Question: Does the Owners Corporation have to pay sufficient money from levies into the Capital Works Fund? I have just discovered no money has been paid into the Capital Works Fund where I live for the last 3 years. Around 240 people live in the building.
Answer: Yes, the Owners Corporation must pay funds into the capital works fund in accordance with the amounts set in its capital works fund plan.
Yes, the Owners Corporation must pay funds into the capital works fund in accordance with the amounts set in its capital works fund plan.
In your case, it may be that no capital works funds were anticipated as being required over the last 3 years.
See extracts of the legislation below:
74 Capital works fund
- Establishment of fund An owners corporation must establish a capital works fund.
- Amounts payable to fund An owners corporation must pay the following amounts into the capital works fund:
- the contributions levied on, and paid by, owners for payment into the fund,
- any amounts paid to the owners corporation by way of discharge of insurance claims, unless paid into the administrative fund,
- any amounts paid to the owners corporation under Part 11,
- any amount received by the owners corporation that is not required or permitted to be paid into the administrative fund,
- the proceeds of any investment of the fund.
- An owners corporation may also pay the following amounts into the capital works fund:
- any income of the owners corporation,
- any amount that may be, but is not required to be, paid into the fund under this Act.
- Amounts payable from fund An owners corporation may pay money from its capital works fund only for the following purposes:
- payments of the kind for which estimates have been made under section 79 (2),
- payments made in accordance with this Division on a distribution of a surplus in the fund,
- payments of amounts for the purposes of Part 11,
- the transfer of money to the administrative fund or to pay expenditure that should have been paid from the administrative fund.
- Exemption An owners corporation for a strata scheme comprising 2 lots need not establish a capital works fund if:
- the owners corporation so determines by unanimous resolution, and
- the buildings comprised in one of those lots are physically detached from the buildings comprised in the other lot, and
- no building or part of a building in the strata scheme is situated outside those lots.
80 Owners corporation to prepare 10-year capital works fund plan
- An owners corporation is to prepare a plan of anticipated major expenditure to be met from the capital works fund for a 10-year period commencing on the first annual general meeting of the owners corporation.
- An owners corporation is to prepare a plan for each 10-year period following the 10-year period to which the first plan applied. The plan is to be prepared for the annual general meeting at which the period covered by the previous plan expires.
- An owners corporation may, by resolution at a general meeting, review, revise or replace a 10-year plan prepared under this section and must review the plan at least once every 5 years.
- A plan under this section is to include the following:
- details of proposed work or maintenance,
- the timing and anticipated costs of any proposed work,
- the source of funding for any proposed work,
- any other matter the owners corporation thinks fit,
- any other matter prescribed by the regulations for the purposes of this section.
- A plan under this section is to be finalised by the end of the next annual general meeting of the owners corporation after the annual general meeting for which the plan is prepared.
- An owners corporation may engage expert assistance in the preparation of a plan under this section.
- An owners corporation is, so far as practicable (and subject to any adjustment under this section), to implement each plan prepared under this section.
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