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  • #38381
    AvatarPanamenke
    Flatchatter
    Chat-starter

    Hi there

    I have searched to see if there is a similar question so apologies in advance if this has come up before and I simply can’t find the answer!

    I received the details of our AGM. It included Agenda, minutes of last AGM etc. in fact everything that should be there however in the Financial Report the breakdown is what I would call “generic” e.g. a heading says Trees and the amount $12,000 then there’s Plumbing – $14,220 and so on. I would like a complete breakdown of each item e.g. what plumbing, when and where and each itemised amount. The same for all the other expenses including the Agents Fees which just state “Management Fees” with the total amount. My question is – as I am an owner is the Managing Agent obligated to send me a complete breakdown of all of the expenses? If so, do I write and ask for this or do I have to go to the office and ‘sight’ the documents?

    Next questions relates to owners who are in arrears with their levies. There is a history with this Strata whereby owners who are in arrears have nominated themselves for the Strata Committee and got on to the Committee. The agent simply asks at the beginning of the meeting “is everyone up to date with their levies as of today” this is putting an onus on the owners to be honest and most of us are however there are 2 who are constantly in arrears and constantly vote at the AGM! The reason I know this is some time ago I was on the Committee and tried to challenge these decisions. I have not been involved with the Committee for over 3 years due to being in a serious accident and having to go through rehabilitation etc. Now I am on the mend I intend being more active again but do need some catching up on the new Strata Laws etc.

    Can you advise me – am I entitled to be given a complete breakdown of the expenditure over the past 12 months and am I entitled to know which owners are in arrears with their levies? I am an owner.

    Thanks

Viewing 14 replies - 1 through 14 (of 14 total)
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  • #51027
    Sir HumphreySir Humphrey
    Strataguru

    …So what we really need to know is whether the SM can be forced to provide this information….

    Certainly the information should be forthcoming to any committee member. The committee can and should demand to see the info. If the manager can’t provide it, then they should investigate what would seem to be a serious problem. It is possible the committee doesn’t know that they can download all the financial statements at any time they care to do so. The committee member may or may not feel like sharing with you. If they committee does not feel they can ask, they need to be reminded that they are in charge exercising the functions of the owners corporation, not the strata manager. Too often the manager is the tail wagging the owners corporation dog.

    #51021
    AvatarCourt
    Flatchatter

    Your comments about how the details of the financial statements might be made available to owners is very useful but this appears to rely entirely on having a SM who agrees to comply with a request to do so.  The original query obviously stems from an owner with a non-agreeable SM and I am in the same boat – in fact my SM even refuses to respond to my request which is pretty rude (I would have raised this at our recent AGM but our SM elected to hold the meeting by way of pre-meeting voting only which is a great way to avoid having to answer any difficult questions).

    So what we really need to know is whether the SM can be forced to provide this information.  If not, perhaps it may require a complaint to Dept Fair Trading?

    #50976
    AvatarSidney
    Flatchatter

    This relates to NSW strata schemes.
    One way to find out what amounts were spent on any items is to obtain either monthly or quarterly Cash Management Statements (Cash Mgt St) from the strata manager (SM). These are bank statements that itemise:
    • all amounts paid;
    • the name of the person/company who it was paid to;
    • the nature of the work/service done; and
    • also monies received by the OC including levies listed lot by lot.

    All the strata manager needs to do is scan or download the statement that the bank has provided. It is then emailed to all owners or just the OC treasurer. As treasurer I email all owners a copy – it’s just a few clicks of the mouse.

    When negotiating the terms and conditions of the Strata Management Agreement which was a standard SCA agreement, I asked that the agreement state that Cash Mgt Sts be emailed to the treasurer or all owners at the end of every month. Our SM agreed. A friend’s SM agreed to do so at the end of every quarter.

    Alternatively, if the SM runs a portal for each strata scheme, the Cash Mgt Sts just need to be posted there and owners can access and download it at any time.

    Receiving monthly or quarterly Cash Mgt Sts allows owners to query amounts spent on unrecognised works/services while they’re still fresh in the SM’s mind. One real life example is that a friend’s SM had paid a bill from the wrong strata scheme’s AF, and when it was queried, it was very quickly reversed.

