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How to achieve financial prosperity in a body corporate

The cost of maintenance for a sectional title scheme is commonly determined by its size, the current state of repair and the extent of maintenance required. To gauge these costs, the body corporate needs to obtain quotes from the relevant contractors.

Prioritising projects
In establishing maintenance priorities, the likelihood of asset failure must be assessed alongside the potential consequences of such failure relating to cost, safety, the environment, energy usage, etc., as well as the additional cost of delaying maintenance activities on a capital asset.

The highest priority maintenance item may not always be completed first, as it could require more time to complete. Factors such as scope and weather, as well as the availability of materials and labour, could affect the duration of each project.

As the “whole is greater than the sum of its parts” in sectional title living, it is immaterial which members stand to benefit more, or less, from a maintenance project. Everyone in a community scheme profits from buildings and common property that are well-maintained.

The responsibility for maintaining and insuring the common property lies with the body corporate. While some managing agents offer facility management as part of their services, generally speaking, managing maintenance projects is not the managing agent’s responsibility.

Selecting the best contractor
Recruiting a reputable and experienced contractor is critical to the successful execution of a maintenance project. Depending on the size of the scheme, the trustees may want to consider employing their own in-house maintenance manager. 

A good contractor will be dependable and responsive, with sufficient and relevant experience. In addition, they should be adequately insured, properly accredited and compliant with health and safety regulations.

Here are seven helpful tips for bodies corporate to maximise their service agreement with contractors:

1. Be sure to provide a detailed, written description of your project alongside a realistic budget.

2. Obtain multiple bids, not only to secure a lower price, but to also obtain information about the broader industry and its key players.

3. Ask for references and request feedback from previous clients on contractor reliability, conduct and budget control.

4. Request descriptions and specifics of projects that are similar in scope and size to the scheme’s project. Try to visit current locations to observe their working dynamics, attention to detail, as well as staff behaviour and attitude.

5. Enquire about the contractor’s areas of expertise- for example, they may have abundant experience in painting, but not much experience in spalling or waterproofing. Be sure to match the scope of your project with their experience and areas of specialisation.

6. Check their accreditation with the relevant industry bodies, and their compliance with industry regulations. Make sure that they have sufficient insurance in place to cover their staff as well as the scheme.

7. Set clear expectations upfront with regards to punctuality, on-site conduct, quality, budget control and deadlines.

A good contractor will be dependable and responsive, with sufficient and relevant experience. In addition, they should be adequately insured, properly accredited and compliant with health and safety regulations.

How we can help
Keeping the 10-year maintenance plan updated makes it easier to manage the costs of maintenance, as well as identify priority projects. An up-to-date maintenance plan enables the body corporate to accurately keep track of its capital expenditure.

Mirfin’s online dashboard provides a simple and efficient platform where trustees can keep their maintenance plan updated. This excellent financial planning tool can be accessed whenever the plan needs to be amended, assisting the body corporate with sustained financial stability and prosperity.

Click here for a free quotation.