WA: All About the 10 Year Maintenance Plan – What do we need?

This article is about changes to maintenance plans in WA and what you need to know. We have also produced a Free 10 Year Maintenance Plan Checklist to help make the process as simple as possible.

Table of Contents:

• QUESTION: Can the managing agents, building manager or strata committee request that the 10 year maintenance plan omit certain items such as lift replacement, painting or sprinkler system replacement? Including these items would, of course, increase the required levies.
• QUESTION: Our strata complex has 41 lots of low level units. Is it true that insurance companies will refuse to offer insurance for the complex unless the new 10 year plan is instituted by the council of owners?
• QUESTION: We are a self managed strata of 20 single storey units. Can the strata council develop and sign the maintenance plan? If so, what are the implications for the individual members of the Council?
• QUESTION: Do insurance companies want the Maintenance plans to be done by a professional?
• CHECKLIST: Free 10 Year Maintenance Plan Checklist
• ARTICLE: What, When, Where – Maintenance Plans

Question: Can the managing agents, building manager or strata committee request that the 10 year maintenance plan omit certain items such as lift replacement, painting or sprinkler system replacement? Including these items would, of course, increase the required levies.

Answer: The legislation basic states that if it’s a common property item, the Council of owners must ensure that it goes into the 10 year maintenance plan.

WA legislation is one of the most comprehensive lists I’ve seen a governing body put in legislation in terms of what must be included in a 10 year maintenance plan. There’s no provision that I’ve seen where you can, even by special resolution, opt out of having a particular item included. The legislation basic states that if it’s a common property item, the Council of owners must ensure that it goes into the 10 year maintenance plan.

If it was foreseeable that this item will either need replacement or maintenance, it needs to be included. By removing items such as painting, all you’re doing is delaying the funding of it, and unfortunately, whoever is left holding it gets a special levy for $200,000 in six or seven years time, and you still have to end up making up the same cost.

If you were to sell purposely to avoid that cost, you have failed your obligations and there would be a chance of recourse from the new owners stuck with the levy. We would certainly recommend against that.

Peter Berney
Solutions in Engineering
E: [email protected]
P: 1300 136 036

Dakota Panetta
Solutions in Engineering
E: [email protected]
P: 1300 136 036

This post appears in Strata News #557.

Question: Our strata complex has 41 lots of low level units. Is it true that insurance companies will refuse to offer insurance for the complex unless the new 10 year plan is instituted by the council of owners?

Answer: If your building has defects or other issues and there is a maintenance plan in place that may be a condition imposed by insurers

We are not aware of insurers imposing a requirement to complete a “10 year plan” in order to obtain insurance.

If your building has defects or other issues and there is a maintenance plan in place that may be a condition imposed by insurers.

If there are no building issues/defects and the policy does not require this, I would suggest asking the person who advised of this requirement to point to the specific policy terms and conditions that require this.

Tyrone Shandiman
Strata Insurance Solutions
E: [email protected]
P: 07 3899 5129

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.

This post appears in Strata News #504.

Question: We are a self managed strata of 20 single storey units. Can the strata council develop and sign the maintenance plan? If so, what are the implications for the individual members of the Council?

Answer: Using a building consultancy or professional company that prepares property asset long term maintenance is important

For the 1985 Strata Titles Act Western Australia (STA) requirements, refer to the Act or otherwise a lawyer or strata consultant to determine regarding documenting your own maintenance plan and the requirements of this.

In my opinion, using a building consultancy or professional company that prepares property asset long term maintenance is important, as 10 year planning involves building conditions reporting and the long term care of the property based on building codes and standards and forecasting the maintenance plan of all aspects of the property. Getting it wrong may have ramifications for all those involved including the Owners who are relying on this for the long term maintenance care of the property.

Leonie Milonas
PSC Property Lync Insurance Brokers
E: [email protected]
P: 1300 127 503

This post appears in the May 2021 edition of The WA Strata Magazine.

Question: Do insurance companies want the Maintenance plans to be done by a professional?

Answer: Insurers ask many questions before providing quotations

I am unable to answer what the insurers will ask for in the future. Presently, however, insurers ask many questions before providing quotations and forthcoming renewal terms so they are satisfied issuing terms. Such questions include asking if the strata is aware of any known maintenance defects or new building defects, cladding and so forth.

