From 1 April 2026, NSW strata schemes are now required to use a standard form when preparing, reviewing or replacing their 10-year capital works fund plan. NSW Fair Trading has also introduced a Capital Works Fund Planner through Strata Hub for strata plans up to 6 lots to help schemes create compliant long-term forecasts. The reforms are designed to improve consistency, encourage better financial planning and reduce the likelihood of owners’ corporations being caught off guard by major future repairs.
In principle, that makes complete sense. But in practice, this is where many strata schemes face their biggest challenge.
The Problem Is Not Usually The Plan
Most owners’ corporations understand that buildings require ongoing maintenance and future investment. Roofs need replacing, waterproofing systems fail, lifts age, concrete deteriorates, fire systems require upgrades, external painting and major plant eventually become unavoidable expenses. The issue is rarely whether owners understand this. The real challenge is whether schemes can realistically afford the funding levels recommended in the report. With many owners already dealing with rising insurance premiums, interest rates and general cost of living pressures, levy increases are often difficult conversations at AGMs.
Questions like these are common:
- “Can we reduce the increase?”
- “Can we delay the project?”
- “Do we really need that much in the fund?”
These are fair questions. A capital works fund plan should never be treated as a document that owners blindly accept without scrutiny. In fact, scrutiny is important.
“As Far As Practicable”
Under NSW legislation, owners’ corporations are required, “so far as practicable”, to implement their 10-year capital works fund plan. That wording matters because it reflects the practical realities of strata governance. It does not mean schemes can simply ignore the report because levy increases are unpopular. Equally, it recognises that plans may need to evolve as circumstances change. Projects may become more urgent than expected. Costs may increase significantly. Funding strategies may need to be adjusted to manage affordability concerns across the scheme. What matters most is that decisions are informed and properly considered.
If a scheme decides not to follow a recommendation within the report, there should be a clear reason behind that decision. Updated expert advice, revised project timing or affordability concerns may all be valid considerations. The important thing is that the owner’s corporation understands the implications of the decision being made.
A Financial Planning Tool, Not Just A Compliance Document
Underfunding does not remove the future cost of maintaining a building. More often, it simply delays the issue until the works become more urgent, more stressful and significantly more expensive to resolve. This is why yearly reviews of capital works fund plans remain critical. A report should not be approved, filed away and only revisited when the scheme urgently needs funding for major repairs. It should remain part of the ongoing budgeting and decision-making process each year.
Ultimately, a capital works fund plan is more than a compliance requirement. It is a long-term financial planning tool designed to help owners’ corporations make informed decisions about the future condition and sustainability of their building. Because in strata, shared ownership also means shared responsibility.