Sinking Funds

[Yorrick]

Does anyone know if there is a formula which determines the level of Sinking Fund maintained by the Management Company?

e.g Is there a ratio between the number of apartments and the fund ?

 

[shesells]

Sinking funds seem totally random in my experience. Some developments don't even have them!! We try to put at 5-10k into ours per year (80 units) but that's probably not even enough.

 

[Stupid Boy]

Believe it or not... there is a method to all the sinking fund madness... usually taken in to account are lift, fire system and plant replacement over a 15 year period with a consideration taken on carpet replacement and painting works over a 10 year period... this is usually rolled out...

I would say that a sinking fund allowing for 80 units of 10K is a good starting point, but then again how old is the development? if anything over 5 years I would be pushing to have that increased by another 5K

 

[shesells]

Our biggest expense coming up will be painting the exterior of all blocks. Most units are own door and blocks no higher than 4 floors so no lifts to worry about and no security gates either.

This year we had the option to reduce fees but opted to retain them at last year's level and up the contribution to the sinking fund. Development is 4 years old and year 1's contribution was sizeable so fund is looking okay.

The problem is there are developments - like Tyrellstown (always in the papers) where owners don't pay their fees and there isn't enough money for basic services like refuse collection not to mind saving for a rainy day via a sinking fund!