Plan for a Ten Year Sinking Fund 28/06/2006
Sinking funds, the monies set aside by strata titled property owners corporations, are being brought into line by recent regulations calling for the greater enforcement of ten-year plans.
According to Mr Richard Tooker, a senior NSW strata property specialist, the revised regulations concern owners’ corporations or their nominated experts in devising a ten-year management plan according to a slow roll-out over the next three years.
“The change is designed to enhance the establishment of sinking fund expenditures to better meet the needs of the future for a greater range of properties that fall under the Strata Schemes Management Act.
“The Act was amended last year to apply to strata schemes registered on or after February 2005. This newest regulation, announced in April, will slowly bring the schemes that were established at an earlier date into line with modern provisions for forward planning. By the first of July 2009 it will cover all strata plans.”
The sinking funds are important as they establish levies which result in funds being collected for future use in covering strata buildings capital expenditures.
Adequate funding results in sufficient funds being amassed to pay for any capital work further down the line. It can ensure a strata titled building is well maintained, protecting the buildings’ future value for its owners and dispelling any worry that a ‘special’ levy may be necessary to meet some future need.
Mr Tookers Company, New South Wales Strata Management, whilst being one of the States larger providers of strata services, does not directly prepare sinking funds estimates. But the Company says it provides an oversight role for those owners corporations who might wish to make certain that they are in full compliance, and can recommend capable valuers with the expertise necessary to establish a viable ten-year plan.
Sinking funds, he says, must be scheduled for review within each five year period, adding that owners corporations can if they wish review their plan annually and thus extend its term.
According to the Office of Fair Trading, the time frame for compliance will see strata plans numbered 50,000 and over affected from 1 July 2006, plans numbered 30,000 to 49,999 by 1 July 2007, plans numbered 10,000 to 29,999 by 1 July 2008 and plans one to 9,999 by 1 July 2009.
New South Wales Strata Management (formerly Gilmour Strata Management) commenced business in early 1991, as a member of the highly respected J A Gilmour & Sons group of companies. Licensed solely and specialising only in strata management services, the company has steadily grown to become one of the largest such organisations in New South Wales.
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