1. Strata 101- Financial
Management & Records
A
7
Part
Training
Series
for
New
Queensland
Body
Corporate
Managers,
6
August
2012
©
Copyright
2012
Teys
Lawyers
www.teyslawyers.com.au

2. Overview
1.
Financial
year
and
budgets
2.
ContribuKons
and
levies
3.
Financial
accounts
4.
Documents
and
record
management
5.
InspecKon
of
records
©
Copyright
2012
Teys
Lawyers
www.teyslawyers.com.au

3. Financial
Year
and
Budgets
ü Financial
year
ends
on
the
last
day
of
the
month
for
the
month
in
which
the
plan
was
registered
eg
if
plan
was
registered
15
August,
financial
year
is
1
August
1
to
31
July
ü Admin
fund
budget
for
cost
of
maintaining
common
property,
insurance
and
non-­‐capital
expenditure
ü Sinking
fund
necessary
and
reasonable
spending
for
major
works
this
year
and
a
reserve
for
the
at
least
the
next
9
years
©
Copyright
2012
Teys
Lawyers
www.teyslawyers.com.au

4. Are
the
Levies
Too
Low?
• AdministraKon
fund
goes
into
deficit
Deficits
Neglect
• Sinking
fund
not
expended
“just
in
Kme”
• Sinking
fund
balance
short
of
plan
Crisis
©
Copyright
2012
Teys
Lawyers
www.teyslawyers.com.au

5. Is
the
AdministraKve
Fund
Budget
Correct?
• Provision
for
bad
debts
and
recovery
costs?
• Watch
for
rampant
increases
for
electricity
and
insurance
• Look
for
a
small
surplus
each
year
of
about
10%
of
income
©
Copyright
2012
Teys
Lawyers
www.teyslawyers.com.au

6. Is
the
Sinking
Fund
Budget
RealisKc?
• Following
the
sinking
fund
plan
+
/
-­‐
10%?
• Spending
according
to
the
plan?
• Saving
according
to
the
plan?
• Not
having
a
plan
is
negligence
• Not
following
the
plan
is
negligence
©
Copyright
2012
Teys
Lawyers
www.teyslawyers.com.au

7. Developers’
Hate
Paying
Levies
• Strata
managers
can
be
sod
on
developers
• Serious
arrears
puts
financial
pressure
on
the
remaining
owners
• Consider
winding
up
proceedings
that
will
come
to
the
aeenKon
of
the
developer’s
bank
©
Copyright
2012
Teys
Lawyers
www.teyslawyers.com.au

8. Signs
of
Good
Levy
Management
1. Measurement
of
delinquencies
2. Wrieen
levy
collecKon
policy
in
place
3. Policy
followed
consistently
4. Interest
charged
on
outstanding
levies
5. Discount
offered
for
early
payment
©
Copyright
2012
Teys
Lawyers
www.teyslawyers.com.au

9. Financial
Accounts
• Accounts
must
show
income
and
spending
for
each
financial
year
• If
done
on
an
accrual
basis,
must
show
assets
and
liabiliKes
• Must
be
audited
unless
the
body
corporate
by
special
resoluKon
decides
not
to
have
an
audit
©
Copyright
2012
Teys
Lawyers
www.teyslawyers.com.au

10. Documents
and
Record
Management
• Must
keep
forever
– The
roll
– Registers
– Contracts
>
6
years
– Important
noKces
– Plans
and
drawings
– Each
insurance
policy
– Exclusive
use
rights
©
Copyright
2012
Teys
Lawyers
www.teyslawyers.com.au

11. InspecKon
of
Records
• Lot
owners,
buyers,
mortgagees
and
their
agents
may
inspect
and
take
copies
of
records
• Privacy
laws
apply
to
body
corporate
records
and
there
should
be
a
privacy
policy
for
the
body
corporate
• Body
corporate
may
be
liable
for
incorrect
details
on
a
cerKficate
©
Copyright
2012
Teys
Lawyers
www.teyslawyers.com.au

12. Next
Week
• Management
rights
1. What
are
they?
2. How
are
they
granted?
3. How
are
they
transferred?
4. Do
they
have
to
be
extended?
5. How
are
they
terminated?
©
Copyright
2012
Teys
Lawyers
www.teyslawyers.com.au

13. About
the
Presenter
Michael Teys is the Founder and Principal Lawyer of TEYS Lawyers. He has a
Bachelor of Laws and practices exclusively in the area of strata and community title
law. He is a Fellow of the Australian College of Community Association Lawyers. He
was formerly an Adjunct Lecturer with Charles Sturt University. He has also been the
CEO of a publicly listed company and one of Australia’s largest strata management
companies managing over $8B of residential and commercial property. Michael
appears weekly on SKY News Business Channel's Property Success with Margaret
Lomas and is a regular panellist for the property edition of Your Money, Your Call for
the same channel. You can read Michael’s blog at www.michaelteys.com and follow
him on Twitter at @MichaelTeys.com
Teys Lawyers practice nationally in strata and community title law representing owners corporations, bodies
corporate and apartment owners. The firm’s practice groups include building defects, strata community
disputes, strata title property law, by-law / rules and levy / fee collection.
TEYS Lawyers provide an entirely cloud based working platform for their team. The firm provides flexible
working arrangements and has remote working locations in Queensland and Victoria.
©
Copyright
2012
Teys
Lawyers
www.teyslawyers.com.au