If your Cyprus complex committee and residents wish to avoid that sinking feeling that accompanies the surprise of unexpected costs, a sinking fund needs to be considered a vital part of your plan. While regular complex costs for scheduled maintenance, cleaning and admin can (and must be) budgeted for, the cost of breakdowns, damage and renewals are likely to be much harder to financially quantify until they occur.
From repainting apartment blocks and fixing lifts to repairing leaking roofs and swimming pools, by their very nature, such items can be mind-bogglingly costly. It doesn’t take a rocket scientist to work out that unless there is a separate fund available for such eventualities, it will then fall to the committee to press the residents to meet the cost. The disadvantages of this “closing the door after the horse has bolted” approach will be all too obvious to those who have experience in residential complex committees.
Who is responsible for your sinking fund?
Due to its financial nature, the creation and maintenance of a Cyprus complex sinking fund are administered at the committee level. It must be ratified under committee law and instituted by vote during the AGM, ideally at the committee formation stage. However, a sink fund protocol can be created and/or amended at any time provided it is done within the existing legal framework. It is at this time that amounts and the frequency of how often the funds are collected from each resident must be agreed.
Calculating the size of your sinking fund
While it isn’t uncommon for sinking funds to be abruptly set up in response to a sudden financial crisis, planning provides the benefit of prevention over the often more costly option of a cure. Some of the key factors to consider will be the size of a complex (number of residents), its age/current condition and how realistically affordable the cost is likely to be as a part of each resident’s fixed fees.
Dealing with the challenges of creating and managing a sinking fund
Without a crystal ball, calculating how much unforeseen breakdowns, breakages and other unexpected costly events might impact finances can be nothing short of bewildering. Add to that the challenges of selling the cost of something that hasn’t happened yet (and maybe never will) to residents who will be expected to pay for it. With these things in mind, it’s easy to see why organising sink funds can so often be fraught with difficulties that lead to disputes between residents and the committee.
How to do it once and do it right
If all of the above sounds like a great deal of hassle, that may be because to the uninitiated, it is! Here at Lee property services however, we have already assisted numerous complex committees in setting up and managing their sink funds. Not only that but thanks to the extensive experience of our team we can advise realistic estimates that will keep both your committee and residents satisfied. Call us now on 23831194 or visit our website at https://www.lee-ps.com/to discover the difference that working with professionals can make.