    Then when the AGM notice is received, owners need only to refer to the monthly/quarterly Cash Mgt Sts and add up amounts spent on plumbing or whatever to see if the total corresponds to the total amount presented in the Income and Expenditure Statement attached to the AGM notice.

    Additionally, if owners receive regular Cash Mgt Sts, they have no excuse for not knowing if their levies are fully paid and if they’re entitled to vote.

    I feel that receiving monthly Cash Mgt Sts should be compulsory.

    #50810
    Avatarkaindub
    Flatchatter

    Panamenke
    What do you intend to achieve By looking at the detailed accounts?

    Whilst you  can comMent on the magnitude of the amounts spent, the reality is that the horse has bolted.  All your protests will not change the amounts spent.

    You may be able to uncover fraudulent payments. You may be able to uncover payments to related parties. These are actionable but you need to be prepared to fight this through the courts. Unless you have deep pockets then forget it.

    If you are concerned about the amount spent by the committee and the strata manager, then at your AGM when the motion for limiting the items that the committee can approve, have the motion set say $300. Of course you’ll need enough other owners to support that in order to pass.

    Additionally, get on the committee and help the committee and the strata manager to find these cheap tradies that you know.
    As others have pointed out, it is surprising how expensive a building can cost to run. And unlike your own property, because you live in a community the act says Repairs and maintenance MUST be done. They can’t be deferred.

    #50809
    AvatarCourt
    Flatchatter

    Thanks for the response.  In this day and age, having to go to the office of the Strata Manager to view the details of expenses seems a bit nonsensical (especially when the owner doesn’t live in the same town as the Strata Manager) – bit like putting a cheque in the mail.  Surely Strata Managers could provide these details electronically at basically zero cost so the concept of owners having to pay a fee is also nonsensical.

    Sometimes I am not quite sure just who Strata Managers are working for – the owners?

    #50807
    Jimmy-TJimmy-T
    Keymaster

    I don’t think that the original question ‘as I am an owner is the Managing Agent obligated to send me a complete breakdown of all of the expenses?’ has been answered.

    The strata manager is not really obliged to send you anything, but they are obliged to let you see any records and correspondence related to the strata scheme.  This may involve you making an appointment, going to their office and paying a nominal set fee (about $30) for doing so.

    If you want to keep a tighter grip on your expenses, then look at the service provided by our sponsors Stratabox, whereby all owners can potentially track all expenses all the time.

    #50805
    AvatarCourt
    Flatchatter

    Hi all,

    Having read all the responses, I don’t think that the original question ‘as I am an owner is the Managing Agent obligated to send me a complete breakdown of all of the expenses?’ has been answered.  I am in a similar situation where I have requested a copy of the detailed expense items in the Income & Expenditure Statement presented at the AGM but, as yet have received no reply from the Strata Manager.  We have no one on the Strata Committee appointed as a Treasurer so I assume that role falls on the Strata Manager.  So, am I entitled to receive that information?

    Thanks,

    #38396
    AvatarFlame Tree
    Flatchatter

    We just had our agm and when folks signed in they received a card to show at voting, it should be at this registration that the Manager checks the record and permits someone to immediately pay up or deny them their right to vote.

    On your query regarding funds I won’t comment on that but would suggest learning and knowing the different terms makes life a little easier as many folks don’t understand or confuse which is what when referring to the 2 main accounts your finds go to. I suggest you remember them as 1. the Admin fund is remembered as A for action, and 2. the Sinking fund is remembered as S for saving. The other thing folks often get confused about and incorrectly use is the term Body Corporate which is all the owners together, and the Body Corporate Committee which is your annually selected representative group (chairman, treasurer, secretary plus regular members), not to be confused with your Body Corporate Manager who the Body Corporate sign up to undertake stuff beyond the Committee’s pay grade.

    Anyways, I found knowing these terms helpful. I’m in Qld so your state many use some different terms but I hope that helps.

    #38395
    Sir HumphreySir Humphrey
    Strataguru

    PS. You can always ask the treasurer at the AGM to expand on how s/he arrived at certain bits of a proposed budget. There might be a good explanation or not. Ideally, send the treasurer your questions in advance for the best chance of a clear response. When I was a treasurer, I appreciated the owner who would ask questions with notice and was less happy with some other owners who preferred to spring something. Give them the benefit of the doubt but don’t accept anything other than a good explanation.

