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Strata in Sydney, NSW.
Our Admin fund will be in arrears by the time our AGM is held in August. The Strata Committee recently passed a motion that funds be transferred from Capital Works to Admin to cover the arrears. Our Strata Manager has advised that this decision can only be made at a General Meeting. I cannot find anything in the Act that specifies this condition. The motion also states how the loan is to be repaid.
Can you advise if a motion to transfer funds from Capital Works to Admin passed by the SC is invalid?
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Can you advise if a motion to transfer funds from Capital Works to Admin passed by the SC is invalid?
Strict reading of the Act would suggest that it’s only if the strata committee has delegated powers to Act on behalf of the Owners Corporation (a fairly standard set-up) that they can do this. In the absence of any such approval, the SM may be right. This is what the Act says (my emphasis):
(4) Amounts payable from fund
An owners corporation may pay money from its capital works fund only for the following purposes:
(d) the transfer of money to the administrative fund or to pay expenditure that should have been paid from the administrative fund.
Even so, the strata committee is taken to be acting as the OC in all matters except those specifically requiring approval at a General Meeting, so I think your strata manager may be being a tad pedantic.
Of course, you might have passed the standard motion at your last AGM limiting the SC’s spending powers. I would check it out.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
The SM may be referring to the part where the funds are repaid. The Act requires that the repayment must be in the form of a special levy, and that would require a General Meeting. S76(2).
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