Question: Should unplanned capital expenditure be paid from the administration fund instead of the capital works fund?
Our scheme recently incurred an unplanned capital expenditure that was not budgeted for in the capital works fund. The treasurer allocated the expenditure to the capital works fund. I believe this contravenes Section 74(4) of the Strata Scheme Management Act 2015, which states that the owners corporation may only pay money from the capital works fund for specific purposes.
Should this expenditure have been paid from the administration fund instead?
Answer: This can be a very subjective issue.
This can be a very subjective issue. One person’s admin fund repair can be another person’s capital works fund expense. If the owners corporation agrees, it can transfer funds from the admin fund to the capital works fund to cover this cost. This is now permitted under the new section 76.
This post appears in Strata News #758.
Rod Laws
TINWORTH & CO
E: RodLaws@tinworth.com
P: 02 9922 3660
We have a tenant in our complex who has a regular visitor in a motor home. Connects up power wise to tenants power and stays several weeks. We don’t like the visual intrusion. Where do we stand?
Hi Lindsay
The following response has been provided by Leanne Habib, Premium Strata:
Firstly, we need your confirmation that you are in a strata scheme, and, if so, can you describe what the visual intrusion is and whether it is situated on lot or common property. Please let us know so that we may offer some guidance.
Yes we are Strata. 8 unit/townhouses in a gated community. The old bus/motor home parks on a properties designated car park to which runs an extension lead.. A person sleeps in the bus. It is considered by the owner/occupiers to be a visual eyesore from inside and from outside.
Hi MArcelle,
If it is a common driveway despite not being in the capital works repair schedule it does fall under this fund.
YOu would need to discuss with your strata comittee the appropriateness of the expenditure. INcluding hazards caused if not rectified.
I am not a strata manager but am on a strat comittee.
Jason
Newcastle
What would be an appropriate amount to index the cost of capital items over 5 and 10 years based on current cost?
Hi Rodney,
I am not a strata manager but am on a strata comittee and I would look at a CPI increase each year of 2-3% for replacement or works costs.
Jason
Newcastle
NSW
Is it legal for a strata manager to go ahead with a major repair when the cost of that repair (concrete drive way) is not even there in the sinking fund at the time of allowing the tradesman to start the job?
I would prefer if there was 2 accounts and 1 for each purpose. sinking and Administrative
but that’s only my opinion as a unit owner for 20 years.
but good to read your logs.