How much should a capital works fund have in it?
NSW law does not set a minimum dollar amount. It requires the owners corporation to have a ten year capital works plan, so the real test is whether the current balance is on track against that plan.
Buyers often go looking for a rule of thumb — "should be $X per lot" — and there is not a reliable one. A six-unit walk-up with no lift, no pool and a new roof needs a fraction of what a thirty-year-old tower with a lift and a plant room needs. The number is meaningless without the building.
The Strata Schemes Management Act 2015 requires a ten year capital works fund plan, reviewed at least every five years. That plan is the benchmark. Comparing the balance to the plan answers the question; comparing it to another building does not.
So the question to ask is not "is $14,300 enough?" It is "what does the ten year plan say should be in there by now, and why is there a gap?"
Three signals that a fund is under-provisioned regardless of the headline number:
- Levies have been held flat for several years while costs rose.
- Large recent expenditure — a roof, a lift upgrade — that drew the balance down with no plan to rebuild it.
- Known future work with no provision: cladding, fire doors, remediation ordered but deferred.
And one that is often misread as good news: a very low levy. Cheap levies in an ageing building usually mean the cost has been deferred, not avoided. You will meet it as a special levy instead.
What to ask
Copy these into an email. The people below can answer them; we can’t.
- To your strata manager: may I see the ten year capital works plan, and does the current balance track it?
- To your strata manager: what major works are forecast in the next five years, and how will they be funded?
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Related
General information about what these documents say — not legal, building or financial advice, and not a substitute for your conveyancer, solicitor or licensed inspector. Law and practice change, schemes differ, and your contract may say something different from the general position described here.