› Flat Chat Strata Forum › The Professionals › Strata Manager not following instructions › Current Page
Willie has said that they had their sinking fund money in a long term deposit account, which is most likely to be with a bank, because banks are authorised deposit taking institutions. They instructed the strata manager to move it to a shorter term deposit, and he didn’t do it so now they will incur a penalty. A similar thing happened to us a few years ago, we instructed the strata manager to invest the money and he didn’t, so we lost out on the interest. I don’t think Willie is suggesting the money is gone, just that it is still in a long term deposit and they are going to incur a penalty for breaking the term. The penalty is usually not that high, depending on how much is in the deposit, it is usually $150 or so.
Strata managers don’t get commissions from banks for putting money in term deposit accounts. Strata managers don’t have free rein to invest money wherever they like, unless they are given free rein (which would be very stupid), it is up to the EC and/or OC to decide if and how money is invested. As a matter of course you would instruct the manager to provide regular reports.
Strata Managers are bound by the Property Stock and Business Agents Act 2002. Part 7 deals with trust accounts in detail.
There are two things Willie/the EC could do:
1. write to the strata manager and say because you didn’t follow our instructions we have incurred the break fee and we expect you to pay that break fee.
2. if the strata manager doesn’t play ball, tell them you will make a complaint to Fair Trading. But query whether you want to do that over a few hundred dollars.