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Sinking funds or sinking ships
conference contributionposted on 06.12.2017, 00:00 by Neon AbbatoNeon Abbato
Sinking funds2 can offer major benefits to property owners including reducing possible special levies from building lot owners. These funds are important building blocks for good asset management ownership, practices and systems.Currently these funds are frequently being either misrepresented or inadequately used. This presentation demonstrates the critical importance of using sinking funds correctly and the dangers of misuse or not using them at all. This paper is not intended to be an academic study, and instead is an open discussion from a practicing facilities manager working in the property sector. Based on literature review and selected industry professional and key stakeholder interviews, this paper considers:1. The progress that has already been made in improving the adaption of reserve and sinking funds. 2. The current challenges for reserve and sinking funds and the potential impact of these for property owners and the wider community. 3. The challenges that need to be overcome to ensure sinking funds will perform as originally intended for buildings with multiple ownership. The outcomes of this paper is to raise the awareness of sinking fund problems and promote discussion on how to resolve them.