Apartment living with a 10 year plan...

Apartment living is a now common in Australia's capital cities with one in five people living under strata management. In Victoria apartment owners and body corporates will shortly be required to develop a ten year plan for major capital works and have a special fund to pay for the works under new legislation.

It is anticipated the Owners Corporations Act 2006 will be proclaimed on or near December 31, 2007 where it will then take effect. The legislation requires a prescribed owners corporation to establish the ten-year plan and maintenance fund for capital works and maintenance.

In an article written on June 25, 2007 by Wendy Mason for the Your Money section of the Melbourne Herald Sun, Wendy describes how new legislation will affect body corporates when the new legislation takes effect.

The Owners Corporation

Under the new legislation, the new name for the Body Corporate is the The Owners Corporation, and its responsibility to manage the common property for flats, units, high-rise apartments, industrial estates, hotels, retirement villages, shopping centres and car parks.

The Maintenance Plan

The maintenance plan is required to document the capital maintenance or improvement requirements over an extended period of time. The maintenance plan must identify;

1. The major capital items that require maintenance or replacement over the next ten years. For example;
   • Mechanical Ventilation
   • Heating
   • Fire Systems
   • Lifts
2. Present condition or state of these items
3. Time frame for when these items will need to be repaired or replaced
4. The expected life of those items when they are replaced
5. Any other prescribed information

The Maintenance Fund

The maintenance fund is required to finance the Maintenance Plan and will be generated through body corporate levies at a rate in line with the capital requirements of plan. The aim of the fund is to provide a reserve of capital so that owners don't get hit with large, one-off or unexpected levies.

The maintenance fund can also be used for the ongoing repair or replacement of common property such as painting, carpets and other regulatory maintenance.

More information

Victorian Consumer & Business Centre

113 Exhibition Street

Melbourne 3000

Telephone: 1300 55 81 81

Website http://www.consumer.vic.gov.au

Source: Wendy Mason for the Your Money section of the Melbourne Herald Sun