Contents:
- QUESTION: Is the Asset and repair list going to be separated from the overall Maintenance Plan?
- QUESTION: When the 10 year maintenance plan is being made, is it necessary to make an inventory of all assets?
- QUESTION: I am the only person on our Council of Owners who is aware of the legislative changes and requirement for a 10-year maintenance plan. Our Strata Manager has brushed me off. Where does this leave us?
- QUESTION: The Caretaker at our strata scheme will not supply us with an inventory of assets on the common property. Can we force him to do so under the new WA Reforms?
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Question: Is the Asset and repair list going to be separated from the overall Maintenance Plan?
An asset Register is much more detailed than the 10-year maintenance plan. I am concerned this is likely to impact on the value of an owner’s asset. Is the Asset and repair list going to be separated from the overall Maintenance Plan?
Answer: No, I don’t see any benefit in separating them.
My answer would be no, we put them all together.
Different contractors handle this in different ways. We always put them together, so the report is broken up. The asset register is really important as it includes the condition and whatever repair works are required. Plus there’s the end of life, so when it needs to be replaced.
I don’t see any benefit in separating them. If anything, to me it makes sense to have them all together.
I have had people asked ‘do we want to show people what we need to spend?’ as in they are trying to hide it, and I wouldn’t recommend that. I don’t think that’s a very good way forward. People have asked me not to include reports on the condition of the roof and those types of things because they know they need to be spent. I have a duty of care when I’m engaged to do something, so I need to do it to the best of my ability.
This all should be included. The more information the better, and you really can’t put a plan together if you don’t have that asset register. You need that asset register to understand what it is that needs to be maintained.
David Chokolich
HFM Asset Management
E: [email protected]
P: 1300 021 420
This post appears in Strata News #419.
Question: When the 10 year maintenance plan is being made, is it necessary to make an inventory of all assets?
When the 10 year maintenance plan is being made, is it necessary to make an inventory of all assets? If so, does this inventory need to be made by another party separate to the one making the 10 year maintenance plan?
Answer: No, not necessarily.
No, not necessarily. We create them ourselves. If the Council of owners have an older version or anything we would happily take that, as it does assist.
What you’ll tend to find is that the newer schemes that are multi storey have lifts, pools, common areas, gyms and those sorts of things will have a lot more common services and car park ventilation, etc. So the more complex the service, generally, they’ll be documented so there should be operating and maintenance manuals that were given at the time of completion.
Anything that you can do to help the person writing the maintenance plan will be greatly appreciated and will just make it that much more accurate. So typically, if we were going to a larger site, we would get the contact details for all of the maintenance contractors and we would ask them what asset registers they have and then build off them and build a final one.
David Chokolich
HFM Asset Management
P: 1300 021 420
E: [email protected]
This post appears in the October 2020 edition of The WA Strata Magazine.
Question: I am the only person on our Council of Owners who is aware of the legislative changes and requirement for a 10-year maintenance plan. Our Strata Manager has brushed me off. Where does this leave us?
I recently bought into a strata of 12 units. We don’t have a 10-year maintenance plan.
At our AGM, I joined the Council of Owners and I was the only person aware of the legislative change.
Our strata manager brushed my question off by saying our complex is in a good position because owners have maintained everything well and nothing major is coming up.
I reiterated we still need a 10-year maintenance plan. The strata manager got the usual contractor to come and do an annual inspection and maintenance after, but no 10-year plan.
Where does this leave us?
Answer: Problems will occur if someone comes to buy in the strata scheme and asks ‘why is there not a maintenance plan?
It seems that most of the problems happen when people can’t communicate and can’t get along.
Generally, the issue will occur if someone (a savvy buyer) comes to buy in the strata scheme and asks ‘why is there not a maintenance plan? Where is your maintenance plan?’ That’s when I think that there will be problems.
At the moment, it’s probably not going to be an issue. I haven’t heard of anyone getting fined if they don’t have a plan. But if you manage these things, you can actually increase the value. So there’d be no reason not to put a plan together.
