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An owners corporation must keep financial records that:

  • Cover all income, expenditure, assets and liabilities of the owners corporation, and
  • Provide for the making of true and fair reports of the financial situation of the owners corporation.

The owners corporation can keep financial records in a paper form or in an electronic software package. If financial records are kept in an electronic software package, they must be kept secure, be regularly backed up and be able to be printed out. If the financial records are kept on a computer that is owned by a third party such as a manager or secretary, the committee and lot owners are still entitled to inspect those records and obtain a copy on the payment of a reasonable fee.

The owners corporation should also keep sufficient financial records to meet its obligations to the Australian Tax Office for income tax and GST purposes. The basic information that an owners corporation should keep includes:

Income records

  • Invoices and statements issued (including tax invoices)
  • Invoices and statements paid or receipts
  • Credit card statements, and
  • Bank deposit books and bank account statements

Expenditure records

  • Purchase/expense invoices (including tax invoices)
  • Purchase/expense receipts (which include an ABN)
  • Cheque butts and bank account statements
  • Credit card statements

Assets and liabilities records

  • Asset register
  • Depreciation schedules
  • Taxation returns
  • List of debtors
  • List of creditors
  • Unpaid invoices

Fees

The owners corporation sets annual fees to cover general administration maintenance, insurance and other ongoing costs. The owners corporation can decide the level of fees, how they are paid and times for payment (usually quarterly).

An owners corporation can also levy special fees or charges on lot owners to cover extraordinary or unexpected expenditure (for example to pay for painting of the building). If the amount of the proposed special fees is more than twice the amount of the owners corporation’s annual fees, then it must be approved by a special resolution (75 per cent majority of all lot owners).

Owners must pay their share of the annual and special fees according to lot liability. If owners do not pay fees they lose the right to vote on all matters requiring an ordinary resolution. Although they can still attend meetings of the owners corporation, they can only vote on matters requiring a special resolution or unanimous resolution. The owners corporation can also charge penalty interest on any money owing and take action to recover any debts in a court or at the Victoria Civil and Administrative Tribunal (VCAT).

 

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