COMMUNITY TITLES ACT 1996 - SECT 116
COMMUNITY TITLES ACT 1996 - SECT 116
116—Administrative and sinking funds
(1) A
community corporation must establish an administrative fund and a sinking
fund.
(2) Subject to
subsection (3), non-recurrent expenditure 1 must be made from the sinking
fund and all other expenditure of the corporation must be made from the
administrative fund.
(3) Expenditure must
not be made from a fund to satisfy a financial or other obligation to the
owner of a lot who cannot be required to contribute to that expenditure 2 or
to pay legal costs that the owner of the lot cannot be required to contribute
to 3 , if the expenditure, or part of the expenditure can be traced to a
contribution made by the owner of the lot directly or, where he or she is the
owner of a secondary or tertiary lot, by way of a contribution made by the
secondary or tertiary corporation.
(4) Subject to this
section, contributions of owners of lots and other money 4 received by a
corporation must be credited to the administrative or sinking fund according
to the purpose for which the money will be used.
(5) Money received on
sale of assets of a corporation must be credited to the sinking fund.
(6) All money to be
credited to a fund must—
(a) be
paid into an account in the corporation's name at an ADI or at any other
financial institution prescribed by regulation; or
(b) if
the corporation has delegated its power to receive and hold money to another
person, be paid into a trust account held by that person at an ADI or at any
other financial institution prescribed by regulation.
Explanatory Notes—
1 Non-recurrent expenditure is expenditure for a
particular purpose that is normally made less
frequently than once a year. See the definitions of "recurrent" and
"non-recurrent" in section 3.
2 See section 115(1).
3 See section 115(3).
4 For example, an insurance claim or income
received from investment of the fund.