The Unit Titles Act 2010 and accompanying Unit Titles Regulations 2011 came into force on the 20th of June 2011. 

For existing bodies corporate, a number of provisions of the Act do not come into force immediately and can be phased in over a 15 month transition period.  This includes the requirement for a long term maintenance plan and a long term maintenance fund. 

Section 138 of the Act requires the body corporate to "…manage, maintain and keep in a good state of repair the common property…" and to that end section 116 requires that a body corporate must have a long term maintenance plan for at least 10 years.  Clause 30 of the Regulations requires that the plan must be reviewed at least every 3 years and disclosed to unit purchasers, along with past and future anticipated expenditure on maintenance matters.  However whilst the plan is mandatory, the sinking fund, or long term maintenance fund is not, and under section 117 of the Act bodies corporate are able to opt out of this provision by Special Resolution.  In most instances it is unlikely (and would be impractical for) a body corporate not to establish such a fund and the fund is particularly appropriate for large developments to accommodate predicted maintenance costs and provide for regular contributions by unit owners to underpin the plan.

The deadline for a body corporate having a maintenance plan in place is 1 October 2012, although at any time prior to that date, a body corporate can vote by special resolution that any or all of the transitional provisions apply earlier.  Procedurally, although it is not entirely clear in the Act, it appears that existing bodies corporate will need to hold an AGM within six months of the commencement of the Act in order to make decisions relating to the long term maintenance plan and fund.  Of course this may not coincide with a body corporate's current reporting and accounting cycle, and it must be taken into consideration that if decisions are not reached at this meeting a second will need to be held before 1 October 2012 otherwise it may be too late and the default provisions will apply.  It is therefore advisable to start planning for these changes earlier rather than later.

Prendos is experienced in the compilation of maintenance plans and the forecasting of future cost.  Contact Sean Marshall or Richard Maiden to discuss your options further today.