This article discusses incorrect strata fund expenditure, explaining the risks and consequences when an owners corporation spends money incorrectly due to misreading the plan of subdivision.
Question: A Strata Manager has taken over management from a self managed strata. What are the implications when funds have been used incorrectly due to the committee reading the plan of subdivision wrong?
Answer: If you’re not fully up to speed with who is meant to be responsible for what, you can have a situation where the owners corporation has spent money where they shouldn’t have.
The plan of subdivision is really important because it determines where maintenance responsibilities lie within the strata scheme. It can very well be the case that, if you’re not fully up to speed with who is meant to be responsible for what, you can have a situation where the owners corporation has spent money where they shouldn’t have. This then leaves open the possibilities of recovery, but more than that, I think it leaves open the prospect of a rude shock for people when things start getting done the right way. Suddenly it’s ‘whoa, where did this bill come from?’. Because something was done one way in the past does not necessarily mean it continues to be that way in the future, particularly if it was wrong in the first place.
This post appears in the September 2022 edition of The VIC Strata Magazine.
Chris Irons Strata Solve E: chris@stratasolve.com.au P: 0419 805 898