Question: Should replacement of trees be included in the sinking fund budget? We have $5000 in the admin budget to cover garden needs. Our sinking fund forecast has budgeted $4000 a year to replace trees for the next ten years. This seems excessive!
Answer: ‘Replacement of trees’ – is it part of the routine maintenance of the scheme, or is it a specific project of some kind?
There is no definitive list classifying expenditure items into the admin or sinking fund. There is always some room for interpretation when categorising expenses to one fund or the other. Speak to a hundred body corporate managers about this, and you will probably get a hundred different answers.
Still, according to the BCCM website, money in the sinking fund can be spent on:
- big or one-off items, like painting or structural repairs to common property
- replacing major items, like common property fences or carpets
- other items that should reasonably be met from capital, like pool furniture.
Meanwhile, money from the admin fund can be spent on anything that is not required to be paid from the sinking fund, including:
- regular maintenance of the common property
- insurance charges
- administrative expenses—such as secretarial fees and postage.
So, there may need to be some consideration of what you mean by ‘replacement of trees’ – is it part of the routine maintenance of the scheme, or is it a specific project of some kind? If it is the latter, it would usually be a sinking fund expense.
This post appears in the April 2023 edition of The QLD Strata Magazine.
William Marquand Tower Body Corporate E: willmarquand@towerbodycorporate.com.au P: 07 5609 4924