From a maintenance point of view, the condition reporting section of the 10 year plan is important as this highlights any aspects of the building that may need immediate attention. Depending on what that is, it may be something you need to disclose to your insurer to ensure your cover is not limited or reduced, which could result if you did not disclose it to them.

Leonie Milonas
PSC Property Lync Insurance Brokers
E: [email protected]
P: 1300 127 503

This post appears in the May 2021 edition of The WA Strata Magazine.

CHECKLIST: Free 10 Year Maintenance Plan Checklist

We have developed a free 10 year maintenance plan checklist to assist WA starts schemes and help make the process as simple as possible.

You can download your free copy of the checklist here: 10 Year Maintenance Plan Checklist.

ARTICLE: What, When, Where – Maintenance Plans

All strata schemes require maintenance at some stage or another. No matter if your strata scheme is a single level 2 to 9 Lot scheme or a multi level high rise building.

The requirement for maintenance can be found in Part 8 of the new Strata Titles Act.

Administrative Fund and Reserve Fund

The money available for maintenance is derived from either the Administrative Fund or the Reserve Fund sec. 100.

The strata company Must have an Administration Fund sec. 100 (1).

The requirement for the Reserve Fund sec. 100 (2) carries a specific qualification:

“The strata company must, if it is a designated strata company and may, in any other case –

1. establish a reserve fund”

What are the key points of this section?

• The words May and Must have both been used:
  • The word “May” being the prerogative (is an option)
  • The word “Must” being the imperative (is not optional)

The is another specified phrase – “Designated Strata Company”

The definition of this phrase appears at the end in sec.100(7):

“Designated strata company” means –

1. a strata company for a scheme with 10 or more Lots: or
2. a strata company included in this definition by the regulations”.

To recap: If you are a 2 to 9 Lot strata scheme, you don’t have to have a maintenance plan although it would be a good idea to have one. With the following exception:

Your strata scheme may be included as a “designated strata company if:

• STGR Reg 78(1) Designated Strata Company – extended meaning
  1. a strata company for a strata scheme that has a scheme building replacement cost of more than $5,000 000;
  2. a strata company for a survey-strata scheme if the replacement cost of the improvements on the common property is more than $5,000 000.

The 10 year Plan

STGR Reg 76 sets out the “Requirement to have a 10 year plan”.

The 10 year plan and the details required are extensively specified in Reg 76(2) which lists the “covered items” and the “condition report”.

The items specified in the “condition report” are:

• (e) a list of items of common property, and personal property of the strata company, that the strata company anticipates will require maintenance, repair, renewal or replacement (other than of a routine nature) in the period covered by the plan (the covered items).

A complete reading of this regulation would be required to fully comprehend the extensiveness of this report.

The 10 year plan must be revised at least once in each 5 years and the revised plan is extended to cover the following 10 years.

It is up to the strata company to adequately budget and set aside the required funds as it thinks are necessary to achieve maintain the building in accordance with the 10 year plan.

Shane White
Strata Title Consult
E: [email protected]

This post appears in Strata News #308.

Please note: this article was provided prior to the proclamation of the new strata title amendments.

Have a question about the Maintenance Plans or the 10 year plan or something to add to the article? Leave a comment below.

Embed

Disclaimer: this article should not be relied on as legal advice.

Read next:

• WA: Reforms to WA Strata Legislation – As a Lot Owner, Should I Care?
• WA: Maintenance Planning and Insurance: The Strata Titles Amendment Act 2018 (STAA 2018)

1 May 2020 Update:
The amended Strata Titles Act 1985 took effect in Western Australia on 1 May 2020. It includes grace periods for some new requirements to ensure those affected have adequate time to meet them. This information has been taken from Landgate: Timelines for Change.

Improving strata management and by-laws: Introduction of 10-year maintenance plan and reserve fund.

Visit Strata Law Reform, Maintenance and Common Property OR Strata Information WA pages.

After a free PDF of this article Log into your existing LookUpStrata Account to download the printable file. Not a member? Simple – join for free on our Registration page.