As body corporate funds may not be used on maintenance of an owner's unit, what happens if this expenditure has been budgeted for and included in the annual levies set at the AGM?
We hear that body corporate funds may not be used on maintenance of an owner's unit, eg mowing the yard, painting the balcony walls, or spraying the unit annually for pests and termites.
What if this expenditure has been budgeted for and included in the annual levies set at the AGM? If the body corporate cannot use the money for private maintenance, does this mean the owners who have paid the levies have lost their money?
Just because something is budgeted does not automatically mean it is approved to be spent or must be spent.
I don't think so. Just because something is budgeted does not automatically mean it is approved to be spent or must be spent.
The key thing is the legislative fundamentals. Where a body corporate provides services to individual owners, it must, to the greatest practicable extent, recover the costs of those services from the user of them. What it means budgetary wise is that it should not spend that money that has been raised, which is really then a free klick for all owners next year when (ideally) the body corporate should not have to raise as much as they did in the previous year – noting, of course, that the owners themselves will be likely to have to make up the shortfall out of their own pockets for the individual services provided to them.
Frank Higginson Hynes Legal E: frank.higginson@hyneslegal.com.au P: 07 3193 0500
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With more than 30 years’ experience in property, management rights and body corporate law, Frank is a beacon of knowledge and a renowned strata-industry expert. Known for his straight-shooting style and commercially driven advice, Frank cuts through the most challenging legal problems to deliver real-world solutions.
An active member of the strata community, Frank generously shares his time and experience to help educate the broader industry on all things strata law. He embraces his role as an industry leader and is committed to continued industry innovation and ensuring everyone in the strata sector has access to practical resources and solutions as they navigate through the strata maze.
He regularly presents to all industry segments and also speaks at Queensland Law Society events on strata law issues to other lawyers. Frank is a regular contributor to LookUpStrata.
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