I have signed a Contract on a block of 4 units which are strata-titled. The block was built in 1984-5 at a cost $170,000. The person who built the block has owned them for the whole 22 years and has recently died.
His executors are selling the block. During due diligence and disclosure, I have uncovered that a Sinking Fund has never been set up. Routine maintenace on the block has slipped in recent times and the block is a bit tired; nothing major but things such as guttering needs replacing, stairwell needs painting, stairs need re-carpeting, garage doors need painting, etc. If there was money in the Sinking Fund, then this work wouldn't be an issue but there is none.
I wish to lower the purchase price to reflect the absent Sinking Fund. How much money should one expect to be in a Sinking Fund. Is there a quick calculation that one can do to come up with a rough guide? I would be happy if someone could just give me a range.
KieranK
PS
After settlement, I will be getting a QS to calculate the Sinking Fund contributions plus a Depreciation Schedule but I would like some indication now during my negotiations.
His executors are selling the block. During due diligence and disclosure, I have uncovered that a Sinking Fund has never been set up. Routine maintenace on the block has slipped in recent times and the block is a bit tired; nothing major but things such as guttering needs replacing, stairwell needs painting, stairs need re-carpeting, garage doors need painting, etc. If there was money in the Sinking Fund, then this work wouldn't be an issue but there is none.
I wish to lower the purchase price to reflect the absent Sinking Fund. How much money should one expect to be in a Sinking Fund. Is there a quick calculation that one can do to come up with a rough guide? I would be happy if someone could just give me a range.
KieranK
PS
After settlement, I will be getting a QS to calculate the Sinking Fund contributions plus a Depreciation Schedule but I would like some indication now during my negotiations.