Cleaners, our silent Heroes

Everyday we struggle a little under the constraining measures of the circuit breaker. We cannot visit shopping malls; they are closed. No dining with friends. Young ones bemoan no bubble tea. And even younger ones cry for their playgrounds. Only when we are done with the complaining, we begin to realise the important stuff that matters has continued as normal.

All around me, Food and Cleanliness is uninterrupted. Supermarkets operate. Hawkers and restaurants continue to feed take-away patrons and supply delivery riders. The condo estate remains clean and litter-free. Even the pathways are swept clear of fallen leaves every morning.

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Sinking funds tell ‘a tale of two cities’

A number of people who are on the hunt for their first condo home have asked many questions on online forums and via face-to-face conversations. Leasehold or Freehold? Facilities, residential profiles, monthly maintenance fee, etc. Within that monthly maintenance fee lies two components; the managing fund (MF) and the sinking fund (SF).

https://www1.bca.gov.sg/docs/default-source/docs-corp-regulatory/building-maintenance-and-strata-management/smg1-concept-of-strata-living.pdf

In other words, the SF takes care of the big items in the near future, while MF runs a monthly expense to keep the condo operational. Therefore it is crucial to find out what are the SF reserves an existing condo have. And whether it is financially stable to fund future works. If not, an extraordinary AGM may be called for all owners to cough up a lump sum. (see Case study: Killer lifts?)

One advice for first time condo buyers: ask the seller for the recent AGM booklet. Reading it will give you an excellent idea of how well the place is managed. And whether the existing sinking funds are sufficient to cover outstanding and future liabilities.

Take the case of Viz Holland and Citylights. Both are 99 year leasehold condos; built in 2008 and 2007. On first look the key difference is that Viz Holland has 165 units, while Citylights have 600 units.

(From past years AGM, actual SF contributions differ slightly due to increment in some years)

In the span of 12 years, Citylights would have collected $8,396 from a unit owner. Viz Holland would have collected $9,240 from a unit owner since its beginnings. Yet, a chunk of Citylights sinking fund has already been spent and only 37% of total collections remain. What does it mean? Bear in mind things like lift overhauls, pipes and pumps replacement, roof works can easily cost $100k- $1 million, especially over the 10 year mark.

Whereas for Viz Holland, 70% of the sinking fund remains to be deployed. The numbers do look much better and prudently managed. The question to ask then is whether Viz have done their 10 year replacement items? If not, when is it due? And what is the financial impact?

Again the details can be sourced from the Seller and verified with an on-site visit. If all things are equal, then clearly one is far better than the other. Go see for yourself. Caveat emptor.

Condo Managing App provides transparency real-time

A french start-up is using an app to help owners manage their residential buildings, akin to strata titled condos in Singapore. Seems like a great solution for Condo owners who prefer to stay out of sight but in-the-loop.

“Matera has built a web-based platform to view information, communicate with other co-owners and make sure everything is up-to-date. Everybody has their own account and can access the platform. Co-owners meet regularly to handle outstanding issues. Matera centralizes all topics, helps you write a report and checks that it complies with legal requirements.

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Case study: Killer lifts?

Once in a while we hear of killer litter offences. Yet there is another high-rise danger lurking; the killer lifts are often forgotten. (Some say killer pools.) These silent killers have a stranglehold on our finances through high maintenance and a large one-off sum for replacement at the end of their life spans.

We look at an example of an almost two decade old condo in District 21, with approximately 341 units. In the AGM previously, a list of facilities were drawn up to highlight their replacement costs due in the coming 3-5 years. They amounted to almost $11.5 million!

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