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[basjan27]

Hi..

Several members of the OC have recently found out that our Admin fund is seriously in deficit.  There are funds in our Sinking fund that would just cover the deficit. 

The EC refuses to respond to our enquiries (through the SM) about how the deficit will be recouped (it exceeds the Admin levies for the entire year), how it was caused and whether they will call a special levy to pay for it.

Is there any way we can require the EC to provide the OC with information regarding our finances?  Can they continue to pay admin costs out of a fund that is in deficit?  Can they borrow from the Sinking fund without the approval of the OC?

Thanks

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[Billen Ben]

If nobody wants to be transparent then Section 108 of the Strata Act allows owners to search the records of the OC. This includes the current financial records that the OC is required to keep.  To get an idea of what financial records can be accessed you can start by looking at section 103 of the Strata Act and then refer to clauses 5,6 and 7 of the Strata Regulation 2010. These indicate that you should be able to look at everything the EC/SM has spent money on if they are keeping proper records.

It will take a bit of time but that should reveal where the money went.

 

My SP ran our admin budget into deficit, i doubt the Treasurer even knew until the audit report came out. Money was then transferred from the sinking fund to the admin fund to cover the hole. The money from the sinking fund was never returned via the required special levy. What can ya do?

 

Section 71 of the Strata Act says

(2)  However, an owners corporation may disburse money by transfer from its sinking fund to its administrative fund or by meeting from its sinking fund expenditure that should have been met from its administrative fund if the owners corporation complies with subsection (3).

(3)  The owners corporation must, not later than 3 months after the disbursement, make a determination under section 76 (1) of an amount sufficient to recoup the amount of the disbursement.

 

So if they (the EC/SM) are still spending on admin costs and the admin fund is empty then they are spending sinking fund money and they have, to put simply, 3 months to put it back. If they do not put it back (probable EGM and special levy) then you can play “the chocolate wheel” and see if CTTT cares or not.

You are not in a good situation when the EC, and or manager, are not being transparent and there are financial issues such as deficits that people are hiding.

Good luck with it.

[Author]

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