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The most common statement you may hear from a strata committee is “we don’t have sufficient money in our sinking fund to undertake larger repairs and maintenance to common property”. 

Every strata scheme large or small will undertake remedial rectifications at some point and if a committee commissions a remedial report for faults in the building, you must be aware that there are works that will need to be rectified sooner or later.

Early preparation for special levies is much better that a sudden injection of cash required from each resident, this is how we would operate in a perfect world, however it is not a perfect world.

The fact is owners corporations should be aware of their liability to maintain and repair common property. Owners corporations that fail to comply within a reasonable time period risk more than just an NCAT application, they risk their insurances, and their reputation as “capable to manage”. Something rarely mentioned in many articles is what I refer to as “the chain reaction” and this can be costly…

In many residential strata buildings, the repair list (or as Grays Rescue Building Management refer to it, “Outstanding Works Schedule”) within lots can be long and more often than not, owners are waiting extended periods of time for repairs to their units, as their repairs are deemed non-threatening of further damage.

An owners corporation may feel they are acting responsibly by scheduling rectification works over a couple of years to balance the budget repairs, and it is responsible, however once one owner makes an NCAT application for their long awaited works to be rectified, this can set off a chain reaction of residents who want their lots rectified. Once owners become aware that an owners corporation must rectify within a reasonable period, the demands from lot owners will come thick and fast forcing an owners corporation to make repairs. 

A strata committee knowing that the repair cost v’s the NCAT cost is not worth pursuing in many cases, can find themselves having to raise funds to repair immediately instead of as per outstanding works schedule. It’s a bad look for a strata committee who thought they were acting responsibly.

What can a strata committee do to limit this exposure for what was a good plan?

Often, what leads to this kind of situation is common property rectification items being placed in front of lot rectifications owners’ rectifications on a continual basis. A Building Manager and a strata committee need to balance these outstanding works to reduce both lists.  In more serious circumstances where the lot owners damage is subsill where sliding doors require replacement, it does not take a genius to work out that a capital works fund will empty very rapidly if the owners corporation suddenly are paying repair costs for a handful of these unscheduled repairs. The best of strata committees can be caught off guard and on the back foot. 

This simple amendment to a well-thought-out plan is what I recommend to my clients, it is based on my experience of executing a good outstanding works plan as a team with our clients.