Brookwater Home Owners Club [2009] QBCCMCmr 376 (2 October 2009)

Last Updated: 12 November 2009

REFERENCE: 0467-2009

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	29222
Name of Scheme:	Brookwater Home Owners Club
Address of Scheme:	Augusta Parkway BROOKWATER QLD 4300

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

the Body Corporate

I hereby order that the application is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0467-2009

“Brookwater Home Owners Club” CTS 29222

Application

Brookwater Home Owners Club Community Titles Scheme (BHOC) is a scheme within a layered arrangement containing a number of lots and subsidiary schemes. It is regulated under the Body Corporate and Community Management Act 1997 (Act) and the Act’s Standard Module Regulation (Standard Module).

This application has been lodged by the committee for BHOC and seeks a declaratory order authorising the body corporate to transfer funds from its administrative fund to its sinking fund. It is submitted that for the last two financial years the administrative fund expenses have been significantly less than the administrative fund levy income but that the sinking fund levies have been inadequate to meet forecast expenses.

Decision

As acknowledged by the committee, the legislation provides that funds must not be transferred between the administrative fund and the sinking fund (Standard Module, 146(7)).

The legislation specifically provides that if a liability arises for which inadequate provision has been made in the budget then the body corporate must fix a special contribution to be levied on the owner of each lot (Standard Module, 141(2)). However, unlike in New South Wales,[1] there is no specific provision dealing with a redistribution of surpluses to members of the body corporate. Typically, if a fund is in surplus then this would normally just result in members being able to adopt correspondingly lower contribution amounts for the following year.

In the present circumstances the committee may wish to review the budgets and, in preparing budgets for next year, consider whether to allow members to vote upon whether to return surplus administrative fund amounts to the members before adopting increased sinking fund contributions. However, I do not consider it necessary or appropriate to authorise the committee to transfer funds from the administrative fund to the sinking fund contrary to section 146(7) of the Standard Module.

Order

For these reasons, the application is dismissed.

---

[1] Refer to section 72 of the Strata Schemes Management Act (New South Wales).