› Flat Chat Strata Forum › Finance, budgeting and loans › Who decides on donations? › Current Page
This is an interesting question and the strict interpretation of strata law might be that if donations aren’t in the annual budget, or a requirement of by-laws, then they shouldn’t be made.
Section 73 (4) of the Act, says on Admin funds (my emphasis):
(4) Amounts payable from fund
An owners corporation may pay money from its administrative fund only for the following purposes—
(a) payments of the kind for which estimates have been made under section 79 (1),
and
(d) other payments in connection with exercising its functions under this Act or the by-laws …
My building recently made a contribution to a “fighting fund” which was part of a campaign to allow owners corporations to pass and enforce by-laws without them being overturned in court as being discriminatory because one person or a minority disagreed with them.
The politics behind this are irrelevant (if widely publicised) except that it engendered strong opinions on both sides, with some people seeing the campaign as re-establishing our right to run our buildings as we see fit while others saw it as an attempt to by-pass the checks and balances that the law provides.
As far as I know, this was not in the budget, and neither was there a provision for such payments to be made generally, nor a by-law that allowed the committee to make these contributions. So was it part of the scheme ‘exercising its functions’?
I think this is something that all schemes should consider and establish protocols for its management. Would it be OK for a committee to provide election funding for a specific candidate or party in a local election? Is installing solar power which would not pay for itself for several years, if ever, be a valid function because it’s contributing to efforts to curb emmissions?
Personally, I think contributions should be allowed, as and when required, but the strata committee should poll owners first, even informally, to see if they were happy that their money was being spent this way. Surely keeping the community engaged and happy is one of the functions of the strata scheme.