When you buy a strata title, you’ll be required to pay certain levies, which go into two different funds. Here’s what they are and what they’re used for.
In a strata scheme, owners corporations will have similar expenses to typical homeowners – things like maintenance and repairs in shared spaces and water and electricity in common areas.
To this end, owners corporations in the ACT are required to set up two different funds: the administrative fund and the sinking fund. Here’s what each is used for:
This fund is reserved for the day-to-day operations of a strata building. Things like paying the pool cleaner, buying lights for the entranceway and repairing broken exercise equipment would all come from here.
The sinking fund, on the other hand, is used for more long-term expenditures, such as a re-paint or the transition to fibre internet across the building.
Even though a strata building may not be undergoing a renovation project, it’s important that the sinking fund always has enough money in it should something need to be done. This eliminates the need for a major levy later on when larger expenditures are required.