Victorian Owners Corporation Maintenance Plan: Who Needs One and How to Prepare It

The short answer

• Tier 1 and tier 2 owners corporations (more than 50 occupiable lots) must prepare and approve a maintenance plan. Tiers 3 to 5 can choose to (s 36).
• The plan covers major capital items expected to need repair or replacement in the next 10 years, with their condition, timing, estimated cost and expected life (s 37).
• It has no effect until the owners corporation approves it (s 38).
• Once approved, you need a maintenance fund in the owners corporation's name, and annual fees must be enough to carry the plan out (ss 23(2), 40, 42).
• No particular person has to prepare it. The Act doesn't require a consultant, though a building inspection makes the costs more reliable.

What the plan must cover

The plan must set out (s 37):

• the major capital items expected to need repair or replacement within the next 10 years
• their present condition or state of repair
• when they, or their components, will need repair or replacement
• the estimated cost
• their expected life once repaired or replaced

"Major capital items" include lifts, air conditioning plant and heating plant (s 37(2)), and these classes (Regulations reg 7):

• Common property structures, such as the roof, stairways, balustrades and window frames
• Common property services, such as shared water, gas and sewerage pipes, pumps, drains, and electrical and telephone infrastructure
• Common property assets, such as fences, pools and water tanks
• Lifts
• Air conditioning plant
• Heating plant

How to prepare it

1. Collect what you have. Get the plan of subdivision, building plans and specifications, equipment details, previous reports and maintenance history. A developer must hand over a maintenance plan at the first meeting, so start from that if you have it (s 67).
2. Inspect the building. Survey each item on the list and record its condition. Consumer Affairs Victoria publishes a maintenance survey template, and says an owners corporation may need specialist help for inspections and costings.
3. Estimate timing and cost. For each item, record when work will be needed, what it will cost and how long it will last afterwards. Use quotes or a consultant's estimates where you can.
4. Use the template, if it helps. Consumer Affairs Victoria offers a Word template that lists building elements in a table, with columns for condition, work needed, date, estimated cost and expected life. The Act doesn't require it, so another format is fine if it covers everything in s 37.
5. Set the fund contribution. Work out the annual amount needed to carry out the plan. The contribution must be "adequate to fund the approved maintenance plan" (s 42(3)).
6. Approve it. The plan has no effect until the owners corporation approves it (s 38). The Act doesn't say which resolution or meeting. The safest route is an ordinary resolution at a general meeting or by ballot.
7. Report on it every AGM. The AGM must hear a report on how the plan is being carried out (s 39).

Changing the plan

• Amending. The owners corporation can amend an approved plan by ordinary resolution (s 37(1A)).
• Reviewing. The Act sets no fixed review cycle. Consumer Affairs Victoria's guidance says to inspect the common property and review the plan every year.

The maintenance fund

• Set it up. An owners corporation with an approved plan must have a maintenance fund in its own name (s 40), kept in separate accounts (s 33).
• What goes in. The part of annual fees set for the plan, insurance money for damage to items in the plan, and interest earned on the fund (s 42).
• Spending in line with the plan. Needs an ordinary resolution (s 43).
• Spending on something else. Needs a special resolution (s 44).
• Urgent spending. Allowed without a special resolution for urgent matters, such as a safety risk or a repair that couldn't reasonably have been foreseen, and reported to owners as soon as possible (s 45).

Works that an approved plan provides for don't count as "upgrading works" needing a special resolution (s 53).

If you're tier 1 or 2 and don't have a plan

The Act doesn't set a penalty, but having a plan isn't optional. A lot owner can apply to VCAT for an order requiring the owners corporation to comply with the Act (s 165).

Common questions

Does a professional have to prepare the plan?

No. The Act doesn't require a qualified person. For larger buildings, a building consultant's inspection and costings make the plan easier to defend when owners question the fees.

Is it a 10-year plan?

Yes. It covers items expected to need work within the next 10 years (s 37). Some consultants model longer periods, which can push up fees. Our owners' guide covers what to look for.

Does it have to be approved at the AGM?

Consumer Affairs Victoria's template says so. The Act only says the owners corporation must approve it (s 38). Putting it to the AGM, alongside the budget and fees it affects, is the simplest approach.

Where UnitBuddy fits

UnitBuddy keeps the long-term plan beside the fund balance and annual fees, so the committee can see each year's planned work against what's actually in the fund, and report on it at the AGM.

Further reading

Keep the scheme file in one place the committee and the manager can both open. Features, pricing, or book a tour.