They could quite easily highlight all of the 33 items, put a condition rating against them if they think they’re all good, and they don’t need to spend any money over the next 10 years. You could do that easily on a spreadsheet. And as long as that person, whoever it might be whether it’s the chairman or whoever wants to sign off on it, wants to accept that as their maintenance plan, then they can do that.
I think there’s also a requirement from the real estate agents to be able to obtain this information. So there probably won’t be anything that triggers it now but how do you tell people that they need to do things because it’s best practice.
David Chokolich
HFM Asset Management
E: [email protected]
P: 1300 021 420
This post appears in Strata News #409.
Question: The Caretaker at our strata scheme will not supply us with an inventory of assets on the common property. Can we force him to do so under the new WA Reforms?
Answer: Common property, the maintenance, management, and control are the responsibility of the strata company.
Please note: this response was provided prior to the proclamation of the new strata title amendments.
Interesting question with a couple of scenarios. You have mentioned common property under the current Strata Titles Act and this will not change under the reforms. Common property, the maintenance, management, and control are the responsibility of the strata company.
There are a couple of scenarios:
- who owns the assets on the common property? Are they owned by the strata company, therefore common property
- or are they under the control/owned by the Manager/Caretaker or a third party.
I believe the second option would be unlikely and will write this response based on them being assets on the common property and owned by the strata company.
On that basis the manager/caretaker has no option but to supply the strata company via the Council of Owners with the appropriate inventory, bear in mind there may be tax implication as well particularly if the strata must submit tax returns.
If the manager/caretaker is not doing the job he or she was employed to do, a breach notice should be issued detailing the breach and asking for the immediate rectification.
The manager/caretaker is engaged by the strata company, is answerable to the strata company and with the reforms that position is clearly laid out. If the manager/caretaker does not comply, their contract can be terminated, or you could refer the matter to the State Administrative Tribunal (SAT). Under the reforms the SAT has a greater role, it will be a one stop shop for all issues (except debt recovery) under the strata titles act.
The reforms will take effect from the 1 May 2020.
In summing up, check the asset ownership, check the contract of your manager/caretaker, talk to the council of owners and take the appropriate action.
Concerning managers going forward from the 1 May they must comply with the requirements under the act and they will have 6 months to ensure that they conform.
Brian Rulyancich
StrataTAC
T: 0428 970 067
E: [email protected]
This post appears in Strata News #343.
Have a question or something to add to the article? Leave a comment below.
Read next:
- WA: What, When, Where – Maintenance Plans
- WA: Reforms to WA Strata Legislation – As a Lot Owner, Should I Care?
- WA: Top 9 Tips for Gaining Control Over Your Maintenance Budget
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I am in Victoria and hon. Sec. to an owners corp. with 15 ground floor units.
Correct ,me if I’m wrong but I understand that a 10 year maintenance plan is not mandatory unless the complex has more than 100 units or annual fees over $200,000,.
It is then called a prescribed Owners Corporation.
Hi Terence
I have responded to your question on this article: VIC: Q&A Setting Up a Maintenance Plan and Deciding on a Budget
Common property assets are owned by the strata company (owners as a whole).
In general, as an Owner, you probably had a depreciation schedule prepared at the time of purchase which will contain many (if not all) of the assets to be included.
The role of a caretaker can vary a great deal from basic cleaning of common areas to management of waste, reading of meters, maintenance of building gates, lights, gardens and all associated equipment, reporting on activities, etc. so it is sensible to be very clear on what that role comprises via a written contract which includes a list of duties.
For example, if responsible for changing ordinary lights, the caretaker may have a store of globes. However, if responsible for mowing, the ownership of the equipment may or may not be the property of the strata company.
Hi eM
The following response has been provided by Brian Rulyancich, Stratatac:
I agree with the comments and as I previously mentioned – the content of the contracts is essential.
You mention depreciation schedules. In my experience as a former strata manager these, unfortunately, were few and far between.
The difficulty with a lot of strata companies is that they were set up with little or no assistance, they were initially self-managed and ran the basic accounting system as mainly a cashflow spreadsheet.
That said, going forward post 1st May when the reforms take effect all strata companies must keep proper accounting records, including records of assets and liabilities. So, therefore, depreciation schedules will become an essential component, particularly if tax returns are required.