Financial Management
Budgets
Each year we compile a budget for each scheme we manage and provide the proposed budget with the agenda for the Annual General Meeting.
The budget is based on the financial year just past income & expenditure for the Administrative Fund, with projected increases in each of the budgeted items based on our experience.
These figures are projected figures put forward as a guide for owners to follow when deciding what to budget for the coming year.
The Sinking Fund budget is based on a Sinking Fund Forecast that all schemes are required to have by law, and as such we as Strata Managers are required to follow & advise owners as per the recommendations made by the professionals that compiled the Sinking Fund Forecast.
The ultimate say on what levies are budgeted for the following year is made as a majority vote by the Owners that attend the Annual General Meeting and vote on the budget.
As Strata Managers we always accept the decision made by a majority of Owners at the Annual General meeting as to what levies each quarter for your scheme.
Trust Accounts
Each scheme we manage will have their own trust account that all levy funds & key deposits will be made into. Payments to contractors, service providers and key refunds will also be made out of that trust account.
By having one trust account per scheme it removes any confusion with your accounts and helps us manage your accounts more effectively.
Levy Notices
Under the Strata Schemes Management Act 1996 & Community Land Management Act 1989 there is no legal obligation for a managing agents to issue levy notices, however most agents understand that it is impractical to expect owners to know what levies they have to pay & when to pay them.
You have 30 days grace from the due date to pay your levy without penalty. If you do not pay within the 30 day grace period, interest will start to accumulate at a rate of 10% per annum calculated daily until payment is made.
Interest on unpaid levies is provisioned under the Strata Schemes Management Act 1996 & Community Land Management Act 1989, therefore it is a charge imposed under state legislation.
Levies are paid quarterly in advance. We will print & issue your levy notice at minimum two weeks in advance. Levies will be issues as per your preferred means of service. This can be by way of Australia Post in the mail, or by email.
It is important that you update your mailing or email address whenever you move or change you address.
THIS MUST BE DONE IN WRITING TO OUR OFFICE. We are unable to take a change of details over the phone, the legislation makes it clear that this must be done in writing.
The same applies for owner investors who change managing real estate agents, ensure your agent advises our office in writing about where the levies & correspondence are to be issued.
We see many owners get caught out by forgetting to change their address details with their strata managers and end up incurring late payment or levy arrear fees as a result.
It is good practice to ensure that your Strata Manager has your correct phone number, mailing or email address as we will always endeavour to contact you before commencing any levy arrear action in order to minimise fees that may be incurred.
The following link will take you to our change of details form where you can enter your correct details. Once all details are entered simply return to us via email, fax or post and we will update these details once we have received them.
Levy Arrears Collection
Debbie has performed levy arrear collection for the company previously employed with, for over 15 years. Over this period of time she has built solid procedures in levy arrear collection and has a proven track record in recovering levies.
The Strata Schemes Management Act 1996 & Community Land Management Act 1989 allow for any fees & charges incurred by an Owners Corporation when recovering levies, to be passed onto the owner who is in arrears.
Fees & charges can become costly the longer the debt remains unpaid as it becomes necessary to engage solicitors or lawyers to submit court documents when submitting statement of claims for levy recovery.
Levy arrears recovery can be avoided by doing the following:
- Ensure we have your correct details at all times.
- Be aware of when your levies are due and contact our office if you have not received your levy notice. Unfortunately things do happen to mail from time to time that is beyond our control.
- If you are going away for a long period of time contact our office and ask for a levy notice or use an old notice to pay the next quarters levy. Levies paid in advance will be credited to your account and used when the levy generation is done for the next quarter.
- Contact our office in writing if you are experiencing problems with payment of your levies. We understand that everyone can go through hardship from time to time, however there are options such as entering into payment plans to pay off levies.
Our preference is to avoid commencing action to recover levies and this can easily be done by following the simple steps above.
BAS & Tax Returns
Being an Owners Corporation means that an income tax return needs to be submitted to the Australian Taxation Office (ATO) annually. The income tax return needs to be submitted by a registered tax agent.
In order to minimise the costs of doing this for our Owners Corporations we compile as much information as we can in order to make it easier for the tax agent.
Schemes that generate in excess of $75,000 in income are required by law to be registered for GST. Once registered for GST it is a requirement to submit a Business Activity Statement on a quarterly basis by a registered tax agent.
Once again to keep the costs of the Owners Corporation down we compile as much information for the tax agent which means they spend less time on this task, resulting in reduced costs for the Owners Corporation.
Once assessed credits are refunded to the owners, or alternately tax is paid to the ATO if required and all amounts are registered in the statement of accounts for the Owners Corporation.
Financial Statements
During the course of any financial year for a scheme we manage the accounts. All income & expenditure is tracked and recorded in Stratamax
At the end of the financial year a full set of financial statements is provided to all owners with the agenda for the Annual General Meeting.
The statements are comprised of:
- Income & expenditure for the Administrative Fund.
- Income & expenditure for the Sinking Fund.
- Balance Sheet
- Lot arrears analysis
The accounts are kept up to date on a daily basis using BCmax software.
Investment Accounts
When an Owners Corporation has excess funds sitting in their day to day account, it can be beneficial to place part of those funds into an investment account to earn a high level of interest.
These can either be on-call cash managed accounts where funds can be accessed by providing 24 hours’ notice or a term deposit where the funds must remain for the full term to receive full return on their investment.
We are able to manage investment accounts through our banking partner.
