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Upgrading a strata building is no small task. Whether it involves replacing outdated infrastructure, improving energy efficiency, or addressing long-overdue repairs, a major building upgrade requires careful planning, broad consensus, and a sound financial approach. For strata owners and committees, the process also comes with legal and procedural obligations that must be clearly understood and managed.

Unlike minor repairs or routine maintenance, a building upgrade can significantly enhance a property's value, extend its usable life, and improve the comfort and safety of residents. This article outlines key considerations that strata owners must weigh before committing to a major building upgrade.

Understanding Major Building Upgrades

Major building upgrades refer to significant works that go beyond everyday repairs or minor improvements. These are often capital-intensive and disruptive over the short term, but ultimately valuable for long-term building performance, aesthetics, and market competitiveness.

Examples include:

• Full or partial roof replacement
• Replacing or modernising lift systems
• Upgrading electrical, plumbing, or HVAC systems
• External façade repairs or cladding remediation
• Energy efficiency retrofits such as solar installation or double-glazing
• Accessibility improvements like ramps or automatic entry doors

Such upgrades may arise from necessity—due to safety issues or non-compliance with current building codes—or they may be driven by a desire to improve amenity, sustainability, or asset value.

Voluntary upgrades, such as facade beautification, require owner buy-in and financial planning. In contrast, mandated upgrades (e.g., fire safety system overhauls) must be actioned within legal timeframes, often with penalties for non-compliance.

Common Triggers for Considering an Upgrade

Several factors can prompt an owner's corporation to initiate major building works. Recognising these triggers early helps committees take a proactive, planned approach rather than reacting under pressure.

Ageing Infrastructure and Systems

Buildings age like any asset. Infrastructure such as plumbing, wiring, lifts, and roofing will eventually fail if not replaced or significantly upgraded.

• Typical wear and tear can lead to increased repair calls, occupant complaints, and disruptions to everyday use of the building.
• Deterioration of key systems, like corroded pipes or failing elevators, becomes more frequent in buildings over 20–30 years old.
• Visible signs such as water ingress, cracking, rust, or mould often indicate underlying issues requiring major rectification.

Ignoring these signs may not only reduce the building’s habitability but can also increase long-term costs due to emergency repair premiums or structural deterioration.

Building Compliance and Legal Obligations

Legislation and building codes evolve, and many older buildings no longer meet current standards. These may include:

• Fire safety regulations requiring updated alarms, egress systems, or sprinklers
• Combustible cladding compliance, which involves high-risk façade materials identified under national guidelines
• Energy efficiency standards that impact commercial components of mixed-use buildings

Failure to meet these standards could expose the scheme to legal liability, insurance issues, or council orders for urgent rectification.

Rising Maintenance and Operational Costs

Older systems often cost more to operate and maintain than modern alternatives. Indicators that an upgrade may be more economical than continual repair include:

• Frequent contractor call-outs and rising repair invoices
• High utility bills due to inefficient lighting, HVAC, or insulation
• Increasing insurance premiums due to risk factors such as outdated fire systems or poor maintenance records

In many cases, the return on investment for upgrading outdated systems can be realised within a few years through reduced running costs and improved asset value.

Steps to Take Before Committing to an Upgrade

Proper planning is essential to avoid delays, cost blowouts, or disputes. Before committing to major works, the owner's corporation should follow a clear due diligence process.

Condition and Risk Assessments

The first step is understanding the current condition of the building. This is achieved through:

• Independent building inspections by qualified engineers or consultants
• Dilapidation reports to assess structural integrity
• Thermal or acoustic testing if the upgrade aims to improve comfort or energy performance
• Defect identification, particularly in buildings under warranty

These assessments offer an objective basis for scope definition and help prioritise work based on safety, compliance, and cost-effectiveness.

Consulting with Strata and Legal Professionals

Professional guidance at this stage can avoid costly mistakes later. Key advisors include:

• Strata managers, who can advise on procedural obligations, funding history, and historical works
• Solicitors, who may be needed to interpret strata law or draft meeting motions and contract terms
• Quantity surveyors or cost consultants, who provide preliminary costings and funding advice
• Local council officers, particularly if development consents are needed

Legal clarity is especially important where works are large in scale or potentially controversial within the community.

Understanding Owner Expectations

Strata is a shared form of ownership, and any upgrade must consider the best interests of the building. Committees should:

• Conduct surveys or information sessions to gauge sentiment and educate owners on the rationale and scope of the project
• Identify concerns around cost, disruption, or necessity early in the process
• Encourage feedback to inform project scope and communication strategies

Transparent engagement builds trust and increases the likelihood of meeting approval thresholds when formal voting is required.

