A Sinking Fund Forecast (SFF) must be provided by all bodies corporate for compliance with the relevant legislation governing property management. The purpose of the SFF is to determine and set annual contributions to the Sinking Fund such that foreseeable expenses can be met. This information is also useful to lot owners and potential buyers to ensure transparency of incumbent property costs.
The SFF must cover a period of at least ten years and must be regularly monitored and updated at least every two years. Specifically, the Body Corporate and Community Management Act (Standard Module) Regulation 1997 Section 94. (3) states that:
A Sinking Fund Forecast must allow for raising a reasonable capital amount both to provide for necessary and reasonable spending from the sinking fund for the financial year, and also reserve an appropriate proportional share of amounts necessary to be accumulated to meet anticipated major expenditure over at least the next ten years, having regard to:
- Anticipated expenditure of a capital or non-recurrent nature; and
- The periodic replacement of items of a major capital expenditure; and
- Other expenditure that should reasonably be net from capital.
Star Building Management Services produces its SFF in-house using our own specifically developed software and professionally qualified staff using a database of over 400 buildings to ensure that our forecasts are accurate and comprehensive. The Star Building Management Services SFF is compiled in user-friendly, non-technical terms that can be readily understood and acted upon by the Body Corporate.
