Hi,
Could someone please explain the sinking fund in regards to strata fees. Are part of the strata fees allocated to this fund? What is a 'healthy' amount for the sinking fund?
Any other tips on strata fee's etc would be much appreciated. I am looking at purchasing a new unit (detached) and want to be knowledgable in this area so as to avoid problems/confusion. The property is in WA.Thanks
The fees you pay on a Strata Title unit comprise of the administration and sinking fund and the amount of each is shown in the Disclosure Statement prepared by the Body Corporate Manager.
The admin fund looks after the day to day running of the block including things like insurance, grass and garden maintainance, postage, BCM fees etc etc.The sinking fund is a provision for capital expenditure and obviously would be greater as the building gets older.
The amount of each will vary depending on the number of units in the block but the amount held in the sinking fund will have a bearing on your sale price. Obviously if there is sufficient funds to enable the owners to carry out expenditure without having to call on the unit holders for extra money this is more advantageous.
Richard Taylor | Australia's leading private lender
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