Strata communities face ongoing challenges in maintaining their buildings and managing costs effectively. A recent webinar by LookUpStrata, featuring strata leaders Paul Morton from Lannock Strata Finance, Michael Allen from Bugden Allen Group Legal and Bruce McKenzie from Sedgwick highlighted the critical role of proactive maintenance in prolonging building life and reducing long-term expenses. The discussion emphasised that a reactive approach to building maintenance often leads to higher costs and potential safety hazards, whereas proactive measures can protect property values and ensure the longevity of the building.
The high cost of procrastination
- The webinar underscored that delaying essential maintenance inevitably leads to increased costs.
- Neglecting maintenance can result in minor issues escalating into major safety hazards and costly repairs.
- Failure to address building defects promptly can cause rectification costs to quadruple or even more.
- Insurance coverage can be impacted by pre-existing maintenance issues or defects, potentially leading to exclusions or increased premiums.
NAT: The cost of procrastination in strata. What is the true price of delay? | Panel – Feb 2025
Key Proactive Maintenance Measures
- Implement a comprehensive maintenance plan:
- Having a maintenance plan in place and actively implementing it is crucial. This plan should outline short, medium, and long-term maintenance needs.
- A well-structured maintenance plan helps in budgeting for long-term projects like repainting or resurfacing, preventing unexpected financial burdens.
- Regular building inspections by experts:
- Routine inspections by building experts can help flag problems early. These inspections should be regarded as an investment rather than an expense.
- For newer buildings, inspections should occur at least 12 months before the expiry of any statutory warranty periods.
- Be alert and invested in your building:
- Owners and occupants should be vigilant and report any changes or issues they notice in common areas.
- Paying attention to changes, such as dampness, can help identify underlying problems early.
- Avoid quick fixes:
- Resist the temptation to apply temporary solutions without investigating the root cause of the problem.
- Consider whether isolated defects may indicate systemic issues that need a broader assessment.
- Understand your building:
- Simulate emergency situations to identify potential safety issues and report any concerns.
- Ensure that fire safety measures are in place and easily accessible.
- Consider preventative measures on balconies:
- For buildings with balconies, especially in coastal areas, implement proactive maintenance measures to prolong the building’s life and reduce long-term costs.
- A maintenance plan is critical for coastal properties exposed to extreme marine environments.
Financial benefits of proactive maintenance
- Early detection and preventative measures can lead to controlled and lower costs.
- Addressing issues promptly allows for proper planning, expert consultation, and obtaining multiple quotes.
- Proactive maintenance can also enhance property values, as buildings in good condition are more attractive to potential buyers.
- Delaying maintenance increases the likelihood of non-renewal of insurance policies.
Funding proactive maintenance
- Discuss all funding options: Discuss all funding options including sinking funds, special levies and strata loans.
- Consider a strata loan: Strata loans provide flexibility for owners with terms between 1 and 15 years. Some loans have not penalty for early payout.
- The staged projects option: Completing project in stages often leads to increased costs because of inflation and duplicating costs for the builder to come on site.
By implementing these proactive maintenance measures, strata communities can prolong the life of their buildings, reduce costs, and enhance property values. The key is to shift from a reactive approach to a proactive mindset, viewing maintenance as an investment rather than an expense.
Resource material
Download Bugden Allen Group Legal’s cheatsheet: National legislative table – Costs of procrastination in strata
Presenters
Paul Morton Lannock Strata Finance E: paul@lannock.com.au
Michael Allen Bugden Allen Legal Group E: michael@bagl.com.au
Bruce McKenzie Sedgwick E: bruce.mckenzie@au.sedgwick.com P: 1300 735 720
This article was written by The LookUpStrata Team.
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Read next:
- NAT: Early detection of strata building defects. It’s time to abandon the Whack A Mole approach
- NSW: Water Leaks, Defects and Disputes in Strata Buildings
- NAT: Building Leaks – The Need for Speed to Save Costs and Prevent Structural Damage
Visit Maintenance and Common Property OR Strata Topics by State pages.
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