This topic contains 2 replies, has 3 voices, and was last updated by Jimmy-T 3 months ago.

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  • #36585
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    johnny red tips
    Flatchatter

    I’ve got an AGM coming up.

     

    The proposed Capital Works Fund (CWF) budget forecasts shows a balance at the end of the year of $190k. The CWF 10 year plan, drawn up in 2014) shows a balance of $670k (and increasing year on year)- due in the main to a lift upgrade costing ~$500k. As the Plan shows a balance increasing year on year the expenditure on the lifts can’t simply be an expenditure being brought forward from future years. Is there a requirement to actually keep (within reason) to the EOY balances as forecast in the Plan?

    • This topic was modified 3 months ago by Jimmy-T.
    #36587
    Lady Penelope
    Lady Penelope
    Strataguru

    To my knowledge there is no requirement as such. The budget projections are more of an advisory nature rather than mandatory.

    However, if your scheme does not have enough money when the lift needs replacing then a Special Levy and/or a strata loan will be required.

    The 10 year CW plan must be reviewed at least every 5 years so your scheme’s CW plan is due for a review. This hopefully will focus your committee’s attention to the deficit that your scheme is facing.

    #36590
    Jimmy-T
    Jimmy-T
    Keymaster

    There is no legal requirement to either prepare a professionally assessed capital works fund (formerly the sinking fund) or to strictly finance the estimates that are prepared.  That’s why so many buildings discover they have a shortfall in their finances when things start to go wrong.

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