The body corporate has financial powers and responsibilities under the Unit Titles Act.
- collecting levies from owners
- borrowing and investing money
- paying the body corporate’s expenses
- keeping records and preparing financial statements.
The body corporate must record all of its financial transactions. These records are used to prepare the annual financial statements.
The body corporate must have the financial statements audited. This happens at the end of the financial year. The body corporate can decide not to do this by special resolution.
The body corporate must have an operating account. This account is for:
- managing the property
- providing services and amenities
- compliance costs
- ground rental or licence fees for the land
- maintenance costs incurred at least once a year (eg, pool cleaning).
Most bodies corporate will have a long-term maintenance fund. If a body corporate chooses not to have one, this decision must be made by special resolution. This fund is only for spending related to the long-term maintenance plan.
The body corporate can also hold the following funds:
- contingency funds for unexpected spending
- a capital improvement fund, for property upgrades. This may be included in the long-term maintenance plan.
The body corporate will hold a principal insurance policy. This policy covers all buildings and improvements. In some cases unit owners will hold their own property insurance for their units.
If the unit owner is renting out their unit, an insurance statement must be included in all new tenancy agreements.
If you need advice about your own circumstances, please contact your lawyer.