How do sinking fund contributions and special levies work?

Saving funds through regular sinking fund contributions or raising a special levy carry with them the comfort and perceived security of familiarity. They also provide flexibility and freedom for owners corporations to choose their ongoing suppliers or contractors without third party restrictions.

However, what owners corporations must also consider is the funds currently available in their sinking fund and the time it may take to raise sufficient additional funds to carry out the necessary improvements. Waiting to build adequate funds in their sinking fund can lead to a delay in works and potentially increased costs. The opportunity cost to some lot owners of paying a special levy alongside their capacity to pay the levy, are also key considerations for this type of funding.

Was this article helpful?
Can't Find what you're looking for? Contact Us