Using Sinking Fund to fund fire defect repairs

[Elderflower]

I live in a large apartment complex with a number of blocks requiring fire stopping repairs.

The works need to be done in 2 phases as there is not enough money to pay for the entire complex at once.
The OMC are proposing that we use the majority of the sinking fund to fund the cost of the works needed.
There are some larger blocks than others, with costs significantly higher than others.
OMC are suggesting that the larger blocks are done first which would leave us with aprox 40K left in our sinking fund.

Would it be wiser to do the smaller blocks first and therefore more in the sinking fund or are they right in doing the larger ones first as it may significantly reduce insurance costs and savings here used for getting the rest done in the following years.

Has anyone any experience or advice on this/ Pros and cons

 

[BizIreland]

Just a warning as most management committees are not qualified to know the risks legally, so make sure legal agreements are in place before work is carried out. I have come across this before where there was damage to properties in apartments/duplexs and not enough funds to cover everything. Funds were paid by sinking fund and due to be paid from future service fees. Stupidly, the management company paid for repairs to some buildings in full from sinking funds without any legal agreements in place. Once repaired, the first batch of properties were sold by their owners immediately. They were sold without incurring any of the costs to fix their properties (effectively every other owner paid for it) and there was no legal agreement in place to force repayment of moneis from the sale.

 

[elcato]

Once repaired, the first batch of properties were sold by their owners immediately. They were sold without incurring any of the costs to fix their properties (effectively every other owner paid for it) and there was no legal agreement in place to force repayment of moneis from the sale.

but they hoodwinked the buyers rather than the management company as the annual fees were allowing for future funds. The new owners would have to fund it.

 

[RetirementPlan]

I thought I posted on this previously, but perhaps not.

I'd be worried about one group of owners getting preference on the sinking fund over another group. What happens if the work costs more than expected, so one group of owners gets sorted out while another group is left hanging, with the sinking fund emptied out.

I'd be looking for some kind of legal certainty that the benefit of the fund is shared equally for all owners, over the longer term.

 

[peemac]

Is one possibility a levy on all apartments paid over say 3 or 4 years.
This levy combined with the sinking fund pays for the repairs.

The annual management fee can be reduced by an amount close to the levy. Possibly funding could be then be borrowed based on the levy so that the entire works could be done together.