In this article we discuss in general common repairs and maintenance problems confronted both in strata schemes and company title schemes.
Major issues relating to maintenance and repairs include:
Urgent repairs mainly centre around water ingress, and plumbing problems.
Building defects works, also include:
The owners corporation is both legally and financially responsible for the management of common property repairs and maintenance in their strata scheme.
Owners are financially responsible to contribute if there are insufficient:-
A strata managing agent has a duty to ensure that the actions, omissions and statements they make do not injure or cause harm or loss to another. If they are negligent in their duties, they may be liable for damages.
The owners corporation should ensure appropriately qualified people are engaged to carry out the major repairs and maintenance on their property. We have found the engagement of properly qualified project managers and consultants to be valuable for major capital works such as lift replacement and fire orders.
The owners corporation and by extension, the strata committee may be financially liable if they do not engage properly qualified contractors and experts and this can include any injury experienced by a contractor on site.
The source of funding for maintenance and repairs are the administrative fund; the capital works fund; special levies and loans if required. We have found that a combination of loans and capital fund levies have also been used by strata and company title schemes.
Capital works funds are important and involve forward planning for future spending. Specialist consultants should be engaged to prepare these forecasts.
Though apartments are one of the largest asset one owns, it is not uncommon for owners to be unable or unwilling to pay higher levies or contributions. This reluctance often results in special levies having to be raised.
Schemes and companies that do not plan and budget effectively often find themselves “putting out fires”. Long term planning reduces the need for crisis management and the angst that comes with that.
Good capital works plans alleviate or reduce the backlash that often follows the raising of special levies.
Funding to meet the costs of rectification works can be covered by the administrative or capital works fund or through a special levy (or loan), the builder or developer.
Some payments will be covered under home warranty insurance; or by litigation mostly involving the builder or developer and suing for breach of contract or negligence. Litigation is a dangerous and uncertain path to go down. Remember one side wins and the other loses. Always mediate before litigation. Mediation has a greater success rate. Sometimes litigation is unavoidable but it is always costly.
Safety concerns can flow from poorly maintained common property.
Regular and managed maintenance leads to a growth of confidence in the strata committee, strata managers and/or building managers. Sound financial management can avoid or minimise raising special levies.
When carrying out even routine maintenance, regular reporting avoids misunderstandings and complaints.
The way major capital works are managed is important. Common concerns include inadequate assessments of the nature and costs of required works, insufficient funds available to cover these costs, poor standard of work and lengthy delays.
How to deal with capital works includes:
Emergency major repairs and concerns arising from these include:
When undertaking maintenance, repairs and capital works, the provision of information and communication as the work progresses is important. Insufficient information can and does lead to complaints.
Another source of complaint is dissatisfaction because of the time taken to reach an agreement, including non-essential spending.
Disputes between individual owners and the owners corporation related to the management of major repairs and maintenance are common.
Concerns, disputes, and allegations include:
Disagreements in themselves can lead to delay and further damage.
The views of an owner-occupier may differ from investors; newer and older owners; shorter term and longer-term owners all who have conflicting interests.
Maintain a paper trail of communications, site visits, photos/videos, and expenditure. Record keeping helps temper complaints and increases confidence in the strata committee, strata and building managers.
To summarise, whether dealing with maintenance, repairs or defects the optimal approach is for:
Other stakeholders who may be involved in the management of strata properties and company title properties (e.g. lawyers, engineers, the NSW Office of Fair Trading and the Consumer, Trader and Tenancy Tribunal) may also play a part in improving and or maintaining the quality the property.
We hope this general discussion on maintenance, repair and capital works has been of some assistance.