The Administrative fund is used for the day to day and reasonable spending of the body corporate. This can include the following:
- Strata Management Agreement expenses
- Onsite Manager/Caretaker Agreement expenses
- Repairs and maintenance expenses for common areas
- Other expenditure of a recurrent natureand Insurances.
The Sinking Fund is applied towards items such as:
- Spending of a capital or non-recurrent nature
- The periodic replacement of major items or a capital nature.
The Sinking Fund can be used for items such as painting of a building, or common area assets that requiring replacement.
Your body corporate is also required to reserve enough funds to meet anticipated major expenditure for at least 9 years. This is calculated through a Sinking Fund Forecast.