Are we legally obliged to put money into the capital works fund?

(1)  An owners corporation must, not later than 14 days after the constitution of the owners corporation and at each annual general meeting after that, estimate how much money it will need to credit to its administrative fund for actual and expected expenditure—

(a)  to maintain in good condition on a day-to-day basis the common property and any personal property vested in the owners corporation, and

(b)  to provide for insurance premiums, and

(c)  to meet other recurrent expenses.

Note—

Recurrent expenses would include such regular expenses as insurance, water charges, electricity charges, carpet cleaning, lawn mowing services and the like and minor expenses relating to maintenance of the common property.

(2)  An owners corporation must, at each annual general meeting, estimate how much money it will need to credit to its capital works 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 replacement of roofing, guttering or fences and the like.

(3)  When estimating amounts needed to be credited to the administrative fund or the capital works 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)  An estimate prepared before the first annual general meeting of an owners corporation is to take into account the initial maintenance schedule provided by the original owner for that meeting.

(5)  In estimating amounts to be credited to the capital works fund, an owners corporation is to take into account anticipated major expenditure identified in the 10-year plan for the capital works fund proposed under this Division.

(6)  An owners corporation of a large strata scheme must include in the estimates prepared at an annual general meeting—

(a)  specific amounts in relation to each item or matter on which the owners corporation intends to spend money, or on which the owners corporation is aware money will be likely to be spent, in the period until the next annual general meeting, and

(b)  a note as to any difference between the estimates and the 10-year plan for the capital works fund prepared under this Division and the reasons for the difference.

(1)  An owners corporation is to prepare a plan of anticipated major expenditure to be met from the capital works fund for a 10-year period commencing on the first annual general meeting of the owners corporation.

(2)  An owners corporation is to prepare a plan for each 10-year period following the 10-year period to which the first plan applied. The plan is to be prepared for the annual general meeting at which the period covered by the previous plan expires.

(3)  An owners corporation may, by resolution at a general meeting, review, revise or replace a 10-year plan prepared under this section and must review the plan at least once every 5 years.

(4)  A plan under this section is to include the following—

(a)  details of proposed work or maintenance,

(b)  the timing and anticipated costs of any proposed work,

(c)  the source of funding for any proposed work,

(d)  any other matter the owners corporation thinks fit,

(e)  any other matter prescribed by the regulations for the purposes of this section.

(5)  A plan under this section is to be finalised by the end of the next annual general meeting of the owners corporation after the annual general meeting for which the plan is prepared.

(6)  An owners corporation may engage expert assistance in the preparation of a plan under this section.

(7)  An owners corporation is, so far as practicable (and subject to any adjustment under this section), to implement each plan prepared under this section.

(1)  The owners corporation must determine the amounts to be levied as a contribution to the administrative fund and the capital works 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 of a lot in the strata scheme a contribution to the administrative fund or capital works 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 the regular periodic instalments specified in the determination setting the amount of the contribution.