Finances

Yes. As a lot owner, you have a legal right to inspect the body corporate's records, including financial records. The process: 1. Make a written request to the body corporate secretary or manager specifying which records you wish to inspect 2. The body corporate must respond within the timeframe set by the relevant module 3. You can attend to inspect records in person, or request copies (a reasonable copying fee may be charged) Records you can request include: - Financial statements - Bank statements - Invoices and payment records - Insurance policies - Contracts - Meeting minutes If your request is refused or ignored, you can apply to the Commissioner for Body Corporate and Community Management for an order requiring access. This article is general information only and not legal advice.

A body corporate must maintain comprehensive financial records, including: - Bank account statements for all funds - Levy records and individual owner payment histories - Accounts payable and receivable - Financial statements for each completed financial year - Approved budgets and levy notices - Insurance policies and renewal correspondence - All contracts entered into by the body corporate - Records of all expenditure with supporting invoices Financial records must generally be kept for at least 7 years. The body corporate manager typically maintains these records on behalf of the committee. All financial records must be made available for inspection by lot owners on request. This article is general information only and not legal advice.

The committee prepares draft budgets for both the administrative fund and the sinking fund before the AGM. **Administrative fund budget:** Covers expected day-to-day expenditure for the coming year — insurance, management fees, routine maintenance, utilities for common areas, and administration costs. **Sinking fund budget:** Based on the 10-year sinking fund forecast. Sets aside funds for future major expenditure such as repainting, roof replacement, and resurfacing. The draft budgets are included in the AGM notice sent to all owners. At the AGM, owners vote to approve (or reject) each budget. Once approved, the committee determines the quarterly levy amounts required to fund the budgets and issues levy notices. Owners can ask questions about the budget at the AGM and submit motions to amend it before it is voted on. This article is general information only and not legal advice.

Body corporate funds must be held in trust in a prescribed account — typically a bank account in the scheme's name administered by the body corporate manager or the committee. Surplus funds can be invested in prescribed low-risk investments such as: - Bank term deposits - At-call savings accounts - Other government-approved deposit accounts Body corporate funds cannot be invested in shares, managed funds, or other volatile assets. The priority is capital preservation and accessibility — the funds need to be available when maintenance expenses or levy shortfalls arise. Any interest earned belongs to the fund in which the money is held. The committee should review investment arrangements regularly, particularly in a changing interest rate environment, to ensure the scheme is earning a reasonable return on term deposits. This article is general information only and not legal advice.

If a body corporate's administrative fund is insufficient to meet its obligations, the committee must act quickly: 1. **Call a general meeting** to raise an interim levy or special levy to restore the fund balance 2. **Prioritise essential expenditure** — insurance and critical maintenance must be maintained 3. **Report to owners** transparently about the financial position The body corporate cannot simply stop paying its obligations — unpaid insurance premiums, maintenance contracts, or management fees create further liabilities. Running out of funds is almost always the result of: - Levies being set too low for too long - Unexpected large expenditure not in the budget - Poor levy collection (significant arrears not being recovered) Owners who pressure the committee to keep levies artificially low often end up facing large special levies when the funds run out. This article is general information only and not legal advice.

A body corporate manager is engaged under a management agreement to assist the committee with administration. In the financial area, the manager typically: - Prepares and issues quarterly levy notices - Collects levies and follows up overdue accounts - Pays accounts and maintains the bank accounts - Prepares financial reports for committee meetings - Assists the committee with budget preparation - Arranges annual financial statements The manager is an administrator — not a decision-maker. Signing authority for payments and financial decisions remain with the elected committee members. The committee should regularly review the manager's financial reports and ask questions about any unusual items. It is the committee's responsibility to oversee the manager's work, not to blindly approve everything presented to them. This article is general information only and not legal advice.

The body corporate must table financial statements for the preceding financial year at the AGM. These must be: - Prepared in accordance with the relevant module regulations - Included with the AGM notice sent to all owners at least 21 days before the meeting - Available for owners to inspect at any time on request Financial statements typically include: - Balance sheet (assets and liabilities of each fund) - Income and expenditure statement - Notes explaining significant items For larger schemes, the statements may be reviewed or audited by an external accountant. A lot owner can also request financial statements at any time outside the AGM cycle — they form part of the records that must be made available for inspection. This article is general information only and not legal advice.