Buying an apartment? Make sure you review the Body Corporate's Long-Term Maintenance Plan…

A purchaser was looking to buy an apartment in a Unit Title development and was concerned about the lack of a long-term maintenance plan.

Vendors selling unit title apartments must provide a copy of the Body Corporate’s Long-Term Maintenance Plan (LTMP) and disclose the balance of the Long-Term Maintenance Fund (LTMF) (if there is one) as part of their pre-contract disclosure to purchasers.

It is compulsory for all Body Corporates to have a LTMP that covers a period of at least 10 years. Changes coming into force in 2024 will require developments of 10 or more units to have a plan covering a period of at least 30 years.

This plan enables the Body Corporate to identify the future maintenance requirements and estimate the costs involved to repair the common property.

This enables owners to be proactive rather than reactive regarding property maintenance and financial planning.  Purchasers should review the plan and consider whether it appears satisfactory, depending on the nature of the building.

The LTMP must:

• Cover the common property, building elements, and infrastructure of the unit title development, and any additional items that the Body Corporate has decided by ordinary resolution to include in the plan;
• Identify those items that the Body Corporate may decide by ordinary resolution not to maintain for any period during the lifetime of the plan;
• State the period covered by the plan;
• State the estimated age and life expectancy of each item covered by the plan;
• State whether there is a long-term maintenance fund;
• If there is a long-term maintenance fund, state the amount determined by the Body Corporate to be applied to maintain the fund each year; and
• State who has prepared the plan.

If there are planned works in the LTMP, purchasers should review the estimated costs of the works against the amount the Body Corporate has in the fund. If there is a shortfall between the two, purchasers should be aware there will be increased levies in the future.

Not all Body Corporates have a LTMF if their members have voted against having one, but any works under the LTMP must only be funded through a LTMF.

Purchasers should obtain legal advice when reviewing the pre-contract disclosure statement to ensure they are making a good investment and avoiding costly surprises.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.