One of the responsibilities to fall on the shoulders of committees is ensuring that funds for the repair and maintenance of the property are correctly spent.
And, not surprisingly, different states have different rules to follow.
Victoria doesn’t nominate a spending limit and instead reminds OCs of their responsibilities to maintain the scheme in good order and practice good financial management.
An Owners Corporation must keep financial records that:
Owners Corporations are to repair and maintain common property as well as the chattels, fixtures, fittings and services related to the common property or its enjoyment.
New South Wales, which updated its strata laws in 2016, puts obligations on the committee of large schemes, which are defined as having more than 100 lots:
A large strata scheme cannot spend more than 10 percent above the budgeted amount for any item unless the restriction removed by a resolution at a general meeting.
The only other exception is where the spending is for emergency purposes and covers things like:
The relevant limit for committee spending is set by ordinary resolution of the Body Corporate. There is no minimum or maximum limit that the body corporate can set.
If no amount is set by a general meeting resolution, the relevant limit is calculated by multiplying the number of lots in the scheme by $200.
When it comes to large amounts of spending to conduct major works, the committee is required to get quotes.
The Body Corporate can set the major spending limit by ordinary resolution at a general meeting. There is no minimum or maximum amount that can be set.
If no amount is set, the limit is the lesser of either:
$1,100 multiplied by the number of lots in the scheme or $10,000.
SSKB is Australia’s leading strata management company specialising delivering expert advice and management to Owners Corporation and Body Corporate communities.