What’s the problem with NSW Initial Maintenance Schedules

or, when more developer information brings different problems …

Developers have always failed to provide new strata buildings with enough information about their building and the equipment in it.  But the newish NSW Initial Maintenance Schedules are a flawed way to improve that obligation with a few traps for strata buildings and strata owners.

[6.00 minutes estimated reading time, 1208 words]

Introduction

I’ve previously written the importance of the building structure in a strata title corporation in my article Strata Improvements 04: There’s nothing common about this strata property and about what strata buildings must do to keep their buildings in good condition in the article Strata Improvements 06: Fixing What’s Broken in Strata Buildings.

In today’s article I take a deep dive into a quirky variation on strata building maintenance obligations from New South Wales that refines those obligations and some of the less obvious consequences of that refinement.

Tell me about these initial maintenance schedules

Since 2015, NSW developers have been obliged to prepare and provide an initial maintenance schedule to strata buildings under section 115 of the Strata Schemes Management Act 2015, covering matters and documents specified in regulation 29.

The NSW initial maintenance schedule is intended to cover the inspection and maintenance of things in common property if that’s reasonably required to avoid damage to the things or their failure to function properly for their intended purpose/s and covers things like:

• exterior walls, guttering, downpipes and roof,

• pools and surrounds, including fencing and gates,

• air conditioning, heating and ventilation systems,

• fire protection equipment, including sprinkler systems, alarms and smoke detectors,

• security access systems,

• embedded networks and micro-grids.

But the range of common property structures that can be included is not limited, so an initial maintenance schedule could cover all common property structures and equipment in the strata building.

The initial maintenance schedule must specify inspection and maintenance schedules for things that are included in it.

Plus, the initial maintenance schedule must also include all warranties, manuals, manufacturer’s requirements, and supplier details for those things.

This sounds like a very useful thing for strata buildings to have as it would help strata buildings to better understand what’s in their common property and to maintain things.

But it isn’t everything that it appears to be.

Developer obligations about strata records and information

Developers have always had obligations to provide those kinds of documents to strata buildings as part of the handover process under section 16 of the Strata Schemes Management Act 2015, and regulation 6, but usually didn’t do so.  Plus, in my experience developer record handover has been patchy [at best] and strata buildings almost universally never do anything about it. 

So, if developer compliance in providing initial maintenance schedules matches how often and well they provide all the other strata handover documents under pre-existing laws, then initial maintenance schedules will be pretty rare things in NSW strata buildings.

Additionally, when documents are provided by developers in the strata handover process, they’re often ignored by the strata buildings or lost [sometimes in a former strata manager’s archive boxes or electronic folders], or no one knows where they are or have gone.

As an example, I recall that after years of [unsuccessfully] trying to get detailed construction drawings for a building during a major strata defects claim where everyone said they didn’t have them, I accidentally found them all in a box in the rooftop plant room during a building expert’s inspection.

But, even if an initial maintenance schedule is provided, it’s likely that it will fit at one of two ends of the spectrum.  Either too simplistic to be useful or way too complex and detailed [comprising folders of detailed technical documents from suppliers] and, as a result, confusing to the new strata committee and strata owners such that they get ignored.  Think of the detailed new owners’ folders left in kitchen drawers that sit unopened forever.

So, as convenient and helpful as this new developer obligation to provide initial maintenance schedules sounds, it’s inadequate as a way of promoting or ensuring better strata building structure maintenance and I suspect this will be just another developer obligation that is never complied with or enforced.

A disconnect between the schedule and common property duties

Assuming an initial maintenance schedule is provided, NSW strata buildings are not strictly required to comply with it as it’s not referred to in section 106 of the Strata Schemes Management Act 2015 which sets out the repair and maintenance.

Obviously, it’s implied that if the developer tells a strata building how to maintain common property they, prima facie, should do it as best practice.  But since NSW strata buildings repair and maintenance obligations are defined in the strata laws and by Court and Tribunal decisions by other criteria, namely keeping it in ‘a state of good and serviceable repair’ that’s probably not as strict or onerous as the developer [or supplier] specified inspection and maintenance regimes.

So, there’s a disconnect that reminds me of the 10-year capital works fund plans that NSW strata buildings must get every 5 years but can ignore.

The darker side of initial maintenance schedules

More importantly, if the initial maintenance schedule is actually provided by developers, it has a potential dark side for the strata building as its real purpose is largely misunderstood by strata stakeholders.

Since s 115(4) of the Strata Schemes Management Act 2015 permits an initial maintenance schedule to be considered in defect or damages proceedings, it effectively becomes a defence tool that can be used by developers and builders against strata buildings in defect litigation. 

In effect, a developer or builder can use the initial maintenance schedule if it is being sued for building defects to argue that since the strata building didn’t strictly follow the inspection and/or maintenance schedule precisely or at all, things like:

• the strata building should have known of the defects way earlier if they’d properly inspected things on schedule, possibly affecting claim limitation periods and/or the extent of consequential damage to the building,

• the defects would not have occurred at all to the structures if they’d properly maintained things on schedule,

• the defects would not have been as extensive or have caused as much consequential damage if they’d properly maintained things on schedule, and/or

• that the strata building didn’t undertake the maintenance strictly according to the initial maintenance schedule, and/or

• in the worst cases, that the strata building did not follow the initial maintenance schedule at all.

All of these will complicate strata building defect claims and potentially help developers and builders reduce or avoid liability.

Conclusions

Whilst it’s important that strata buildings get as much information as possible about their buildings from developers and that they use that information to better manage and maintain things, I don’t believe the NSW initial maintenance schedule assists in achieving those outcomes.

It’s an extra process that may or may not be complied with by developers. It sits awkwardly with strata building repair and maintenance obligations. And it exposes strata buildings to more potential problems with building defect claims.

So, I just can’t see how this extra process serves any useful purpose for most strata stakeholders and that the NSW initial maintenance schedules are abolished.

Instead, I’d just enforce the long-standing and more comprehensive obligations on developers under the existing strata laws properly about strata records handover properly and in a timely way.

October 31, 2023

Francesco ...