QLD body corporate

Discussion in 'Legal Issues' started by Sydlad, 17th Oct, 2019.

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  1. Sydlad

    Sydlad Well-Known Member

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    Hello

    Question regarding body corporate in QLD.

    I'm part of a scheme with 7 other owners as an investor

    We have discovered that the sinking fund is much greater than required.

    (We are self managed)

    Is it possible for a QLD body corporate scheme to refund excess sinking fund money back to owners.
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    What do you mean that it's greater than required - eg. you don't need to spend funds this year but do you need to keep adding to it to pay for some major upcoming maintenance listed in the 10 year maintenance plan? Is there suffficient money in the Admin Fund (you can transfer between funds), you may also decide to reduce levies for a period.
     
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  3. Sydlad

    Sydlad Well-Known Member

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    All major items have been completed this year as per QS and it seems the treasurer had advised a higher than required contribution into the sinking fund in the past and owners had just run with it

    Creating a large surplus
     
  4. Marg4000

    Marg4000 Well-Known Member

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    Legally, the BC has to have a 10 year plan for expenditure from the sinking fund. That is so all owners contribute equally to the maintenance of the building, not just those who own the apartments at the time a big expense occurs.

    Just because you have a healthy balance now is not a reason to run the fund down. You have to allow for future big expenses - roof repairs, repainting, etc. or, worse, ground movement requiring expensive repairs or ageing windows and doors needing replacement.

    On what do you base your assumption that the fund is bigger “than required“?
     
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  5. Sydlad

    Sydlad Well-Known Member

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    As per what I wrote before we have just finished a cycle whereby all major items listed in the QS report have been completed

    The QS report specified required contributions over that timeframe

    It seems the other and previous owners incl myself for a short period were advised to pay a larger amount that specified in the report hence a surplus to requirement balance developed

    Now that said owners are more aware they want to disperse the excess funds before the start of the next 10 year cycle begins
     
    Last edited: 17th Oct, 2019
  6. Shazi

    Shazi Active Member

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    I am not sure how you have excess funds as previously mentioned all funds are accumulated over time for not only maintenance but unexpected expenditures as well . This will allow the owners not having to fork out larger sums like you did for the specified time .
     
  7. Travelbug

    Travelbug Well-Known Member

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    Just lower the fees for the next few years. See how it goes. Or keep the management fee and drop the sinking fund fee for a while. You don't want it to low though.
     
  8. qak

    qak Well-Known Member

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    As far as I am aware (& based on NSW) they can't return the funds to owners except in the exceptional circumstance of winding up the BC.

    They *could* reduce the future contributions required if that fits in with the next cycle; bearing in mind that bill shock could occur when the levies go back up.
     
  9. Marg4000

    Marg4000 Well-Known Member

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    The ten year cycle is ongoing. At any time the sinking fund must take into account the expected expenses over the next ten years.

    It does not mean that after 10 years the sinking fund can be emptied.

    No-one knows what may go wrong next week.
     
  10. Apollo

    Apollo Active Member

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    Quite simply no. Nor can the money be transferred to the admin account. There are numerous cases where such issues have been brought to adjudication. Future levies can take account of money raised and funds required per the necessary QS report but there’s no mechanism for money to be repaid to owners.
     
  11. Sydlad

    Sydlad Well-Known Member

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    Thanks yes I thought as much

    We will likely just reduce contributions until the balance aligns with the point in time balance prescribed by the QS report
     
  12. Scott No Mates

    Scott No Mates Well-Known Member

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    Thanks @Apollo - Linky

    This is different in NSW, where it is possible under the legislation - linky