Short answer
The capital works fund (once called the “sinking fund”) is the money a scheme saves over time for major, long-term expenses — like repainting, re-roofing, or replacing a lift. Owners build it up gradually through their levies so big-ticket items don’t land as one sudden bill.
Why it exists
Major strata costs are large but predictable. Setting money aside a bit each quarter avoids hitting owners with a huge special levy when the roof or lifts finally need replacing. A healthy capital works fund is one of the clearest signs of a well-run scheme.
The 10-year plan
The owners corporation must maintain a 10-year capital works fund plan — a forecast of the major works coming up and how much to set aside for them. It’s what turns “we’ll deal with it later” into a funded plan.
Kept separate from the admin fund
Capital works money can’t be spent on day-to-day running costs (or vice versa) without a formal resolution and a plan to repay it — see Admin Fund vs Capital Works Fund.
Keeping the fund on plan
Tracking the fund against a 10-year plan, quarter by quarter, is exactly the kind of thing a system does well. A self-managed scheme can run its capital works plan with a system such as Straita — seeing what’s held, what’s coming, and whether contributions are on track — so the committee just approves the plan.
Primary sources
- Strata Schemes Management Act 2015 (NSW) — the capital works fund and the 10-year plan.
- NSW Government — Strata schemes (Fair Trading) — the capital works fund.