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I’ve finally convinced the owners we need to start a sinking fund and that we need to start paying electronically rather than in cash.
We’re a small OC in Victoria (<10 units) and I was wondering what bank account other OCs use?
I see the need for two different accounts, i.e. general funds and sinking fund but would like to make it as simple as possible.
I also want a low fee account that can be accessed via the internet.
So how does your OC handle this and what bank would you recommend?
Also, anything to be aware of?
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Hi VicRes, Our OC went electronic a few years ago. It had a lot of benefits previously we had to run around and get two signatures on checks and statements were only really available to the Treasurer.
Here are the features that the bank was able to easily set up:
First there the account had two sub accounts; 1) an on call account for payment of ongoing maintenance. 2) the other a high yielding interest account for one off capital type projects. These roughly equal the maintenance and sinking funds but we occasionally transfer between them.
We don’t ask the treasurer or owners (when they pay fees to pay sinking and maintenance into the different accounts as that would add an extra layer of complexity. In NSW the legislation doesn’t require ‘separate accounts’ just ‘separate accounting’ for each so once a year when the accounts are prepared for the AGM we account and say how much belongs to each fund.
The bank account allows electronic payments via bpay, EFT etc. The accounts are set up so that certain Owners have access to initiate and and authorise payments. Every payment from an account requires two electronic signatures from different authorised Owners. Importantly, every owner can at any time: view the balances and transactions; and pay their fees in.
Which bank?
I ask because at the moment Macquarie is the largest provider of banking services to strata schemes (or strata managers) and others may not be set up to cope with, say, a change of treasurer.
But if you have a viable alternative, let’s hear about them.
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The OC didn’t open a new bank account.
Our strata opened a business account with the Newcastle Permanent a long time ago. It just approached the Newcastle Permanent and asked if we could move to electronic transfers and what was involved. The features they could offered us we more than adequate.
For a business account I would imagine signatories changes all the time as people leave a business.
No that is not correct – strata schemes are not registered with ASIC. They are legal entities by virtue of the Strata Schemes Management Act.
Do not open an account in your own name, that is asking for trouble. Aside from anything else, it is not your money.
What scotlandx says is correct.
Strata Schemes do not have to ”register with ASIC” – not sure what as?
The suggestion by VicRes that all the Strata monies be paid into his personal bank account would amount to a perception of fraud.
Open one bank account in the name of the Owners Corporation. 2 signatories on all cheques. Arrange for all owners to pay levies direct to the account. 2 persons to be given electronic access to the account for paying all expenses electronically.
This seems to be a case where some professional advice should be obtained.