SA: Q&A Spending limits and setting budgets

This article is about spending limits and setting budgets in a SA strata scheme.

Question: In SA, our bylaw mentions a $20k spending limitation for the management committee without the need for approval. Is this applied per project, broken down in stages or per year for the total of all expenditures?

There is a primary corporation, residential corporation and commercial corporation within our apartment complex for over 250 units.

The residential and commercial corporations are two lots under the primary corporation. Would the management committee have a say in the budget, expenditure and other decision making for the primary corporation?

Would members of the residential corporation have any say about the primary corporation, eg budget, expenditure and others.

Our bylaw mentions a $20k spending limitation for the management committee without the need for approval. Is this applied per project, broken down in stages or per year for the total of all expenditures?

Answer: In a large development, it is not uncommon for the limit to be for each occurrence however I would suggest you review the minutes when this authority was granted as it may provide further clarification.

This is a very good question and can be complex when dealing with multiple corporations like yours, however, I will try to address it as simply as I can.

Yes, the management committee of the primary corporation could certainly and generally does have some input into the running of the corporation. Ideally, the committee would be in contact with the strata manager throughout the year to make appropriate decisions and to assist in formalising the budget.  

The management committee of the primary would be run and have the same powers as a management committee at the residential or commercial level, however, each corporation may have different assets to maintain.

As you have mentioned the primary corporation is made up of 2 lots the residential and the commercial.

Generally, a representative from the residential and commercial would be appointed to represent the commercial or the residential at the primary level. This is generally the presiding officer from each corporation or another appointed person. These appointed persons will be representatives for each corporation and sit at the primary level. These persons may also be appointed members of the committee at the primary level and have input into decision making, budget, expenditure etc.

In regards to management, committee spend limits, generally, this is decided and agreed upon at the AGM of the respective corporation.

The amount and authority approved, depends on what resolutions and authorities the corporation has granted the committee.

In a development of your size, it is not uncommon for the limit to be for each occurrence however I would suggest you review the minutes when this authority was granted as it may provide further clarification.

I do hope this has provides you with some clarification, in all cases, we would strongly suggest you speak to your strata manager as they have the necessary information that could further help you.

Tyson D’Sylva Ace Body Corporate Management E: tyson.d@acebodycorp.com.au P: 08 8342 1544

This post appears in Strata News #570.

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