Sinking Fund Establishment & Management

Sinking Funds, legislated in the Community Titles Act as mandatory, are separate funds established for the provision of funding for works and especially major works of a non-recurrent nature. Once established and where the contributions to maintain and increase the fund is provided for in the annual budget, this enables the Body Corporate to build up a “savings” or “investment” fund to accommodate those high expense long term works projects;

• Projects such as painting, building upgrades, lift upgrades, and balustrade replacement to name a few, are examples of non-recurrent expenditure.
• Establishing the Fund can simply be determined by applying a fixed percentage (minimum 5%) of the budgeted Administration Fund expenses as a contribution rate.
• Body Corporates with more complex building structures and high rise developments will require the guidance a Quantity Surveyor as a qualified person to undertake a Sinking Fund Analysis. This is a professional approach to determining the life expectancy of the various components that comprise the building and plant and then budgeting for the replacement or refurbishment over a given time schedule.
• Munro Property Group Corporation Managers work closely with Quantity Surveyors, Engineers, Builders, Contractors and other service providers to establish indicative long term budgets for major and non-recurrent works and that information is applied to manage the Sinking Fund contribution rates.
• Munro Property Group invests all Sinking Funds on a higher interest bearing facility within the Trust Account so as to enable investment without minimum balance or minimum term limitations.
• Munro Property Group does not charge a Funds Investment Fee or Charge.
• Monies can only be transferred from or to the Administration Fund by resolution of the members at a properly convened general meeting.
• No bank charges are applicable to transfers between Funds.