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Topic
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In the past our Strata had a limit on what the Executive Committe could spend without approval which I believe can be set under the Strata Titles Act Section 21 (2).
At our Annual General Meeting recently, a limit was argued against by the majority and now we don’t have one. Things were said such as ‘ten grand doesn’t go very far these days’ and it was thought emergency plumbing repairs might be held up, for example, by having a limit on spending as a General Meeting would be needed to get something like a sewerage leak fixed.
I am uncomfortable about this generally, but particularly as we have a couple of big Common Property refurbishment projects coming up and a series of, in my view, frivolous Executive Committee ‘pet projects’ carried out recently.
What to do?
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Costa – under the provisions of Sects 68 and 71 of the NSW Strata Schemes Management Act (the Act) the only payments that can be made from the Funds of the Owners Corporation are those for which an estimate (of that expenditure) has been made in the respective Budgets under the “items and matters” shown there.
Strata Managers generally try to overcome Sects 68 and 71 of the Act by having broad categories such as “General Repairs” and “Building Replacements” in the Budgets, thereby hiding otherwise specific items and matters within.
Notwithstanding, and even in the absence of any limit on its committal expenditure, the E/C cannot authorise expenditure on projects such as those to which your post refers unless an estimate of the expenditure on those projects appears in the approved Sinking Fund Budget, and even if such estimates have been made, E/C’s of Plan’s >100 Lots (only) still cannot authorise expenditure on any item or matter if that would cause the corresponding estimate in the Budget to be exceeded by ≥10%, unless that limitation as prescribed in Sect 80 of the Act has been specifically removed by the O/C at the preceding AGM.
Hopefully one of the above provisions will be applicable to your Plan’s circumstances.
It’s not unheard of that AGMs resolve to remove the ‘10% over budget’ spending limitation for ECs. We do so every year. Better that than have to call an EGM to pay an electricity bill. If your EC acts responsibly & reports back to lot owners every month on how the budget & finances are going you should feel comfortable about how your levies are being spent.
Why don’t you attend a few EC meetings & get a feel for what’s going on, have your say? One person’s frivolous pet project is another’s necessity.
