Byron Bay Sinking Fund Report. A Sinking Fund Report is a forecast of anticipated common area maintenance expenditure, also known as a 10 Year Budget for Strata Titled Property. eighty8valuers are located in the Northern Rivers, NSW, in addition to our property valuation arm, we have an in-house Quantity Surveying division which provides Sinking Fund Forecast Reports.
All strata schemes are required by law to have a 10 year Sinking Fund Forecast in place (see Strata Schemes Management Act 2004). This means that Owners Corporations must plan how they will repair and maintain common property and raise adequate funds to cover the costs. The 10 year plan must be approved by owners at an Annual General Meeting (AGM) and must be reviewed and adjusted, if required in the first five years.
The Owners Corporation must make a resolution at each AGM for an amount to be credited into the Sinking Fund for the following 12 months and must levy each owner for their contribution.
The total Sinking Fund amount is divided by the total number of unit entitlements. This amount is then multiplied by each owner’s unit entitlement.
Purpose of the Sinking Fund
The purpose of a Sinking Fund Forecast Report is to provide a Sinking Fund Forecast for the Owners Corporation to allow sufficient monetary reserves for the long term maintenance and repair of the common areas of the building as well as replacement of common property items in accordance with the requirements described in the NSW Strata Schemes Management Amendment Act 2004.
The aim is to ensure that the Sinking Fund levies indicated will provide the Owners Corporation with sufficient information to plan their finances to minimise the future risk of insufficient funds for expensive repairs to the property.
Reports project the likely levies within a ten year period. Current legislation requires the forecast be reviewed every five years. However, we recommend that an annual review of the Sinking Fund Forecast be under taken by the Strata Commitee to incorporate any changes arising from extraordinary expenditure, inflation, local market factors and the general condition of the building.
The Sinking Fund Forecast provides the necessary funding requirements to facilitate repair and when necessary, replacement to the original standard of the common property items that are the responsibility of the Owners Corporation.
The report covers expenditure of a capital or non-recurrent nature including periodic replacement of major capital items and other spending that may reasonably be met for capital. However, it does not include expenditure on capital improvements such as extensions.
As qualified Quantity Surveyors, we determine the expected life of the items indicated and the years until replacement, to the best of our professional knowledge.
Reports are completed by Matt Benson who draws on 20 plus years of building experience and historical construction data. Matt has completed construction projects in the ACT, NSW, QLD and the NT. In addition to being a licenced Builder, Matt is also an Australian Taxation Office approved Quantity Surveyor. The key points regarding the Sinking Fund Forecast Reports are:
- Matt inspects the property and completes the report himself
- Our lump sum quote includes a physical inspection of the property
- Reports are completed in reference to the NSW Strata Schemes Management Amendment Act 2004.
- When appropriate, we contact your Property Manager and organise the inspection directly