QLD: Transferring Money Between Funds

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This article about transferring money between the admin and sinking fund has been supplied by Todd Garsden, Mahoneys.

Question: Administrative fund expenses have wrongfully been paid out of a sinking fund. The committee/body corporate manager refuses to correct this error. To fix the error, funds would need to be transferred from the sinking fund to the administrative fund. Would this be in contravention of the Standard Module Regulation?

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Answer: It wouldn’t amount to transferring amounts between funds but that does not mean there is no remedy available.

It wouldn’t amount to transferring amounts between funds but that does not mean there is no remedy available. It would contravene a separate part of the legislation, being section 148 of the Body Corporate and Community Management (Standard Module) Regulation 2008 (Qld) (Standard Module).

Assuming the expense was one that ought to have properly been paid out of the administrative fund I presume that was because it was not previously budgeted for.

In such a circumstance, the body corporate should be asked to consider a motion:

1. raising a special levy for any unbudgeted expense – pursuant to section 141(2) of the Standard Module; and
2. reauthorising the expense from the administrative fund with an adjustment made to replenish the sinking fund. This is a better outcome than simply trying to invalidate the resolution for the expense as third parties may have already been paid or the works may be required in any event.

Depending on when the AGM next is, it might be easiest for the motions to be considered at that time to avoid the costs of an EGM.

Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753

This post appears in the November 2020 edition of The QLD Strata Magazine.

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