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Hi, I've recently joined the EC in a block of 16 and the strata manager has said that there is a debt of $8,000 carried over from 09/10 in the admin fund. The others say it's ok, but it seems strange to me. We have not had an auditor look at the books for many years, so I'm wondering what's going on. Is it worth paying an independent auditor to look at the books?
Thanks
Peter
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This may be money transferred from the sinking fund and not yet repaid or it could be money owed to the admin fun in levies.
What a lot of OCs do at a time of tight cash-flow is to maintain their liquidity by “re-transferring” the same loan from the sinking fund every three months until they are in a position to repay it. It’s not strictly legal but it’s not the end of the world it you keep track of it and for many OCs it’s preferable to having a special levy or raising levies to deal with a temporary shortfall because once they’ve gone up, levies never go back down.
Just keep an eye on it in the annual accounts and make sure it doesn’t get any bigger becasue that means your levies are too low and your sinking fund is being drained.
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.
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