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Patterns of Maintenance Expenditure

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In an unpublished Master’s Thesis Sarah Hudson, (An analysis of the expenditure of residential strata schemes in NSW, University of New South Wales, 2011) conducted an exploratory study into patterns of expenditure of residential strata schemes by surveying a sample of scheme accounts. The major finding was seemingly quite intuitive, especially to those who have visited numerous strata buildings, namely;

Buildings dominated by owner occupiers spend more on maintenance than buildings dominated by investors.

Whilst this analysis looked at how much was spent per lot the value of this information is limited without extensive benchmarking and matching the expenditure against what might be the reasonable requirements of specific buildings. Whilst every building has different circumstances it nevertheless notable for the lack of benchmarks or even crude rules of thumb against which owners can reach some conclusions about the value for money they may be achieving in general for their levies and more specifically about the appropriateness of maintenance that is routine and that funded by sinking fund contributions.

That owner occupied dominated buildings spent more on maintenance than investor dominated buildings may not be saying all that much, and of course this study was exploratory in nature. Owner Occupied buildings maybe:

  • Less reliant on caretakers and other third parties to identify maintenance problems,
  • More focussed on maintaining the aesthetic aspect of their building and gardens
  • Have more engaged committees that are more aware of day to day maintenance issues.
  • More focussed on the long term “pay off” of ensuring the building is well maintained.
  • Have a greater propensity to consider upgrades or outright improvements as part of their sinking fund expenditures.

by Gary Wilson, Executive Committee member

      Unit News Online:
        April / May 2017

 UNO Apr May 2017


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