› Flat Chat Strata Forum › Finance, budgeting and loans › admin and sinking fund nearly zero › Current Page
@mikobrand96 said:
Allegedly, some strata managers are making huge profits, charging for things that don’t exist and some make deals to overcharge owners corp.
I am reminded of that old quote, “never attribute to malice (or dishonesty) anything that can just as easily be ascribed to stupidity.”
Propose at the next EC meeting or AGM that a sinking fund assessment be prepared, as per the provisions of Sections 75(2), 75A and 76 of the Act (see below).
If the EC refuses or prepares an assessment that is clearly inadequate, then you can go to NCAT and ask it to order the EC to do so under section 138.
This is what the Act says:
75 Estimates to be prepared of contributions to administrative and sinking funds
(2) An owners corporation must, at each annual general meeting, estimate how much money it will need to credit to its sinking fund for actual and expected expenditure:
(a) for painting or repainting any part of the common property which is a building or other structure, and
(b) to acquire personal property, and
(c) to renew or replace personal property, and
(d) to renew or replace fixtures and fittings that are part of the common property, and
(e) to replace or repair the common property, and
(f) to meet other expenses of a capital nature.
Note. Expenses of a capital nature would include expenses in relation to major repairs or improvements to the common property or personal property of the owners corporation, such as painting of a building or replacement of roofing, guttering or fences and the like.
(3) When estimating amounts needed to be credited to the administrative fund or the sinking fund the owners corporation must have before it, and take into account, a statement of the existing financial situation of the strata scheme and an estimate of receipts and payments.
(4) In estimating amounts to be credited to the sinking fund, an owners corporation that is required to prepare a plan under section 75A is to take into account anticipated major expenditure identified in the plan for the 10-year period to which the plan relates.
(5) An owners corporation of a large strata scheme must include in the estimates prepared under this section at an annual general meeting specific amounts in relation to each item or matter on which the owners corporation intends to expend money, or on which the owners corporation is aware money will be likely to be expended, in the period until the next annual general meeting.
75A Owners corporation to prepare 10-year sinking fund plans
(1) This section applies to owners corporations established on or after the commencement of this section.
(2) An owners corporation to which this section applies is to prepare a plan of anticipated major expenditure to be met from the sinking fund over the 10-year period commencing on the first annual general meeting of the owners corporation.
(3) The initial plan is to be finalised by the end of the second annual general meeting of the owners corporation.
(4) The plan is to be reviewed and (if necessary) adjusted no later than at the fifth annual general meeting of the owners corporation.
(5) An owners corporation to which this section applies is to prepare a plan as referred to in subsection (2) for each 10-year period following the period referred to in that subsection and is to finalise and review the plan in accordance with the requirements of subsections (3) and (4) at the corresponding annual general meetings in the relevant 10-year period.
(6) An owners corporation may engage expert assistance in the preparation of a plan under this section.
(7) The regulations may extend the operation of this section to all owners corporations or to such classes of owners corporations established before the commencement of this section as are specified in the regulations.
(8) A regulation referred to in subsection (7) may make necessary modifications to the application of any provision of this section to an owners corporation established before the commencement of this section.
76 Owners corporation to set levy for contributions to administrative and sinking funds
(1) The owners corporation must determine the amounts to be levied as a contribution to the administrative fund and the sinking fund to raise the amounts estimated as needing to be credited to those funds.
(2) That determination must be made at the same meeting at which those estimated amounts are determined.
(3) The owners corporation must levy on each person liable for it such a contribution.
(4) If the owners corporation is subsequently faced with other expenses it cannot at once meet from either fund, it must levy on each owner a contribution to the administrative fund, determined at a general meeting of the owners corporation, in order to meet the expenses.
(5) A contribution is, if an owners corporation so determines, payable by such regular periodic instalments as are specified in the determination setting the amount of the contribution.