What is a Sinking Fund, and how does it work?

What is a Sinking Fund, and how does it work?

The OMC must establish a sinking fund within three years after transferring ownership of the development from the developer to the management company. This fund is used for one-time maintenance and renovations in multi-unit buildings. The fund is made up of the annual contributions made by unit owners to the fund. According to the MUD Act of 2011, the minimum amount to be contributed to the fund each year is €200, or an amount agreed upon by the members of the OMC. The fund’s money must be kept in a separate account from the management company’s main account.