Unit sinking funds calculation?

Hey all,

Just received my 6 monthly sinking fund bill in the mail and I'm not sure if I can justify the total. There's two sections to the payment, one is the admin fund and the sinking fund. The admin fund is nearly double the sinking fund!

So my question is, how much exactly should it be and what variables dictate the cost? Is it dependent on how much you bought the property for? How much the property is valued at now?

Many thanks
 
They relate to the running costs of the building and your unit entitlement.

Sinking fund covers budgeted long term maintenance items eg concrete cancer, window replacement, carpets, repainting, guttering etc whereas the admin fund covers the day to day expenses like building insurance, lawn/garden maintenance, concierge, lift, swimming pool, common area costs (lighting/water) etc.
 
The admin and sinking funds are determined by the OC at the general meeting ones a year.

They amounts have no connection to the value of the property but rather the need of the property for maintenance and common expenses like electricity for lighting, water, building insurance and minor repairs etc.

The sinking fund is the savings for the strata to pay for the larger capital cost items that need replacing over time. These would be things like guttering, fencing, concreting etc.

The strata should have a sinking fund report which quantifies the capital costs that are going to occur over time and the sinking fund levy should be determined on that basis.

The admin fund is generally based on the preceding years running expenses plus a margin.

Cheers
 
And if you got a dodgy strata manager who charges $1 per photocopy, together with lot holders who want strata fees as low as possible then you will see a miniscule sinking fund compared to the admin fund. 5 years down the track and the block will look shabby and attract undesirable tenants. this will futher lower rents and attract more drop kicks.

Important to get the admin/sinking funds right.
 
And if you got a dodgy strata manager who charges $1 per photocopy, together with lot holders who want strata fees as low as possible then you will see a miniscule sinking fund compared to the admin fund. 5 years down the track and the block will look shabby and attract undesirable tenants. this will futher lower rents and attract more drop kicks.

Important to get the admin/sinking funds right.

Exactly. I rarely complain about the size as long as it doesn't look insanely excessive.
 
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