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Hi,
is it possible to transfer surplus funds from Admin over to the Capital Works fund? Can you please provide the legislation that either does or doesn’t allow this.
Thank you.
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Replies
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In the ACT you can transfer from the Admin to Sinking fund with an ordinary resolution of a general meeting (UTMA s.87(c)). You can also amend the sinking fund plan at any time by ordinary resolution. Other states may be different.
In NSW you cant transfer money from one fund to the other
BUT I think I have a way.
The OC can return money to owneirs from any fund
SO In this order
Propose a motion for special levy for the fund you want the money to go in to.
Propose a second motion to return money to the owners from the fund with excess money. Include in this motion that it relies on motion 1 being passed
The nett result is a transfer of money from one fund to the other
Robert
@kaindub said:
In NSW you cant transfer money from one fund to the otherBUT I think I have a way.
The OC can return money to owneirs from any fund
WRONG!
Under section 76 of the Act, you CAN transfer funds from one account to the other. however, under section 77 you CAN’T refund owners without a unanimous vote.
For instance, your admin fund can borrow cash from the Capital Works (sinking) Fund provided it is paid back withing three months.
Many schemes will re-borrow the funds whenever they are supposed to be paid back. Sooner or later you have to reconcile the amounts but it gives you the breathing space to let you adjust the proportions of levies to bring everything back into equilibrium.
LawoftheLand’s strata managers are doing exactly the right thing (apart from explaining the legal basis for this).
One other thing – there are no Stratakops … unless you are embezzling the funds, no one will be going to jail. It’s all good provided it’s all transparent and the Capital Works Fund doesn’t end up having less money in it than it ought to have.
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.
If the AGM is not too far away, just propose an admin fund levy which is much less than the admin fund budget. Also propose a capital works levy which is correspondingly higher so that overall this year’s levies are not very different from last years. If you worry that part of that might fail, put it all into one budget and levies motion.
[One year we had a rather forceful committee member who seemed to think it was somehow improper for an AGM motion to include the word ‘and’. So we had six motions: three budget motions, one for each of a special purpose fund, the admin fund and the sinking fund and then a further three levy motions. The next year I made a point (as treasurer) of proposing the whole lot in a single motion.]
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