Why Structuring the 10 year maintenance plan is so important

Why Structuring the 10 year maintenance plan is so important

The Sectional Title Maintenance Schemes Management Act prescribes that every sectional title scheme has to have a 10 year maintenance action plan for the complex. In addition funding needs to be provided for the maintenance of the complex.

Structuring a 10 Year Maintenance Plan correctly is essential

The purpose of the legislation is noble and consumers rights should be greatly protected. The Act gives guidance on how such a plan is structured. But by all accounts the devil is in the detail. Managing agents and trustees, many of whom are ill equipped to make decisions on how this plan is best structured, make decisions based on cost alone without the requsit knowledge to  make sure the Plan is to the benefit of the body corporate or the unit owners in the complex.

A bad 10 Year Maintenance Plan can cost money

This situation was illustrated effectively when our inspectors were called to a complex in Umhlanga Rocks, where a frustrated trustee was appalled that their building which had been repainted in the last two years at a cost of some R1 4000 000 by a reputable painting firm, now looked a bit shell shocked with cracks appearing all over the five story, 53 unit complex.

Choosing the right team and skills is essential

The complex had been provided with a 10 year maintenance plan which cost them around R7000.00 by a firm of quantity surveyors in typical check list format. The plan had been costed according to the most important issues that had been identified by the trustees.

HouseCheck would have quoted about R16 000 for a plan on the same complex and would Obviously not have been awarded the job. The reason for the extra cost is simply that all HouseCheck inspections are based on the present condition of the building and this can only be achieved by doing a thorough and concise conditional assessment of the property. To do this properly takes time and time is money.

The approach by the quantity surveyor was to meet with the trustees and then take a quick walk through the complex and to make assumptions of the longevity of each of the components. they then went and drew dimensions off plan as they are used to doing to formulate their cost estimations over the next ten years.

However a Quantity Surveyor is not necessarily qualified or experienced enough undertake a conditional assessment of the building. In this case it cost this body corporate  a Million Rand in further work. Money which could have been saved if a proper conditional assessment had been made.

The new trustee who called us in was very knowledgeable in construction methods, and together with our inspectors identified many areas thet the developers of the maintenance plan had not identified. In addition the solutions proposed for some of the obvious problems were not the most cost effective.

We further discovered that many of the damp problems had been created by building improvements done by the regular maintenance guy. Te complex used this unregistered builder to do all their regular maintenance work. For example  the builder, had retiled balconies at the trustees behest, bit not stripped off the old tiles. In doing so he had breached the damp proofing levels in the original construction.  This resulted in an accumulation of water against the outside balcony walls.  The water had seeped through the walls and unsightly water laden external cracks appeared on the outside of the balcony. Large sections of the paint on the exterior wall had bubbled as a result and the painting finishes were a mess in areas. This massive concrete structure was being treated as a sponge.

There were many other issues identified, but this example shows how something like this can influence the cost of maintenance.

The trustee that called us in was aghast and also concerned that the existing trustees would not authorise the necessary repairs. In addition he felt that they may be liable for some of the damage as a result of their decisions. His main concern was that although the complex had some money in their reserve fund he was pretty sure that the owners would not be happy with our suggested plan to fix the damage because of the cost implications.

After sitting with the trustee and analysing the maintenance plan based on our dynamic financial analysis tool, we were able to construct a ten year plan to fix ALL the identified defects within the complex. This plan of ours did not require an increase in monthly levies or a once off special levy.

Using the correct tools to identify maintenance options

This unique reporting methodology and tools that HouseCheck has developed, we call a Maintenance Action Plan (MAP). This plan comes in two parts. The first critical part, which is most times ignored by sectional title schemes, consists of a thorough conditional assessment of the property. The second part which is the financial analysis is designed to provide trustees with the tools to stagger their maintenance over the ten year period to smooth out the spikes in cash flow management.

HouseCheck’s Plan saved the client a small fortune

At HouseCheck all that was  required was some cool heads and the HouseChecks dynamic forecasting tool. We were able to demonstrate to the trustees that by taking a phased approach and assuming some risk by the body corporate for what was supposedly unit owners areas of responsibility, that the body corporate could save R500 000 over 10 years,

A worthwhile R16000 investment I’d say.

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