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  • #9719
    andebrook
    Flatchatter

      andebrook is in Victoria – Whale

      Hi all,

      I am hoping that the FLAT CHAT community can help me out with some info on Maintenance Plans and Funds but also Strata Fund Managers obligations with regards to interest earned on Maintenance Funds.

      Recently our owner’s corporation held our AGM meeting where it was decided that a maintenance plan and maintenance fund would be established to take care of works required.

      The meeting minutes have now been circulated where it states that the maintenance fund will be established and quarterly payments from owners altered accordingly and that a maintenance plan would not be established.

      Regarding the maintenance plan:

      Putting aside the fact I personally disagree with the minutes on the interpretation of the maintenance plan decision (I will discuss with the committee), according to the Owners Corporation ACT 2006 it states that you cannot have a Maintenance Plan without a Maintenance Fund, but it does not advise whether a Maintenance Fund can exist without a Maintenance Plan.

      Is anyone able to shed some light on whether the fund can exist without the plan?

      On a separate note, I queried our Strata Manager on the % rate of interest the Maintenance Fund will earn and how often this interest would be paid back into the fund.

      Their response was that:

      1. The income earned on interest would be classified as taxable income and as such;
      2. Would require a yearly tax return and quarterly activity statement;
      3. Of Which would cost $800 to $1200 in addition to the fees we pay for their strata services
      4. And as such there would be no value in setting up an interest bearing account given that the cost to do (1), (2) and (3) would outweigh the interest earned per annum.

      Is anyone able to comment on the legitimacy of (1), (2) and (3) in addition to whether or not the usual fees paid to the strata fund should cover tax return and activity statement preparation rather than an additional payment to the strata being required?

      Finally, if the owners corporation do not seek interest earnings on the maintenance fund, is the strata fund allowed to earn interest on the money in the fund?

      Thanks all!

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