In May 2020, Western Australia’s strata laws changed for the first time in over 30 years. The reform has led to more clear and fair rules for those who own, occupy, or intend to purchase a strata-titled property.
Under the revised Strata Titles Act 1985, the 10-year plan and reserve fund has become a requirement for certain strata schemes. It applies to schemes with more than 10 lots or a replacement value of over $5 million.
Why would you need a 10-year plan?
To plan for the future of your scheme.
Stay on top of maintenance and repairs that may arise.
Identify upcoming expenditure and ensure funds are available when needed.
The 10-year plan sets out the anticipated maintenance, repair, renewal or replacement requirements (other than of a routine nature) for any items of common property and personal property of the strata company, that is likely to arise in the next 10 years.
It includes estimates of the expected costs and timeframes. For example, this could include replacing the roof cover, saving up funds for the refurbishment of a lift or resurfacing the pool.
Relationship between a reserve fund budget and a 10-year plan
The reserve fund budget is intended to ensure strata owners understand how much money they will need to put aside to afford large expenses when they occur. It is the duty of a strata company to determine what amount is needed to maintain their strata scheme. A well prepared 10-year plan helps establish the amount of funds the reserve fund should hold to avoid the need for huge ‘one-off’ special levies.
When commissioning a 10-year plan and condition report, it’s important to consider how this information will be incorporated into the reserve fund budget. Selecting a contractor with appropriate qualifications to carry out a comprehensive condition report, will greatly ease the time and effort needed to prepare the budget.
What is a condition report?
Often overlooked in discussions about the 10-year plan is the requirement for a condition report.
The regulations require a strata scheme to have:
“a report about the condition of the covered items and the anticipated maintenance, repair, renewal or replacement requirements of the covered items in the period covered by the plan (a condition report).”
The condition report must include the following information about a covered item:
(a) The date of installation, construction or acquisition.
(b) The present condition or operating state.
(c) The date on which an inspection was last undertaken.
(d) Details of any anticipated work to be required in the period of the plan.
(e) The date(s) on which it is estimated that the work is likely to be required.
(f) Details of the estimated cost.
(g) The estimated lifespan of the covered item or items once actioned.
How to select the best plan?
When choosing a provider for your 10-year plan and condition report, it’s important to make sure you are getting a comprehensive, compliant report which you can implement into your budget.
For more information on 10-year plans and the new strata requirements, visit https://www.assetreports.com.au/strata
