If you live in an Owners Corporation in New South Wales, your scheme will be required to have a Capital Works Fund.
The money in a Capital Works Fund can be spent on several different things such as:
- major painting to common property;
- basement car park marking;
- repair concrete roadways and driveways;
- replacement motor to basement;
- replace stormwater pumps;
- re-carpeting common areas;
- lift replacement;
- And more!
Essentially, a Capital Works Fund is a plan for the future.
In New South Wales, the Owners Corporation is required to prepare a plan of expected major expenditure to be met from the capital works fund. The plan is for a 10-year period that commences on the first Annual General Meeting of the Owners Corporation. This is required to be reviewed at least every 5 years.
Considering the involved process, it is not a surprise that Owners Corporation Committees prefer to invest in a qualified Quantity Surveyor to prepare 15-year Capital Expenditure forecasts to give committees the broadest possible overview of future expenses.
What happens if my building does not have enough in the Capital Expenditure fund?
Although it does not happen often, in some cases a Capital Expenditure fund is found to be underprepared when a major emergency occurs at the scheme. In these cases, a special levy can be raised alongside the regular levy.
For more information about your scheme’s capital expenditure fund, contact your Community Manager.