As the effects of the new Strata Laws (NSW) come in, some older buildings are going to really have to get their act together to properly plan for the required 10year Sinking Fund Plan, as introduced back in Feb 2005. The main aim of the 10-year sinking fund plan provision is to assist owners corporations in building up sufficient financial reserves so that expensive capital expenditure can be paid for when needed. The theory is that this will overcome the need to ask lot owners to pay large, one-off levies, any time a sinking fund expense arises. Sinking funds are used to pay for such expenses as: painting of the building replacement of fencing driveway refurbishment/hard landscaping replacement of common property items such as carpets, roofing and guttering lift overhauls/refurbs Since this law was introduced, however, a further regulation was gazetted in April 2006 with the aim to widen the net and bring even more Strata Schemes under the new section of this Act (Strata Schemes Management Act 1996). Schemes will be included in four phases, based on the scheme’s age (and thus its strata plan number). Phase 1 Strata plan no. 50,000 and above (not including those already covered by Section 75A) will be required to commence 10-year sinking fund planning from 1 July 2006. Phase 2 Strata plan no. 30,000 – 49,999 to commence from 1 July 2007. Phase 3 Strata plan no. 10,000 – 29,999 to commence from 1 July 2008. So watch out all you NSW investors who have older buildings with these strata plan no's. Personally, I think it's high time that such plans were introduced, as investors can sometimes find themselves up for unwanted stress and increased costs in shoddily run strata buildings. The owners corporations need to be organised, well run and above compliance in order to maintain value in these buildings.