This article discusses review 10 year capital works plan, clarifying what a proper review involves under NSW strata law and why a new forward-looking plan is required.
Question: For 10 year capital works fund plans, the legislation is clear that an owners corporation “must review the plan at least once every 5 years.” So, what does it mean to “review” the plan? Can we just look at it on a page?
Answer: The 5 year review requires a new 10 year plan (commonly a 15 year forecast) to be put in place.
There are two main points:
- A new plan must be prepared for a 10 year period following the expiry of each prior plan.
- Each plan must be reviewed at least once every 5 years.
Commonly, Quantity Surveyors prepare a 15 year plan or forecast to ensure the owners corporation complies with the legislation by always having a 10 year future plan in place prior to the 5 year review. The 5 year review requires the process to be undertaken again and a new 10 year plan (commonly a 15 year forecast) put in place. The most important factor being that you have always budgeted for 10 years into the future.
Additionally the plan must include:
- details of proposed work or maintenance;
- the timing and anticipated costs of any proposed work;
- the source of funding for any proposed work;
- any other matter the owners corporation thinks fit.
This post appears in the June 2022 edition of The NSW Strata Magazine.
Zac Gleeson GQS E: zac@gqs.com.au P: 0419 755 896