Who gets the sinking fund money if you buy an entire block of strata units?

This is correct. If the body Corp is cashed up you might be in for a windfall.

 

You seem to be the only person who's really got my point. If a body corp is cashed up might as well take the money, keep some in case of emergency and use the rest to pay down principal on the mortgage, maybe pay for the mortgage for a while, or even use it as money for another deposit.

 

Yes. Absolutely. In theory the amount of money in the sinking fund should be priced into the sales price of each unit. But to the extent it's not priced in, yes if you own all units it's yours to keep

 

We have 2 strata blocks in Sydney obviously they have registered body corporate's but we just maintain the blocks ourselves. We also pay pay the insurance be it that it is in the BC's name (or number more correctly). If you ever have to make a claim it gets a little tricky as they issue the check in the name of the BC. I did manage to talk them around but they were going to send out a cheque and we don't have a BC bank account and not about to get one.

My mate has townhouses in Brisbane and he has exactly the same, no need for a management company etc as per NSW.

As far a getting at the money from the existing BC you just do a distribution. Some enterprising business types were doing a tax dodge with a Strata in Sydney where they contributed excess funds charge it to their business and then redistribute the excess to them personally as the unit owners.

Just regarding the comment where a strata block was bought and the vendor distributed the BC funds to the new owner. Why on earth didn't they do a distribution to their unit holding before the sale or even at the time of the sale. It was their money be it in a different name.

As for the OP buying a block one at a time can be a very slow process. Even more frustrating is that you can't improve the block whilst waiting as you will just push up the eventual buy price. Also the motivation of buying the whole strata just to get hold of the Strata funds seems misplaced the purchase should stand on its own with the Strata funds just a bonus.

Cheers

 

Reminds me of the sharks buying businesses in the 90s (?), and breaking up profitable companies to get the excess money sitting in the pension funds out.

 

This is a good point, if you purchase any single unit and then start going after the others, or all at once, you would want to ensure that the BC didnt distribute the majority of funds back to the current owners prior to settlement

 

If you own all, you are the body corporate you make the rules.
There is nothing to discuss and negotiate between unit owners.

 

Would it also depend on how savvy the existing owners of the individual units are?

If I owed a unit in a complex someone came along wanting to buy the whole lot, I'd pretty pretty annoyed if I'd been paying into a sinking fund for years that became cashed up as the cash was never spent on anything, or nothing needed repairing for it to be spent on, I'd be looking to get a good chunk of my payments back whether by factoring into my sale price for my individual unit or negotiating a disbursement amongst all the owners if a complete block was for sale.

Seems a little unfair to pay into essentially a forced savings scheme for maintenance that becomes moot when the block is sold and you get none of it back or have seen nothing repaired & maintained to the extent of the funds you've been paying in.

 

It would be pretty sensible for the existing Lot Owners to unanimously resolve to distribute all funds as surplus, back to themselves, prior to settlement - during that window while they're still the Owners.

Of course, the contract under which the buyer is buying all the Lots might include a restriction preventing that, but if the Lot Owners (sellers) hadn't clicked that they're losing the funds they'd saved, and hadn't priced it into the sale before reading that clause of the contract, you'd expect someone to be smart enough to realise that during contract review.

Or do I have too much faith in people?