Question: Is it common for the admin fund contributions to be for a higher amount than the sinking fund contributions?
I have noticed our admin fees have gone up quite a bit this year, around 20%, while the sinking fund less so.
In addition, we pay around $488 per qtr for the admin fund, and around $270 per qtr for the sinking fund. Is it common for the admin fund to be more than the sinking fund?
We are a 4 lot complex of 1 bedroom older units – no lifts, no pool. Just a shared driveway.
Answer: It’s not unusual to see admin fees fluctuate and the totals contributed to the admin fund usually exceed the amount to the sinking fund.
With levies, the key factor to remember is that they are determined by owners at the AGM. At that stage, a budget is presented based on the anticipated current and future needs of the plan and owners vote on whether to approve that budget or amend it. At most AGMs, there is usually some discussion as to the general finances of the plan, spending plans for the future and why there may be changes to the rates so that owners can make an informed decision about the levy rates they are determining.
It’s not unusual to see admin fees fluctuate and the totals contributed to the admin fund usually exceed the amount to the sinking fund. However, every building and owners group is different and the structure of any individual budget will depend on the needs of the building.
The AGM notice and minutes should give you an idea of why costs may be increasing, but if that doesn’t answer the question, you can always ask the body corporate manager or committee for an explanation.
This post appears in the August 2022 edition of The QLD Strata Magazine.
William Marquand Tower Body Corporate E: willmarquand@towerbodycorporate.com.au P: 07 5609 4924