What is a Sinking Fund? Why am I being charged?
A sinking fund is a legal requirement as set by the South Australian government for Community Titled properties (that is, those properties established under the Community Titles Act 1996) to build funds toward their future maintenance.
A community corporation must establish a sinking fund (for non-recurrent expenditure only) and an administrative fund (for all other expenditure) [ss 116(1)-(2)].
Non-recurrent expenditure is expenditure for a particular purpose that is normally made less frequently than once a year [s 3(1)]. Recurrent expenditure is expenditure for a particular purpose that is normally made every year or more frequently [s 3(1)].
Money received by a corporation, including contributions of lot owners, must generally be credited to the sinking or administrative fund according to the purpose for which
the money will be used [s 116(4)].
The levies for your corporation are determined by the owners at each Annual General Meeting and then set at those levels for the next 4 quarterly payments until the next Annual General Meeting.
While all owners are invited to attend meetings, we recommend attending and being a part of the decision making for your corporation where you will hear first hand what is important to your fellow owners and understand why they have set the levies at the amount they have selected.