Strata Committee Spending Limits - SSKB - Strata Managers | Community Experts

Strata Committee Spending Limits


SSKB Strata Managers looks at Strata Committee spending limits

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

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:

  • Cover all its income, expenditure, assets and liabilities;
  • Enable it to make true and fair reports of its financial situation;
  • Record and explain all financial transactions for income tax and GST purposes (Australian Taxation Office requirements).

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

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:

  • Financial accounts must be audited every year;
  • Annual budgets must list amounts expected to be spent on specific items;
  • At least two quotes must be obtained by the Owners Corporation for items over $30,000;
  • Proxy votes for an Owners Corporation meeting must be provided to the secretary at least 24 hours before the meeting;
  • Personal notice of all upcoming strata committee meetings and the minutes of these meetings must be provided to lot owners upon request (notice cannot be given via noticeboards).

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:

  • Burst or blocked water or sewerage pipes;
  • Serious damage caused by fire or storm or any other natural disaster;
  • Unexpected electrical or security system failure;
  • Glass breakages that affect the security of any building in the strata scheme or could result in damage to the inside of any such building.

Queensland

Queensland has the most prescriptive rules of all.

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.



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