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Topic
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Last AGM
Our sinking fund is in fact only a loose estimate of the yearly spending’s and the next years actual spending may be on different requirements.
When I raised the question about details of the proposed spending’s and why they were not shown in the budget and likewise why is there no ongoing thinking fund showing last year’s contribution less any spending especially as some items were not implemented hence nil spending.
I clarified my question was based on the Strata Schemes Management Act 1996 No 130
Part 3 71 What money can be paid out of the sinking Fund
I was then informed by the Strata Agent as we are only 28 Lots this section does not apply and we can obviously use the fund as we like and spend the funds on anything and not on the items mentioned in the budget produced at the AGM.
There has been no ten year forecast as required under 75A but I was informed the Executive Committee did have one but as a reader of all agendas and minutes of the Executive Committee I have never seen any mentioning of the forecast budget.
In a summary most Executive Committee actions are not in their Agenda or in the minutes.
I then nominated for the Executive Committee in total 6 nominations where received, the Strata Agent then stated he would resign if we had 6 members on the Executive Committee (he does not attend the Executive Committee meetings) he then asked if we all agreed with 5 members and the majority at the meeting agreed then he produced the ballot on who the 5 members should be.
- The simple question is 71 excluded from any strata depending on size
- Is 75A not required to be reported to the owners?
- Can the Strata Agent add to the agenda during the AGM meeting to limit the number of Executive Committee members from six to five?
- Can anyone (current and past Executive Committee members) spend any money without an item on an agenda and a minute under the name of Executive Committee?
- Can the Executive Committee state they have a budget without an item on an agenda and a minute under the name of Executive Committee.
- When the strata levy is shown to prospective buyers does the GST be included as per NSW law?
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Replies
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I’m fairly sure the same laws apply to all schemes (3 lots and upwards) with regard to the sinking fund and how those funds are managed, as well as the compulsory 10 year plan.
I know that small schemes (2 lots) can be exempt from your points above, but that certainly is not your case.
Threaten to hit the Strata Agent with the 20 penalty units under Part 4 37 (5) and see if they even know what you’re talking about
To your other questions:
- 75A should apply to your scheme;
- The strata agent can suggest reduced numbers to the EC, but unless you have all voted to give some very strong powers to the strata agent, then they have no right to this on behalf of the OC;
- The EC represents the OC at all times. For probity’s sake, the EC/Strata Agent should document all items spent. How that documentation occurs is a matter for each scheme. Some have certain $ limits prior calling an EGM, other mundane items for day-to-day repairs can be approved via 50% of the EC on email, for instance. There is still a trail, but it won’t necessarily be minuted for you to see during each EC/AGM. Past EC members should not be involved in spending the OC money;
- The budget of the EC is the budget of the OC. This is determined by your total levies collected each year, as determined by the AGM;
- GST is nation-wide: if your levies notice says ‘Tax Invoice’ then yes, it needs to show the amount of GST, and if it has GST, then it must have the words ‘Tax Invoice’. Prospective buyers, however, are not paying levies, therefore strictly speaking they need to ask whether the amount is Inc or Ex GST.
Hope that helps
Leif,
I wouldn’t normally express this, but it sounds like you need:
A. To change the strata manager.
B. Seek to change the ECQuite simply it seems that the OC is not functioning correctly and those advising on how it should be happening are providing poor advice.
Yes section 71 of the act applies. Your OC should have a budget or plan for sinking fund expense for the year.
Yes section 75 and 75A applies and you should have a 10 year plan and it needs to be updated every 5 years.
Unless the strata manager has a proxy, they have no vote at the AGM or any meeting of an OC.
Whether the levies have gst or not depends on whether the scheme is gst registered. The scheme doesn’t need to be gst registered if the turnover is less than $150k per annum
Hope this helps.
Mr S
Whilst it is prudent to prepare the 10 year sinking fund plans, Section 75(1) states:
(1) This section applies to owners corporations established on or after the commencement of this section.
I presume the section commences in 1996. Therefore if a scheme was established before 1996, the scheme may decide not to prepare the 10 year sinking fund plans. Is this interpretation correct?
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