Owners’ corporations in Victoria should be mandated to establish funds to help residents carry out emergency repairs while insurance claims are being processed and bring them into line with others states, according to Strata Community Australia (Vic).

It says the recent east coast storms shows the need for such funds to offer immediate relief to owners of damaged properties.

“We’re very concerned that Victorian owners’ corporation communities aren’t in a position to financially deal with the unpredictable nature of Australian weather,” GM Rob Beck said.

“Living in Australia often means being exposed to wild weather events, and communities need to go a step further than simply relying on their insurance policy to save the day.”

He says jurisdictions in NSW, Queensland, the ACT and SA already require maintenance or “sinking” plans and funds. Victoria, WA, Tasmania and the NT are the exceptions.

“The current threshold levels for when maintenance plans and maintenance funds are required for Victorian prescribed schemes is those with annual fees in excess of $200,000, or more than 100 lots,” Mr Beck told insuranceNEWS.com.au.

“All buildings, not just the biggest, have capital items that will need to be repaired and replaced to maintain the value and integrity of the building for the benefit of all owners and residents.

“For owners to save for that rainy day, and avoid the financial burden of immediately payable one-off levies to enable urgent repairs to be carried out, is good governance and should be encouraged.”

Mr Beck says the Victorian Government is currently reviewing its strata laws following pressure from Strata Community Australia (Vic).

The body has outlined a schedule for the Government to consider. It includes requiring owners’ corporations with more than 50 lots to implement the plan by the end of the stated first year.

“Strata Community Australia (Vic) recommends requiring maintenance plans and maintenance funds for all schemes,” he said.

Residents should consider speaking to a professional owners’ corporation manager if the State Government does not move forward with the fund plan, Mr Beck says.

“Owners’ corporation communities don’t have to wait for the regulatory say-so to set up maintenance funds – they can start financing their future needs today.

“The ugly truth is there’s no guarantee there won’t be a major event this weekend that creates more chaos, so we hope State Government decision-makers and owners’ corporation communities alike move quickly to see this issue overcome.”

Strata Community Insurance MD Paul Keating says the emergency repair fund proposal is logical, because two-thirds of breakages relate to maintenance and repairs.

“On that ratio, it makes sense, especially with older buildings,” he told insuranceNEWS.com.au. “The bottom line is that the current Owners’ Corporation Act (2006) has provisions within it for the establishment of a maintenance plan. However, those provisions are not compulsory to adopt.

“I’ve been an owner of strata and I think it’s prudent and good governance to have reserves set aside to deal with matters that require quick attention. That is because of the statutory duty to maintain and repair common property.”

The Insurance Council of Australia says residents should keep their insurers informed of any repairs they intend to carry out.

“If a strata property is damaged in a severe weather event, its insurer will assess the claim and commence approved repairs as swiftly as possible,” GM Communications and Media Relations Campbell Fuller told insuranceNEWS.com.au.

“Owners’ corporations that wish to organise repairs to property that they intend to later make an insurance claim on should first contact their insurer. Unauthorised work may not be covered by the insurance policy.”