Over the last few years, leasehold reform has been about giving owners more rights, more information and more say in how their building is run and how the service charge is spent. That is good, and it was overdue. But one question keeps getting missed: who is accountable for caring for these buildings over the long term?
A block can be open, democratic and run by its own residents, and still be short of money and slowly falling apart. Full access to the accounts will not mend a leaking roof, and a meeting that votes for a new lift has not yet found the money to buy one. Owners who know more about their building do not automatically end up with a better-kept one.
Why a block of flats needs a long-term maintenance plan
A block of flats is a long-term asset. Roofs, lifts, boilers, windows and fire safety systems all have a working life we can roughly predict, and each one will need a large sum at some point. Yet when a service charge budget is set, the question is usually “what can people afford this year?” rather than “what will this building need over the next thirty?” Short-term thinking wins, and the repairs wait. A long-term maintenance plan, paid for steadily through a reserve fund, is how a building gets ahead of that.
How other countries plan for major repairs
Some places no longer leave this to chance.
- In the Netherlands, every owners’ association has to put money aside each year for major maintenance, either by following a long-term maintenance plan or by saving at least 0.5% of the building’s rebuild value.
- In Ontario, Canada, condominium corporations must commission a reserve fund study at least every three years, looking at least thirty years ahead.
- In New South Wales, Australia, every strata scheme needs a 10-year capital works fund plan, reviewed at least every five years.
England has no general rule like this. Whether a block builds up savings depends on what the lease says.
Why major works bills should not be a surprise
Most of us would not buy a car and then act shocked when the tyres and brakes need replacing. We put something aside because we know it is coming. Buildings are no different. When a large bill lands after major works it feels like an ambush, but the need was visible years earlier.
What the next stage of leasehold reform should do
Reform now needs to go further than moving control from one set of hands to another. We would like to see it encourage reserve funds, proper long-term maintenance planning for repairs and replacements, and a way of running buildings that rewards looking after them well. It should also value managing agents for the professional advice they give owners when these decisions are made, rather than seeing them only as the people who send out the demands.
Rights, openness and accountability matter, and they need to stay. But they have to go hand in hand with responsibility. In ten years’ time, owners will care less about how many meetings were held than about whether the roof is dry and the lift is working.
How Darcy helps with service charge budgets and reserve funds
Our service charge accounting includes budgeting and reserve fund planning for the buildings we manage. If you would like to see where your building stands, get in touch.
General information, not legal advice. Sources for the figures above: Rijksoverheid (Dutch government), VvE: money for major maintenance; Condominium Authority of Ontario, What is a reserve fund; NSW Government, Strata levies, finances and insurance.