Sounds like seller+seller lawyer is trying to scam your sister. "Unutilized sinking fund" is nonsense.

Sinking fund, by definition, is an emergency fund for the condo. Obviously they won't utilize all lah, otherwise RIP if condo need emergency repairs or big maintenance.

If they did not pay advance, only monthly payments, then the sinking fund "unutilized" is their duty as a strata title resident to pay up.

They want to claim back any kind of condo-related fees, they need to claim back from MO, because that's THEIR money not your sister's.