Funding common property expenditure in multi‐owned housing schemes

Abstract

PurposeThe 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/approachA priori reasoning has been provided to pursue the study's objective.FindingsSinking funds represent the preferred approach to financing common property expenditure in MOH schemes and special levies are the least preferred approach.Research limitations/implicationsDue to the a priori based conceptual development undertaken, some subjectivity is bound to be invoked.Practical implicationsThe 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 ImplicationsThe study highlights the considerable MOH unit owner financial distress that can be averted by pursuing a policy of raising sinking funds.Originality/valueThe study has immense originality, as it is the first academic study to focus on MOH common property capital expenditure issues.