One of the most valuable tools a strata community can have is a Sinking Fund Forecast. This document acts as a roadmap for the future, outlining what work needs to be done, when it should happen, and how much it is likely to cost.
A well-prepared plan usually covers major works such as roof repairs, repainting, lift servicing, driveway resurfacing, or structural improvements. By forecasting these needs over the next decade, the committee can set contributions to the capital works fund that align with future requirements. This proactive approach helps avoid sudden levy increases or unexpected special levies when a major project arises — protecting owners from financial shocks and reducing the personal pressure on committee members when difficult funding decisions are needed.
Having a clear, forward-looking plan also builds confidence. For current owners, it demonstrates that the community is organised, financially responsible, and committed to maintaining the property. For prospective buyers, a Sinking Fund Forecast provides reassurance that there won’t be unpleasant surprises around the corner — which in turn helps protect and even enhance property values.
It’s important to remember that a Sinking Fund Forecast is not a “set and forget” document. Conditions change, costs fluctuate, and priorities shift. Reviewing the plan regularly — at least every five years — ensures it remains relevant and realistic. By keeping it updated, the committee stays in control of the community’s future and avoids the pitfalls of reactive, last-minute decision-making.
Helpful Tips for Committees and Owners
1. Start early and be realistic
The earlier a scheme creates a Sinking Fund Forecast, the better prepared it will be. Even a simple plan provides a starting point that can be refined over time. Be realistic with cost estimates — underestimating today can mean financial pressure tomorrow.
– Example: One scheme underestimated the cost of repainting by 30%. When the project came due, the shortfall forced a sudden special levy. Updating the Sinking Fund Forecast with realistic figures would have avoided the shock.
2. Use professional input
While committees know their building, engaging a professional consultant ensures that nothing is overlooked. Experts can identify issues like waterproofing, concrete spalling, or lift upgrades that might not be obvious to owners. For a relatively small cost, professional input also removes much of the personal risk from volunteer committee members — ensuring decisions are based on independent, qualified advice rather than personal judgment alone.
– Example: A consultant’s inspection revealed early signs of roof damage that the committee hadn’t noticed. Fixing it early saved the community thousands in avoided water damage, and gave the committee confidence that they had acted responsibly.
3. Review and communicate regularly
A Sinking Fund Forecast only works if it’s kept up to date and shared with owners. Committees should review it every five years (or sooner if major works arise) and communicate updates clearly. This helps owners understand where their levies are going and builds support for long-term investment.
– Example: A community that published a simple yearly “maintenance snapshot” alongside their AGM papers found owners were far more supportive of levy increases, because they could see how the funds tied into future projects.
FAQs About 10-Year Maintenance Plans
Is a Sinking Fund Forecast required by law?
In some states it is mandatory, while in others it is strongly recommended as best practice. Even where it isn’t required, most communities benefit from having one.
What happens if we don’t have a plan?
Without a plan, communities risk being caught unprepared for major expenses. This often results in sudden special levies, strata loans or deferred maintenance, which can harm property values and create tension among owners. Committees may also face greater personal pressure when urgent but unplanned works arise.
How often should the plan be updated?
Best practice is to review it every five years, or earlier if there are major changes in costs, building condition, or legislation.
Who prepares the plan?
Committees can draft one themselves, but many choose to engage professional consultants or building inspectors for accuracy and completeness. The small cost of professional preparation is far outweighed by the peace of mind it brings and the reduced risk to committee members personally.
Does a plan guarantee no special levies?
Not always, but it greatly reduces the risk. A good plan allows communities to set realistic contributions in advance, making unexpected levies far less likely.
In short: A Sinking Fund Forecast is one of the best ways to protect your community’s finances, property values, and peace of mind. By planning ahead, seeking expert input, reviewing regularly, and communicating clearly, committees ensure their building is ready for the future — without unwelcome surprises or unnecessary personal risk for those volunteering on the committee.