Overview

If the Council need or wish to spend Strata Company funds outside of the budget, in accordance to the Strata Titles Act, there are certain approvals & requirements to be met. These are outlined below for you. 

Note:  'The terms 'Budget' and 'Levies' can frequently be confused. To clarify, they are motioned separately at the AGM because they refer to two separate financial components. 

The budget is what owners approve to spend and the levies give the Strata Council the authority to raise the money from the owners (to fund those expenses). 

Authority to spend funds without notification to owners

The Strata regulations allow a buffer of $500 per lot per annum to be spent from Strata Company funds, without requiring formal notification. 

Note: This is assuming there is no by-law in place which specifies an alternative amount. Where a pre-existing by-law was registered, this figure will override the $500 specified expenditure limit. 

Circular resolution to amend the budget

Amend the budget via ordinary resolution. The motion to be presented to owners via circular resolution (electronic/postal vote)

This would involve sending out a letter to the owners with a copy of the amended budget. The owners register their vote with a click (yes/no button) or a tick (paper form) and the vote is then submitted. All votes are tallied by the Strata Manager on the day of the 'vote'. Results are distributed to owners, and a majority vote will secure approval to proceed with the expenditure.

Note:  A majority of owners must respond to the vote. In schemes where owner apathy is an issue, this may not get the traction required to reach the desired outcome. 

Notice of Expenditure  

This will best apply if the Strata Company have surplus funds and a specific project to carry out. The notice to owners of proposed expenditure requires the Council to provide certain details including:

• timeframe for completion
• breakdown of the cost (labour, materials, personal property)
• description of proposed work to common property
• drawings, diagrams or plans and the particulars of the proposed works
• a minimum of 2 quotations

Owners have 14 days to respond to the notice. If 25% or more (lots in number & unit entitlement) object in writing to the proposed expenditure, within the 14 day time frame, the expenditure cannot proceed. Where no owners respond in writing or less than 25% have lodged an objection in writing, the spend will be approved on day 15. 

Extraordinary General Meeting  

The Strata Council may call an Extraordinary General Meeting (EGM). This provides owners with the opportunity to discuss funding. A motion may be put forward to raise a special levy to pay for unbudgeted expenses or to replenish admin funds. Assuming those present vote in favour, the budget would be amended, and authority is given to the Strata Council to raise and expend further funds.