Compliance and Fiduciary Responsibility
Your duty, simplified.
Embedded within the legal requirement of establishing a capital works/ sinking fund lies a profound obligation that reaches beyond a mere formality.
Given that these funds are held on trust for all lot owners, the committee is entrusted with the mantle of trusteeship, necessitating compliance with varying trustee legislation depending on your State.
Implicit within this legal framework across States is the steadfast mandate that these entrusted monies be managed with care, diligence and skill characteristic of a prudent person in business.
Relying exclusively on term deposits, though seemingly secure, may expose a concerning vulnerability -
the erosive impact of inflation over time, which diminishes the actual value of your assets.
Similarly, opting for a generic "Balanced" or "Conservative" portfolio overlooks the crucial factor of the timing required for expense related cash flows.
This oversight could potentially place your investments in an ill-suited position, needlessly exposing them to avoidable risks. Such oversights not only jeopardize prudent financial management but also run the risk of contravening the fiduciary duty held by the committee.