1What is a Reserve Fund Plan?
A plan as to how the Strata Company will raise sufficient funds to cover the costs to meet their strict liability to repair and maintain common property. The annual amounts required for the 10-year plan will vary between schemes, for instance, newer schemes may require relatively less money than the plans for older schemes with more repair work due.
2Does a Strata Company have to get a Reserve Fund Plan?
Yes, under s100 of the new Strata Titles Act all Designated Strata Companies are required by law to have a 10-year Reserve Fund Plan in place as defined in the Strata Titles Act. The 10-year plan must be approved by owners at a General Meeting and must be reviewed and adjusted, if required, each five years.
3What is the benefit of obtaining a Reserve Fund Plan?
A good plan should increase the value of your property by ensuring it presents well and is well maintained. Our Australian designed and owned software provides flexibility in our Reserve Fund recommendations to ensure that you
- Do not have excessive funds sitting around in the bank
- Have minimal but sufficient annual Reserve Fund contributions (no special levies)
- The owners do not have to pay levies larger than are required
4Does a Reserve Fund Plan increase the amount that owners have to pay on an annual basis?
This is not a black and white answer; each Reserve Fund Plan should reflect the individual needs of its strata or community scheme. On some occasions we have recommended a reduction in the amount being collected due to unnecessary money sitting idle in the reserve Fund account, and on other occasions an increase may be recommended if the current amount being collected is insufficient to address the projected cost requirements of repairing, maintaining or renewing the improvements and its surrounds.
5Can a Strata Company vary a Reserve Fund Plan?
Yes, it is their fund to use as they need, providing they meet their strict legal obligations to repair and maintain the common property.
6How often should a Reserve Fund Plan be reviewed?
We recommend a Reserve Fund Plan be prepared every 2-3 years.