Buildings in strata schemes are no different to cars, in that their value will constantly depreciate, and will at some stage require money to be spent overhauling them. But to combat this constant depreciation, your car requires ongoing maintenance and repairs to keep it on the road until the major overhaul comes around.
Scheduling and budgeting for maintenance differs from improvements, as maintenance and repairs tends to include general, day-to-day issues and not major capital expenditure. This means considering what the Caretaker or the Resident Unit Manager (RUM) has observed in terms of conditions. Is there a leaky tap? Is the barbeque working? Budgeting for repairs and maintenance requires money to be into the maintenance fund for these kinds of issues.
RUM’s are commonly responsible for the distribution of the maintenance fund (dealing with minor repairs/rates) and the sinking fund (capital repairs and non-recurrent items). From a building management perspective, the division between these two funds is neither here nor there.
Common property which is in good condition leads to greater property value, and ensuring common property is of a high quality is a key role of a RUM. But while it is important to budget for improvements, if the pool fence falls over during this time, this will require emergency repairs to rectify the situation. Repairs to a pool fence are not optional and this is why it is important to have this eventuality properly budgeted for.
A RUM should ask – was this something which was budgeted for when it was being forecast in either the sinking fund budget or the maintenance and repairs budget? If it wasn’t, what was the effect on the budget and is there enough left to do critical maintenance and repairs? Some maintenance issues can be delayed – worn or faded paving or interior carpets have no real effect to the function of the building, provided there are no hazards to residents.
Scheduling maintenance should also consider long term items – ask contracted work suppliers to tell you what is coming up. For example, for fire equipment maintenance, every 10 years all the fire extinguishers and hoses might need to be replaced or tested. Asking these questions ensures critical items can be covered when the needs arises.
A common mistake with budgeting for maintenance and repairs is where RUMs or Committees get quotes without formulating scopes of work for the maintenance. It is vital to have a good understanding of what money needs to be spent on, how much it will cost, and whether it can be properly funded. Maintenance requires attacking the root cause of the issue, and if water damage has occurred downstairs as a result of a water leak in a unit from the top floor, there is no point fixing the water damage if the leak from the top floor has not been repaired first.
If you need advice on how to best schedule repairs and maintenance in your scheme, contact your SSKB Community Manager. We can advise and guide you through the process to gain the best outcome for your strata scheme.