LONG TERM MAINTENANCE PLAN
WHAT IS A LONG-TERM MAINTENANCE PLAN?
According to the Unit Titles Act 2010, the purpose of a long-term maintenance plan is to:
- Identify future maintenance requirements and estimate the costs involved; and
- Support the establishment and management of the funds; and
- Provide a basis for the levying of owners of principal units; and
- Provide ongoing guidance to the body corporate to assist it in making its annual maintenance decisions.
DO I HAVE A LEGAL OBLIGATION TO GET A LONG-TERM MAINTENANCE PLAN (LTMP)?
Yes, It’s the law – Section 116 of the Unit Titles Act 2010 requires you to have a LTMP in place which is regularly updated. The LTMP must cover a period of at least 10 years from the date of the plan or the last review of the plan.
WHICH BUILDINGS NEED A 30-YEAR LTMP? IS THIS A LEGAL OBLIGATION?
Under section 157C of the Unit Titles Amendment Act 2022, it is a legal requirement for the body corporate of a large unit title development to prepare a LTMP which covers a period of at least 30 years from the date of the plan or the last review of the plan. The definition of a ‘large unit title development’ is a “unit title development that includes 10 or more principal units” under the Unit Titles Amendment Act 2022. Therefore, all unit titles which have 10 or more principal units must prepare a 30-year LTMP which details all costs involved in maintaining the property for the next 30 years.
HOW OFTEN SHOULD I UPDATE MY LTMP?
By law you must update your LTMP at least every 3 years under section 157C of the Unit Titles Amendment Act 2022. However, many buildings are choosing to update every 2 years to keep up with constantly changing building, plant and equipment costs. This will allow these schemes to ensure their long-term maintenance funds cover all expected and upcoming costs associated with the maintenance of the scheme. Failing to update a LTMP will result in a non-compliant scheme and disruption to unit sales.
NOTE: Recent studies show that construction costs can rise annually by 9.5% (QV CostBuilder, 2023). Independent bodies like interest.co.nz show that there is an undersupply in many trade areas keeping upwards pressure on costs.
WHAT ELSE IS IMPORTANT ABOUT UPDATES?
It is imperative that LTMPs are updated as frequently as possible to avoid stressful special levies and to ensure the current owners pay for their use of the building asset. It is important that a fair user pays system is adopted which doesn’t penalise new owners.
UNDER FUNDED LTMP’S = LOWER VALUATIONS!
When potential buyers find out that your strata scheme is under-funded and the long-term maintenance fund is insufficient to cover planned maintenance, they will see your property as high-risk. This leads to negotiations based on the financial risk involved in the sale of the scheme, forcing the sale price down.
WHAT’S INCLUDED IN MY LTMP?
Under Section 30 of the Unit Titles Regulations 2011, maintenance plans must cover common property, building elements and infrastructure – the body corporate may decide to add or remove LTMP items by ordinary resolution. Our inspectors are fully trained building professionals with decades of combined experience in report generation, maintenance, and new project management. Solutions in Engineering LTMPs are accurate maintenance predictions which take the burden off Managers and Committees.