The STSM act has placed a focus on a LTMP (long-term maintenance plan) for sectional title schemes. It might seem to be new, but in actual fact, is it a best practice used in the industry for several years. The ever-increasing sectional title type development that dominates residential housing market has brought this to the forefront. We will with this publication endeavor to give a brief context and step by step framework for understanding and implementing a LTMP.
Do you need a LTMP (whats the fuss all about?)
- It is a business imperative, especially for managing a complex structure such as sectional title schemes and home owner’s associations, commercial business parks
- Then there is the issue of compliance and regulations. A LTMP is a legal requirement
“if you fail to plan, you plan to fail”
Do I need to have a specific format ?
No ,you can compile the plan yourself, and there is service providers that can help.
A key principle in business management is to have the best plan. Getting it wrong has financial and legal implications.
There is service providers that specialize in property diagnostics and maintenance planning that can offer you a custom plan based on your unique requirements.
There is also help in the form of international and local best practices such as IIMM and ISO550000. These bodies have developed specific guidelines and standards specifically for LTMP for physical infrastructure.
We have a plan, we manage a reserve funds for restoration, every 7 to 10 years and we have budget for repairs and diligent do repairs when necessary. Is this sufficient?
The question rather is : Is it efficient and effective and compliant?
- Could you have achieved the same with less money
- Could the failures have been prevented
- Does it meet the STSM act standards
Legislation is not prescriptive on your plan’s format. The legislation rather states minimum standards that the plan must comply with.
Just 2 compliance considerations
- Due to the minimum reserves requirements in the STSMa , need there be sufficient provision for expenses. Insufficient reserves can result in the need to make additional provisions which means increased levies. Thus if you get your calculations wrong, will you be faced with big problem.
- The legislation,also states legal consequences for non-compliance for managing agents and trustees of a body corporate. If you are comfortable with your plan and are informed and comfortable of the legal framework. Then you can decide if your plan is sufficient.