Sinking and Reserve Fund Forecasts
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Legislation makes it mandatory for every Body Corporate to prepare a Sinking Fund Forecast. The Sinking Fund Forecast is based on estimates of spending of a capital nature or non-recurrent nature. The Sinking Fund forecast must allow for raising the necessary capital amount, to provide necessary and reasonable spending for major works in the present financial year; create a reserve for anticipated major expenditure for the next 10 years.
The forecast must be for a minimum of 10 years and it is a statutory requirement that the provisioning be done properly. This is where QBM can play a vital role.
It is a requirement of the Act that any Sinking Fund Forecast be kept refreshed and current, so it will be a representative of the state and status of the building and all common property.
If the Sinking Fund report has not been updated for a number of years, it will almost certainly not be representative of the funding needs of your complex. So it is likely that the Body Corporate will be under-funding the Sinking Fund, ie. Not saving enough. The consequences of this could be serious.
You can meet every Sinking Fund Forecast requirement with the help of QBM. We will work with you and your committee to devise a forecast that covers all your needs.
