In the face of rising costs, many community title schemes across South-East Queensland are attempting to cut corners by delaying or skipping critical building maintenance. While this may seem like a cost-saving measure, it often backfires, putting both the body corporate and property owners at serious financial and legal risk.
Legally, bodies corporate are obligated to maintain common property. Failure to meet this obligation can result in costly and prolonged legal disputes. Importantly, the breach doesn’t occur when an issue is first identified but rather when maintenance is intentionally denied or the property is allowed to fall into disrepair.
Despite these legal requirements—and the potential safety hazards—many aging buildings continue to defer essential upkeep in an effort to shield owners from the impacts of rising living costs. With recent changes to Queensland’s Body Corporate and Community Management Act, some bodies corporate are even considering delaying maintenance to justify terminating the scheme on economic grounds.
However, this strategy could lead to long-term consequences, far outweighing any short-term savings. Neglecting maintenance is not only risky but could also result in financial ruin, especially when repair costs spiral or legal actions are taken. Now, more than ever, maintaining your building is not just a legal duty—it’s a critical part of safeguarding your financial future.
Why Deferring Maintenance Could Lead to Financial Ruin: Lessons from a Recent Gold Coast Ruling
A recent ruling involving a Gold Coast community title scheme has sent a clear message: a body corporate cannot neglect its maintenance obligations, even when considering terminating the scheme for economic reasons. While the term “economic reasons” remains vaguely defined in legislation, it refers to situations where schemes face severe financial hardship due to falling property values and skyrocketing maintenance costs. However, this does not give bodies corporate the right to deliberately defer or suppress necessary maintenance in an attempt to “stack” future costs and justify a termination under the guise of economic hardship.
Proactive Maintenance vs. Reactive Crisis Management
Case law has long emphasised the importance of proactive and preventative maintenance. In fact, waiting until urgent repairs are needed can already be considered a breach of a body corporate’s obligations. This was evident in the recent Gold Coast case, where the building in question had major structural and fire safety issues that had been acknowledged by both the Gold Coast City Council and the Queensland Fire and Emergency Service. Despite enforcement notices being issued over a prolonged period, little action was taken.
A building consultant deemed the property “not fit for habitation,” highlighting the severe risks it posed to both occupants and the public. The consultant also warned of the serious legal liability the body corporate would face due to its failure to maintain the building. These concerns were validated in front of an adjudicator, reinforcing the notion that maintenance cannot be deferred indefinitely without serious consequences.
The Financial Fallout: A $10 Million Repair Bill
As a result of ongoing neglect, the body corporate is now legally required to undertake extensive remedial work. A remedial builder must be engaged immediately, and the estimated cost to fully repair the building is around $10 million. With insufficient funds in the sinking fund, owners are now facing significant out-of-pocket expenses to cover the shortfall—expenses that must be paid within the next six months.
This case is a stark reminder of the importance of having an appropriately forecasted sinking fund budget. Relying on expert advice to guide maintenance planning is critical; otherwise, schemes risk allowing their common property to fall into disrepair. Poor financial planning can lead to legal action from other owners within the scheme, as well as substantial and unanticipated special levies when courts order repairs, regardless of the body corporate’s financial position.
The Ripple Effect of Deferred Maintenance
Deferring maintenance is akin to leaving a disease untreated. What may start as a simple decision to postpone painting or resealing can quickly escalate into water ingress, concrete cancer, and structural instability—issues that can cost millions to fix and may even result in evacuation orders. A body corporate committee should not wait for a crisis to act; maintenance must be an ongoing priority.
Think of your building like an athlete preparing for the Olympics. A peak performance athlete doesn’t start training just a week before the event—they begin years in advance, building and maintaining their fitness consistently. The same long-term mindset should be applied to building maintenance. From day one, a proactive, sustainable approach is essential to ensure the enduring value and safety of the property.