Funding and Financial Planning

A major upgrade must be financially viable. Committees need a funding strategy that balances financial prudence with the timely execution of work.

Funding Options and Levy Considerations

The most common funding mechanisms include:

• Sinking funds accumulate contributions over time for capital works. These funds must be regularly reviewed through 10-year capital works forecasts.
• Special levies, raised through owner resolutions for one-off projects. These often require majority or special resolution approval and may be paid in instalments.
• Strata loans are unsecured loans repaid via future levies. These allow work to commence sooner, with costs spread over time.
• Grants or rebates are sometimes available for energy upgrades or accessibility improvements through state or local programs.

Each option comes with pros and cons, particularly regarding affordability, timing, and owner equity.

Cost Forecasting and Risk Allowances

Accurate budgeting is essential. Estimates should consider:

• Detailed costings, including design, permits, construction, and contingency funds (typically 10–15%)
• Inflation and market volatility, especially for materials and labour
• Staged implementation, where upgrades are spread over time to manage the financial burden

Allowing for unexpected costs ensures that the project remains financially sustainable even in the face of delays or scope changes.

Project Planning and Governance

Clear project governance reduces the risk of delays, disputes, and cost overruns. Committees should formalise their approach to managing the upgrade.

Developing a Clear Project Brief

The project brief sets out the purpose, scope, timelines, and performance expectations. A good brief includes:

• Objectives and benefits of the upgrade
• Key deliverables and success indicators
• Constraints such as budget, regulatory limits, and access restrictions
• Project schedule with key milestones

This document helps align consultants, contractors, and committee members around shared goals.

Engaging Qualified Professionals

Upgrades should only be undertaken by licensed, experienced providers. Depending on the scope, this may include:

• Engineers or architects, to design or specify works
• Project managers to oversee the execution and coordinate teams
• Building certifiers, to ensure compliance with the Building Code of Australia
• Contract administrators to manage contracts and performance standards

Hiring qualified professionals reduces the risk of delays, defects, and legal disputes.

Forming a Committee or Working Group

For larger projects, it is useful to create a dedicated upgrade committee responsible for the following:

• Liaising with service providers
• Communicating with residents
• Reporting to the main strata committee
• Monitoring costs and timelines

This group acts as the operational arm of the owner's corporation and helps streamline decisions while maintaining transparency.

Strata Renewal: When Is It the Better Option?

In some cases, the cost of upgrading an old building may outweigh the benefits, especially when safety, compliance, or liveability are compromised. Strata renewal laws offer a legal pathway for full redevelopment.

Thresholds for Full Redevelopment

Under NSW legislation, strata schemes can collectively decide to sell or redevelop a building if:

• At least 75% of owners (by unit entitlement) vote in favour
• A detailed renewal plan is prepared, showing financial, planning, and legal impacts
• All procedural safeguards, including valuation and mediation steps, are followed

Redevelopment may be the best option when a building has major defects, low valuation, or no longer meets residents' needs.

Process and Requirements for Renewal Projects

The renewal process includes:

1. Preparation of a strata renewal proposal
2. General meeting to vote on developing a renewal plan
3. Professional valuations and feasibility analysis
4. Submission to the Land and Environment Court for approval if 75% support is obtained

While complex, renewal offers a fresh start and can deliver long-term benefits such as higher valuations and better amenities.

Summary and Final Considerations

Major building upgrades are complex but essential for maintaining safe, functional, and desirable strata properties. They require a combination of technical planning, financial rigour, and stakeholder engagement. Key takeaways include:

• Understand why the upgrade is necessary and what it involves
• Conduct professional assessments and seek legal clarity early
• Create a financial plan that suits the building’s current and future needs
• Ensure transparent communication and owner involvement throughout
• Establish clear project governance with qualified advisors

Strata communities that plan proactively are better positioned to enhance asset value, minimise disputes, and deliver lasting outcomes for all owners.

How Strata One Can Support Your Upgrade Journey

Planning and carrying out a successful strata-building upgrade demands a combination of experience, structured coordination, and a strong understanding of regulatory requirements — and that's exactly where we come in. At Strata One, we guide you through every phase of the upgrade journey, from assessing the building’s current condition and defining the project scope to engaging trusted consultants and licensed contractors.

We assist with financial planning, including levy structuring, and provide support to your committee to help streamline communications and decision-making across all stakeholders. Whether you're undertaking a specific improvement or considering a broader renewal strategy, we’re here to provide practical advice and comprehensive support every step of the way.

Get in touch with Strata One today to start your building upgrade process with clarity, structure, and confidence.