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Our admin fund has gone into deficit for the last 2 years. The first time wasn’t so bad because the deficit reflected uncollected levies and there was no loss of equity but the second year saw many thousands wiped from the equity of the SP* due to some significant overspending.
There is no genuine separation between our admin fund and sinking fund; it is all just money in the bank. There was no short term transfer of money from one fund to the other to cover the overspending that led to the deficit and it is unlikely the treasurer was even aware of growing deficit.
The deficit only became “public” knowledge, 8 or so weeks, after the annual audit. The AGM then inappropriately amended a motion to transfer the deficit amount from the sinking fund to the admin fund. This was not some short term transfer to pay bills – the bills had already been paid. The purpose of the provisions in the Act are to allow an SP to pay money, that a fund does not have, from the other fund and then recover it via a special levy. In our case nothing was recovered and nothing will get recovered.
I would go on but the details are irrelevant; the moral to the story is CTTT** did not care about the poor financial management of my SP when some of the issues were highlighted in a s162*** application.
I am aware of what the Act says in relation to financial management and my SP has no regard for any of it and there is no recourse until things get very dire. Even after my SP lost a significant amount of money through poor planning and hopeless compliance to the Act, CTTT were happy to leave the management in the hands of the inept ones who “manage” the SP.
If you have concerns about your SPs financial situation then you need to pull off a coup and move forward from there. Remember there are no strata police unless things are getting very dire.
[For the uninitiated …
* SP = Strata Plan – meaning the building or the complex.
** CTTT = Consumer Trader and Tenancy Tribunal … the strata 'court' where you go (after you've had no joy at Fair Trading)
***S162 – Section 162 is the part of the strata Act that allows the CTTT to appoint a strata manager to take over all the functions of the owners corporation and executive committee. – JT]