What should be in your LTMP?
This subject appears to be one of the most confusing and where we get the widest range of opinions. It’s also impossible to discuss this without covering the other big question “who pays?”
In fact the whole subject of maintenance is one of the essential elements of body corporate governance and can’t be explained in a couple of paragraphs, so this won’t be a short read.
But hang in there and hopefully it will become clear by the end.
The three big maintenance questions
Because the legislation is a bit scrambled, I have developed my own summary of the rules regarding maintenance. I'm not saying that they will pass a legal test but they help me keep it simple and clear. They are,
What should be in the LTMP? Answer: Everything.
Who manages maintenance?: Answer: When the repair affects more than one unit, the body corporate must manage the maintenance.
Who pays? Answer: When all owners don’t get an equal benefit from the repair, unit owners pay in proportion to the benefit they receive.
There are a few variables to this trifecta but it has helped me remain clear (and sane) when interpreting each case.
There is a caveat however. When there is the slightest doubt, put a statement in your plan that makes it clear. More on that later.
Now let’s pose that question again
So let’s ask that question again. What should be in our LTMP? That’s actually too broad and needs rephrasing and several questions could be asked. Such as,
“What bits of the building should be listed in your LTMP?”
“Should we only list things the body corporate has to pay for?”
“Should our plan only include major items leaving all routine maintenance for the operating account?”
In this paper we’ll answer all of those above.
But we’re also working on another paper called "The seven things that should be in your LTMP" and this will cover things like the name of the person who edited the plan and whether or not you have opted-out of having a Long-Term Maintenance Fund. We'll publish this soon.
So “What should be in the LTMP?”
And the answer is: Everything.
That’s what the legislation says anyway. But it also make sense.
What the legislation says
Section 30 of the Regulations says “A Long-Term Maintenance Plan must cover all Common Property, Building Elements and Infrastructure in the Unit Title Development”.
“All” means everything. Right? Including things that owners might be required to pay for. Like garage doors. Unless someone has a different definition for “all”. It doesn’t say just include stuff the body corporate has to pay for. Or only include big things.
And the word “cover”? Well that’s pretty clear to. It means that it has to be included. So along with everything else, as an example, you should include a description and condition assessment of all windows, doors and decks in your plan.
As another example, even if your development is in the form of a village or cul-de-sac with stand alone dwellings, there should be a description and condition of the roofs and claddings, etc.
Sure, some people have been able to somehow interpret this a number of different ways. But it really is quite clear and even if you are a teeny bit risk averse, when it comes to compliance, more is usually better than less.
And quite frankly it doesn't take much time and is not hard to include everything, so why wouldn't you?
Who manages maintenance?
Who manages maintenance is also clear. Read the Unit Titles Act 2010 (Act) Section 138 (1)(d). The body corporate must repair or maintain any building elements and infastructure that relate to or serve more than one unit. There is no need to rewrite the whole section here.
Who pays for maintenance?
Again who pays for maintenance is clear but you need to refer to a different Section. See Section 126 of the Act. It doesn’t need further clarification. Just read it.
OK. Now we know the rules we can change them
Now you know the rules, think of them as the default. Because you can actually do what you like.
Providing you opt-in and/or opt-out properly that is. Because the Unit Titles Regulations 2011 (Regs) allow for this.
See Section 30 of the Regulations. You just need an ordinary resolution for each case and the best way to do this is by including variations in your plan so they are approved at the same time the LTMP is accepted. One ordinary resolution does the lot. Easy as.
In fact listing those items where the body corporate wishes to deviate from the default, or even just clarifying the body corporate’s position, is one of the most important sections of your plan.
Assuming you don’t want to have to pay lawyers to sort it out later.
Let’s use decks as an example, if you don’t want the Body Corporate to maintain the decks and prefer to leave it up to owners to each look after their own, you can either,
Believe that everyone will interpret the legislation the same way (good luck with that) and that decks are definitely the responsibility of each owner and just leave them out out of the plan. (Scary. Definitely not advised), or
Include a statement somewhere in your plan that states that the body corporate will not maintain the decks and these are left for owners to maintain. Then make sure the owners are aware of this line before they approve the plan. (Much safer. Whew!).
On the other hand, if you do want the body corporate to maintain all decks you should put that in the plan. Because this is one of those areas where people have different ideas - or no idea - and you want to make it clear to everyone - and lock it off so no stroppy owner can argue about it one way or the other.
The benefit of including everything
There is also a benefit from including a summary of every Building Element, Infrastructure and Common Property, whether or not it will require maintenance, because it creates an inventory and a place where you can describe everything. Particularly if you are able to record the make, model and colour etc. Because it means that this information is recorded in one place and available for you and anyone else, at some time in the future when you want to check those details.
After all, you should only have to do this once if you take the same plan and update it for each review. (which you should do anyway).
Leave out jobs covered by service agreements
On the other hand when it comes to listing jobs in your plan, you probably should leave out those that are routinely carried out under a service agreement with your contractors, such as the quarterly lift or door servicing, because they are usually budgeted for in the operating budget and paid for from the operating account.
But then, you should include in your plan any items that are excluded from the service agreement.
Confused? Let’s use an example.
Let’s say that you’ve got some automatic doors that are serviced under a service agreement with a door contractor. Your agreement with them will cover regular servicing and maybe some parts but it won’t cover things like upgrades. So while your operating budget can cover routine servicing and even breakdowns and callouts, if you are intending to replace or overhaul one or more doors, this should be included in your LTMP.
The same goes for the lift, fire systems, etc. Talk to your contractors and ask what items might need replacing that are outside the service agreement, then provide for them during the period covered by the plan.
Even if you just create a provision. Because while things like motors on basement extract fans and CO sensors generally don’t last 10 years, you can’t forecast when they might fail but you can include a contingency or two.
That’s just good planning. And of course Best Practice.
To reiterate - you can do what you like
But just to reiterate. You can do what you like.
If you want to include all items relating to the BWOF and lift servicing etc in your plan - go for it. But if you want to cover them in your operating budget - well you can do that too. And you don’t need to make any statements about that in your plan. Just do it.
Then if you want the body corporate to maintain stuff that it might be presumed is the owners responsibility - and vice versa - you can do that too but for these items you should record them somewhere in your plan. Then once the plan is approved, that's the way you do things around here.
I’ll say it again. It’s the body corporate’s plan. The main thing is that you’ve got one and in one way or another, you've got everything covered.
And then you actually follow the darn thing.
Prepared by: John Bradley. August 2016