Forum: Allow public access to sinking fund records
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I refer to the article “ Some ageing condos in Singapore struggle with failing infrastructure, inadequate sinking funds
Singapore’s condominium market is a vital part of our housing landscape, yet a crucial piece of financial information remains hidden: the financial health of our management corporation strata titles (MCSTs). While all MCSTs are currently required to submit their maintenance fund and sinking fund details to the Building and Construction Authority (BCA), this data is not publicly accessible. It’s time for this to change.
I propose the creation of a public, national database that provides a five-year rolling information of maintenance fund and sinking fund balances and budgets for every MCST. While prospective buyers can currently pay for the right to inspect accounts, this process is cumbersome and may be costly. A central database would democratise this vital information, offering significant benefits for everyone.
This database would encourage a culture of financial prudence. All too often, subsidiary proprietors (SPs) at annual general meetings (AGMs) will collectively vote against a larger sinking fund contribution because it means they have to pay more – a short-sighted approach.
With a public database, current SPs will understand that severe under-collection and a low sinking fund balance will deter potential buyers, directly impacting their development’s attractiveness and value. This creates a powerful incentive to make responsible, long-term financial decisions.
This is a matter of fairness. When an MCST fails to adequately fund its sinking fund, earlier residents enjoy well-maintained facilities like lifts and pools without paying their fair share. The burden of a large special levy then falls on later buyers, akin to a game of musical chairs where the last person to sit down gets the penalty.
The database would also serve as a powerful governance tool. Many of the approximately 25 per cent of the over 3,600 MCSTs in Singapore not managed by a professional managing agent may lack the expertise to budget effectively. They could use this database to compare their collections with similar-sized, aged or located condos, providing a valuable benchmark to ensure they are collecting enough.
To complement this, the BCA should conduct and publish a study on how many MCSTs are under-collecting sinking funds, along with national averages of meaningful metrics like the average sinking fund collection per share value in a commercial MCST in the CBD area with a building age of between 10 and 15 years.
Broken-down facilities like lifts may mean more than inconvenience – they could also be a health and safety issue. Imagine the delay caused in evacuating an injured or ill resident when the lifts are down. Thus, it is time for BCA to study this matter of making MCST finances transparent with the aim of building a more informed, fairer and healthier strata living environment for all.
Benjamin Ng C.K.
