This question about the approval of the yearly Owners Corporation budget has been answered by Jan Browne, Whittles Strata Partners.
Question: Can our Strata Manager issue levies to each lot owner for the new financial year when there has been no General Meeting to approve the Owners Corporation budget?
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Can our Strata Manager issue an invoice to each owner for the new financial year which includes both an Admin and a Sinking Fund levy when there has been no General Meeting to agree to the Owners Corporation budget or what work needs to be carried out?
Further there has been a refusal by the Strata Manager to issue Income and Expenditure figures to inform owners of the current financial situation.
Can this action of an unapproved Owners Corporation budget be decided by the Executive Committee without notification to owners? and should owners refuse to pay?
Answer: NO. Expenditure within a financial year has to be approved at the AGM.
In a short answer – NO. Expenditure within a financial year has to be approved at the AGM.
Section 75 reads as below for General Fund. Section 81 refers to the Sinking Fund
I would suggest that the owner request on what authority the levies have been issued and cite the relevant section of the UT(M)A.
(1) At each annual general meeting of an owners corporation, the corporation must, by ordinary resolution, approve a budget (the general fund budget) for the administrative fund and each special purpose fund for the financial year in which the meeting is held.
(2) The general fund budget must state for the financial year in which the annual general meeting is held—
(a) an estimate of the total contributions (the total general fund contribution) to be paid into the general fund by the owners corporation’s members; and
(b) an estimate of any other amounts to be paid into the general fund and
(c) an estimate of payments to be made out of the general fund including an estimate of payments necessary—
(i) to maintain in good condition on a day-to-day basis the common property and any other property held by the owners corporation; and
(ii) to pay for insurance premiums; and
(iii) to pay for recurrent expenses.
There is an argument that the Executive Committee presents financials to the AGM. But does an owner have a right to view outside the AGM? Most agents these days have a portal where financials can be viewed (if access is given). An owner has the ability to inspect the books and records and you would imagine financials would be part of this. Again ask why the agent cannot give a copy.
Can this action of an unapproved Levy be decided by the Executive Committee without notification to owners? As per above. No. And up to owners, but I would want to know the financial standing of the Owners Corporation and if outstanding invoices. I’d be asking ‘what is behind this?’
This post appears in Strata News #187.
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This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.