Why should a body corporate’s 10-year maintenance plan be kept updated?

Having a 10-year maintenance plan for your body corporate is a requirement by law. A sectional title maintenance plan assists trustees with keeping all buildings and common property in a good state of repair, as this secures and safeguards the owners’ property investments.
What are the requirements of the STSM Act?
The Sectional Titles Schemes Management (STSM) Act specifies that major capital items, such as exterior painting, waterproofing, roof replacement, security system upgrades, driveway renovations, modernising elevator cabs and upgrading to energy-efficient lighting, must be included in the scheme’s maintenance plan.
The Act also specifies that trustees must report on the 10-year maintenance plan at each annual general meeting (AGM). This report keeps all owners abreast of planned maintenance work and its associated expenses.
What should a 10-year maintenance plan look like?
Unfortunately, the STSM Act does not provide much guidance on the ideal architecture and content of the maintenance, repair and replacement plan (MRRP). The onus is on the trustees to decide for themselves how much detail they want in their body corporate’s plan. Naturally, this will result in one body corporate’s maintenance plan differing from the next body corporate’s plan.
How to calculate capital expenditure contributions?
The goal of the MRRP is to make provision for the future replacement costs of capital expenses. This is how you calculate capital expenditure contributions for a 10-year maintenance plan:
Estimated Cost – (minus) Past Contribution / (divided by) Expected Life.
[Estimated cost = The estimated cost to maintain, repair or replace a major capital item.]
[Expected life = The estimated number of years before a major capital item will need maintenance, repair or replacement.]
In order to calculate future replacement cost, one must first review all past contributions per capital item and then consider the anticipated cost escalation in the future.
Why must the 10-year plan be updated regularly?
An updated plan helps trustees to plan ahead, allowing them enough time to obtain various competitive quotes for maintenance work, and to scrutinise each supplier properly.
With an updated 10-year plan, maintenance works are less likely to fall through the cracks and the scheme’s cashflow projection will always be accurate.
What happens when a 10-year plan is not updated?
If trustees fail to keep their 10-year plan updated, the scheme will suffer from poor financial management, which may lead to incorrect levy calculations and a lack of available funds for planned and emergency maintenance work.
A well-constructed 10-year maintenance plan that is updated regularly will make a noticeable difference to any sectional title scheme, and help trustees to comply with their fiduciary duty.