Capital Works Fund Forecasts

Capital Works Fund Forecasts

Owner’s Corporations of Strata Plans (buildings in unit complexes) are required to have in place a 10 Year Capital Works Fund Forecast (previously called Sinking Fund) to ensure that sufficient funds are set aside each year to cover costs of common property items that deteriorate over time.

Our Capital Works Fund Forecast reports contain all information required in the prescribed form under Clause 171 of the Strata Schemes Management Regulation 2016, helping Owners Corporations meet their statutory planning requirements.

Without adequate planning, Owner’s Corporations may face significant shortfalls when major building components and common property assets require repair or replacement. This can result in costly special levies for owners or, alternatively, deferred maintenance that can lead to building deterioration, safety concerns and a reduction in property values.

At Quanto, we prepare comprehensive Capital Works Fund Forecasts to help Owner’s Corporations plan for future expenditure, establish appropriate annual contributions and maintain the long-term condition and value of their buildings. Our forecasts provide a practical financial planning tool to support informed decision-making and the effective management of strata assets.

It is now law for NSW Strata Plans to have two funds in place (Strata Schemes Management Act NSW 2015):

  • Administrative Fund – for day-to-day maintenance of common property items, small repairs, insurances and other recurring expenses
  • Capital Works Fund – for replacement of common property items that deteriorate over time.

Quanto are experts in preparing Capital Works Fund Forecasts for any Strata Plan, whether it be a residential duplex, a multi storey high rise apartment building or industrial warehouse development. Quanto carry out inspections for all our reports to identify and estimate costs for each and every item to be included in the report and assess their condition and expected life.

Contact Quanto today or ask your Strata Manager to contact us for a quote on your Strata Plan’s 10 Year Capital Works Fund Forecast. Quanto’s coverage for Capital Works Fund Forecast reports include Newcastle, Sydney and the Greater Hunter region

Frequently Asked Questions

What items are covered in a Capital Works Fund Forecast?

Common property items covered in a Capital Works Fund Forecast can include:

  • Driveways
  • Fencing
  • Roofing
  • Gutters
  • Downpipes
  • Carpet
  • Floor tiles
  • Fire equipment
  • Lights
  • Lifts
  • Painting
  • Balustrades

How do you assess each item’s condition, expected life and replacement cost?

We carry out an inspection on the building/s and identify all common property items that will need replacing over time. We assess each item’s condition and determine an expected life for both the existing item and its future replacement. We then estimate its replacement cost in today’s prices and make allowances for future price increases using a Building Cost Index.

The information for all items is added to Quanto’s tailored software to determine the amount each lot owner needs to contribute to the Capital Works Fund to have funds available when each item needs replacing.

When does a new report need to be prepared?

A Capital Works Fund Forecast must be reviewed every 5 years according to the Strata Schemes Management Act. When we review a report, we undertake a new inspection and re-assess each item’s condition and whether items have been replaced.

It may be that certain items have been well maintained and their expected life is longer than the initial report. It also may be the case that an item will have deteriorated faster than expected in the initial report. New items may have also been added or old items removed. This is all taken into account when a report is reviewed.

Contact Quanto if you have any questions about your current Capital Works Fund Forecast.