    #38394
    Sir HumphreySir Humphrey
    Strataguru

    In my experience in a large townhouse development with many trees, high hundreds of dollars is the cost to remove smaller trees. A moderate gum tree might be around $1200-$1500 and a big one about $2500. On over 11Ha with a lot of trees planted in the 1970s and some remnant bush, our trees budget has stabilised at around $8,000 but can vary up and down by 50% depending on what happens in a particular year, but there is always something.

    #38389
    AvatarPanamenke
    Flatchatter
    Chat-starter

    Thanks everyone for the advice.

    I am in NSW Sir Humphrey so will check the legislation for NSW.

    Since my accident I have spent a lot of time at home so have been here when various Tradies have been around the complex (it’s a townhouse complex). I saw one gum tree removed (it had died) and since it was quite large probably cost a bit to remove but I think $12000 is excessive. I based this on me getting 6 trees removed from my lot at a cost of just under $2400. One tree was a gum tree. It was dropping branches and annoying my neighbour so I contacted the council to see if I could have approval to have it extensively pruned and lo and behold they told me I could remove it along with a Grevillea that was in bad shape. I had a dead tree and 3 Oleanders that were blocking my patio. I was pleasantly surprised when I got the approval from the council to remove the trees, especially the gum tree. My neighbour was ecstatic too! I got a few quotes from Arborists and one removed all 6 trees, roots and removed the rubbish for just under $2400 so the $12000 seems excessive to me hence me wanting a breakdown so I can check if other trees were removed. I saw some had been trimmed but can’t see how $12000 could be charged.

    The plumbing is the same – I know of one plumbing problem and since it was in my townhouse I know it was not a major problem so looking for a breakdown.

    The owner of the lot who is constantly behind with levies continually nominates herself for the SC and gets on to the Committee. Our previous Agent sent out complete breakdowns of the expenses i.e. date and lot where the repair was done and also sent out a list of proposed levies and current outstanding levies. One owner was substantially behind in her payments but she was seriously ill in hospital so definitely needed compassion in her situation but then again, she wasn’t nominating herself for the SC!

    Thanks again everyone for the information – it helps me a lot.

    #38387
    scotlandxscotlandx
    Strataguru

    Yes you are entitled to know who is in arrears on their levies, and it is the manager’s job to know what the position is. Our Strata Manager always brings a report of the financial position of each of the owners to the meeting, as of that day, and then confirms who is or isn’t financial. It’s a pretty simple report to generate and saves a lot of arguments.

    In terms of details of spending, we keep a running log of expenditure on significant items (i.e. over a certain amount – in one year we spent $11K just on drains) and give that to the owners as part of the meeting papers, that way they know further details of where the money is going. This is a continuous log so it goes back for a number of years, it’s useful in that way because you have an idea of what work has been done and how much it has cost.

    • This reply was modified 1 year, 1 month ago by .
    #38384
    Jimmy-TJimmy-T
    Keymaster

    Notwithstanding all of the above from Sir Humphrey, and rather than opening yourself up to accusations of ambushing unfinancial owners at the AGM, why not tell the strata manager that you will expect to see an accurate account of which lots (rather than people) are up to date and which are behind in their levies.

    The law in NSW relates to who was paid up when the agenda for the general meeting was issued and has or hasn’t paid the amount before the meeting.  Most strata managers say the money has to be in the bank before the meeting starts, so cheques and even cash at the meeting are often not accepted.

    Schedule 1.23

    (8) Voting rights cannot be exercised if contributions not paid

    A vote at a general meeting …  does not count if the owner of the lot was an unfinancial owner at the date notice of the meeting was given and did not pay the amounts owing before the meeting.

    Since the law on nominations relates to owners “entitled to vote” anyone  who is unfinancial can’t self-nominate or nominate someone else (although they can be nominated).

    You are entitled to know which lots are financial and which aren’t and it’s an essential part of financial reporting, especially if there is a chance that a poll vote might be called.

    Self-certification is causing enough problems in strata without self-finiancial validation to be allowed to continue unchecked.

    You might also look at other restrictions on nominations that are often ignored, such as co-owners not allowed to self-nominate and owners not permitted to nominate if they are standing for election themselves.

