Long Term Maintenance Guidance

BC General Manager Steven Garland discusses the changes to LTMPs, what can happen if the changes are not met, and funding around LTMPs due to the recent legislation updates.

Final changes in the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Act 2022 came into effect on the 9 May 2024. One of the updated regulations aims to ensure there is an adequate Long-Term Maintenance Plan (LTMP) regime so let’s discuss the updates and some implications.

(See s157C of the Amendment Act here)

What are the changes for Long Term Maintenance Plans?

  • All body corporates must have a LTMP that covers at least 10 years. Large unit title developments (10 or more units) must now have a LTMP that covers a 30-year period (previously 10 years) and comply with all matters as per the regulations.
  • As well as having a LTMP reviewed every three years, the Body Corporate must review the plan as soon as practicable if matters arise that will impact a LTMP before the three-year review.
  • A qualified building professional (or other suitable professional) must be consulted when developing or reviewing the LTMP unless a special resolution states not to.
  • A Body Corporate LTMP must have detailed costings for the first 10 years of anticipated maintenance (See amended regulation 30 and 30A). Under the new regulations for large developments, the plan also needs to include a high-level maintenance plan for years 11 – 30 but can exclude costings.

What can happen if the LTMP regulations are not met?

There are a range of consequences if the LTMP is not updated to comply with the new requirements:

  • Impact on Saleability: If an owner wants to sell their property/unit the pre-contract disclosure statement will disclose that the LTMP is non-compliant which could have an impact on the value of the property/unit being sold or could also impact the actual sale.
  • Legal Proceedings: The Committee/BC could be taken to the Tenancy Tribunal by an Owner/s for breaching the Unit Titles Act for not having a compliant LTMP. The Tenancy Tribunal could order the commission of a LTMP.
  • Breach of Code of Conduct: The Committee could be in breach of the Schedule 1A Code of Conduct for Body Corporate Committee members if the Committee did not get the LTMP reviewed and updated after advice from the BC Manager to do so. The code includes a commitment from members to understand the UTA and comply with the UTA and code.
  • Removal of Committee Member: A Committee Member may be removed from the Committee for breach of the code due to not commissioning a LTMP review when advised of the legal responsibility to do so.
  • Committee Accountability: If there is significant damage to a building due to a Committee’s refusal for a number of years to commission a LTMP when advised by the BC Manager there might be some accountability to the damage. A BC Manager is responsible for advising the Committee to conduct a review and that not doing so would be a breach of the UTA, but if no LTMP is commissioned then the accountability lies with the Committee.
  • BC Manager Accountability: If the BC Manager failed to advise the BC of the legal requirements and consequences of failing to proceed with updating the LTMP, there might be some culpability on the BC Manager as they will have breached their code of conduct.

If the owners in a Body Corporate do not want a building/qualified professional to develop or review the LTMP, then opting out must be done by Special Resolution at either a general meeting or by a passing a resolution without a meeting (s104).

How is the LTMP funded?

  • A BC must establish and maintain a long-term maintenance fund (LTMF) (unless the BC by special resolution decides not to have one) and determine the level of funding.
  • The LTMP must now specify the source of funding such as using existing funds, annual levies, or special levies.
  • The LTMF does not have to fully fund the LTMP.
  • Funds in the LTMF can only be used towards spending relating to the LTMP.

Key points taken from guidance from Joanna Pidgeon of Pidgeon Judd Law.

Kind regards

Steven Garland

General Manager – Body Corporate
apm

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