FAQs
What is a sinking fund?
A sinking fund is a deposit of money designed to provide strata owners corporations with the financial reserves they need to cover major building repairs or any unexpected or large maintenance expenses.
Money is paid into the sinking find in several different ways.
- Direct contributions from the strata owners, paid quarterly to the body corporate.
- Interest from the investments of the sinking fund.
- Any insurance payouts for strat property that has been destroyed or damaged
Sinking funds work as a savings plan for strata schemes and by putting aside money in advance, they ensure that strata property owners don’t have to pay huge, one-off levies whenever an emergency cost arises or major capital works are required.