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Understanding Body Corporate Disclosure Statements
In Queensland, the law mandates that sellers of lots in community title schemes provide a disclosure statement to prospective buyers before entering into a contract.
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Most bodies corporate reliably follow the sinking fund forecast income recommendation, however the ongoing balance of the sinking fund can be influenced by the following events:
The quantity surveyor would do a much better job of estimating costs than the average person, however these are still estimates and will depend on the individual contract at the time the work is required.
Sometimes the quality of a building requires that work be brought forward or delayed. The quantity surveyor will base estimates on the average maintenance life of building elements, however ongoing maintenance work, original quality, weather exposure and many other factors can mean building elements can last a shorter or longer time than the estimate.
The sinking fund forecast only considers capital repair/maintenance of the existing building. Any building upgrades (e.g. installing CCTV cameras, upgrading from chain-link fencing to timber) will be an additional cost which the sinking fund didn’t consider.
When the sinking fund forecast is reviewed every 5 years, the balance will nearly always be higher or lower (often lower) than the predicted balance. If the fund has a lower balance because of the factors above, then the next few years of sinking fund levies generally need to rise to catch up to the target.
In Queensland, the law mandates that sellers of lots in community title schemes provide a disclosure statement to prospective buyers before entering into a contract.
Understanding how your individual levy amount is calculated can help you appreciate where your money goes and ensure transparency in the management of your community. Here’s a breakdown of the aspects involved in calculating levy amounts.