    • This reply was modified 1 year, 1 month ago by .
    #38383
    Sir HumphreySir Humphrey
    Strataguru

    There might be differences between state and territories legislations about how specifically detailed the financial reporting must be. Where I am (ACT), the Act does not specify financial reporting to be as detailed as you describe. It sounds like what you have in your papers would be sufficient. On this our Act just says: “For a notice of an annual general meeting, the notice must include a copy of … the annual financial statements of the corporation to be presented at the meeting … the general fund budget.”

    I was treasurer of our OC for quite a few years. Our managing agent’s software produced reports that any committee member could access electronically at any time. One report ‘Income and Expenditure’ showed totals for expenses against each line of the budget, so for example, we might have a line for ‘tree maintenance’ and a budget of $12,000 and part way through the year we could see that we had spent $2,345 of that budget. Another report ‘Account Payments’ had a breakdown of every payment. That report might show that the $2,345 was comprised of two separate dated payments to a tree surgeon with short descriptions. ‘Tree surgery’  might be one and ‘tree removal’ might be another.

    As treasurer, I would include the final Income and Expenditure report in the financial papers presented to the AGM but I did not include the Account Payments. On one occasion when a predecessor did include Account Payments, the meeting bogged down in minutiae such as why there was a payment of $23.86 against one line of the budget but then -$23.86 appears lower down. [Answer: the managing agent put a payment in the wrong spot and the treasurer asked to have it moved to the right category of spending.]

    As treasurer, I found it more useful to owners to present a more user friendly ‘Treasurer’s Report’ that would draw attention to and explain anything unusual, that explained what was covered under some of the less clear budget line names, and commented on over or underspending on some lines and gave reasons for changes in the proposed budget for the coming year. Eg. I might write something like ‘This year we removed one substantial tree and engaged a tree surgeon to remove limbs from another that were overhanging a unit. Although these works did not use all of our budget for tree surgery, the proposed ‘trees’ budget for next year remains at $12,000 because we anticipate further work will be required along the southern boundary of the site.’

    As an owner, you are entitled to view any of the records of the OC, so you could ask for a copy of the Account Payments report to be sent. If the managing agent and/or committee don’t want to send it to you, you can at least demand to view it at the office.

    As for levies, another report that the managing agent’s software produced for us was ‘Unit Balances’. The managing agent should be able to tell the meeting if everyone is up to date with their levies. If they are not doing the accounting to keep track of that, what are you paying them for?!

    The Act also says (Again, this is in the ACT, what you have might be similar or different) “A notice of a general meeting for an owners corporation must state … whether the person notified is entitled to vote on all (or any) motions at the meeting, and if not, why not … Note Section 3.20 explains who is entitled to vote on which kinds of motion. For example, if an amount is owing to the corporation in relation to a particular unit at the time of the general meeting, no vote may be cast by the unit owner (or anyone else) for that unit on any motion requiring an ordinary or special resolution.” So, clearly it is up to the committee or managing agent preparing the meeting notice to know if anyone is in arrears. I would expect there are similar provisions and expectations elsewhere. The managing agent should be able to say if an overdue levy payment has been received before the start of a meeting.

    When I was treasurer, I generally omitted the ‘Unit Balances’ report from the financial reporting for the meeting and instead just included a statement that everyone had paid their levies and was therefore entitled to vote. Sometimes there was a little bit of sleight of hand in choosing to do that. We usually had a handful of units with unit balances that were listed in arrears but the amounts were trivial, usually less than $10. This happened because sometimes people would have paid their last levy exactly as they were asked to on their levy notices but did so slightly late. The consequence was that their account would have a month or two’s worth of penalty interest applied that they did not yet know about. It did not compound and would be included on their next levy notice and then generally paid. It was not worth chasing those owners for a few dollars that would be received soon enough. Clearly these people had paid their levies and it would have been unreasonable to deny them voting rights over what was often a matter of cents to a few dollars. Since there was ‘An amount was owing to the corporation’ and we had one pedant who would have insisted each year that a handful of people should be disenfranchised on account of owing trivial amounts, it was better, I thought, to say ‘All are up to date with their levies, so all can vote’ and leave the Unit Balances report out of the meeting papers.

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