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