Do loan repayments funded by long-term agreement income need to be reimbursed to the sinking fund by owners via a special levy?
Our body corporate receives $45,000/year income for long term agreements. We borrowed money for building improvements and use this income for the loan repayments. Do these loan repayments need to be paid back into the sinking fund by owners via a special levy? Our previous strata managers did not state this was a requirement, but our new strata manager has insisted that this is the case.
Strata loans are serviced from the administration fund.
It is great that you are generating this additional income for your body corporate.
We strongly recommend that you get specialist legal and tax advice on how to treat both the telco income and its utilisation. Strata loans are serviced from the administration fund, which would make it difficult to use money that has been deposited into your sinking fund for that purpose.
Keep in mind also that the money received from the telco is most likely to be deemed assessable income to your owners. This is another reason to make sure you have the right tax and legal advice!
Related webinar
Log in to your existing Lookupstrata Account to download the printable file.
Jason has spent 19 years in strata, including 12 as a Strata Manager, so he knows the industry inside out. For the last three years he's been with Lannock, and he's proud to have been the company's first dedicated Queensland representative.
He's held senior roles at PICA and Mantra Group, but what matters most to Jason is that he understands his clients' challenges because he's lived them. He takes a people-first approach, focused on building real relationships rather than just doing deals.
Whether it's repairs, renovations, remediation, or major projects, Jason is there to help find the right funding solution.
Lookupstrata Directory
Looking for QLD Strata Specialist in your area? Search within our LookUpStrata Directory for the best list of contacts available
Search the directory
Comments
Log in to leave a comment