A Comparative Analysis of Australia’s Sinking Fund Governance within a Strata Scheme

摘要

In recent years a number of issues have arisen within Australia's built environment regarding strata title sinking funds and their relationship to the standard of housing stock. In particular, focus has centralised on the emerging problems associated with inadequately maintained amenities in strata title buildings. Primarily the purpose of the sinking fund is for long term capital improvements and maintenance relating to the common property of strata schemes. Therefore, if the sinking fund is inadequately costed and budgeted, the consequential impact on depleted amenities in strata schemes will invariably lead to: poor quality maintenance; deterioration of common property; lower standard of living for the occupiers; potential loss of appreciated value on the real property; and also a lower rate of return for the property investor. Currently, the regulatory regime applying to sinking funds is established at the state and territory level and the varying regimes demonstrate significant inadequacies and inconsistencies. The purpose of this paper was to undertake a national comparative analysis of current and proposed legislation applying only to sinking funds, in order to evaluate the potential effectiveness of the regime. The research methodology applied in this instance was action research. Action research is regarded cyclic, where there is intention or planning before the action, and then a review or critique after the action. This methodology has cycles of defining the problem, identifying the action or possible solutions followed by reflection and testing and in the case of governance, implementation and changes towards existing policy and legislation. The research which focused on the strata schemes sinking fund requirements within each jurisdiction concluded that the development and implementation of a 10 year sinking fund plan would relieve the burden for a strata owner being charged an unexpectant special levy. Long term planning and forecasting would mitigate the cost of upkeep and maintenance of the building for the “future-generation owners” of the already existing strata schemes.