Funding common property expenditure in multi‐owned housing schemes

Abstract

Purpose

The purpose of this paper is to advance a set of criteria for appraising the merits of alternative options to financing common property capital expenditure in multi‐owned housing (MOH) complexes and to then draw on this conceptual framework to determine which mode of common property capital expenditure funding is preferable.

Design/methodology/approach

A priori reasoning has been provided to pursue the study's objective.

Findings

Sinking funds represent the preferred approach to financing common property expenditure in MOH schemes and special levies are the least preferred approach.

Research limitations/implications

Due to the a priori based conceptual development undertaken, some subjectivity is bound to be invoked.

Practical implications

The study provides key insights to government policy makers charged with drafting MOH legislation and provides strong support for those jurisdictions that require sinking funds to be raised in MOH complexes. The study also informs the owners executive committees of MOH schemes of the benefits of maintaining sinking funds.

Social Implications

The study highlights the considerable MOH unit owner financial distress that can be averted by pursuing a policy of raising sinking funds.

Originality/value

The study has immense originality, as it is the first academic study to focus on MOH common property capital expenditure issues.

Citation

Arkcoll, K., Guilding, C., Lamminamki, D., McManus, L. and Warnken, J. (2013), "Funding common property expenditure in multi‐owned housing schemes", Property Management, Vol. 31 No. 4, pp. 282-296. https://doi.org/10.1108/PM-09-2012-0031