Strata Authorising Spending Tool

Authorisation for Spending

Authorisation for Spending

Please note, this tool is only for your reference, and the legislation should be referred to as the primary reference.
Spending by a body corporate is regulated under the Body Corporate and Community Management Act 1997 and its regulation module.

Spending Limits & Quotes

By default, if not changed

$
($200 * Total Lots – – Can be changed at a general meeting)

$
(Lower of $10K or $1100 * Total Lots – – Can be changed at a general meeting)

$
($300 * Total Lots – – Can not be changed)

$
($2000 * Total Lots – – Can not be changed)
(Amount > Ordinary Resolution Improvement Range – – Can not be changed)

Determination of Authorisation

Is the work/proposal budgeted for? *
*The confusion may come about due to the wording of the BCCM regulation module noting “If a liability arises for which no, or inadequate provision, is made in the budget, a special contribution must be raised” and how this is interpreted.

In an adjudicators order referenced to Evolution Apartments, a lot owner sought an order from the Commissioners Office that foyer refurbishment works not be permitted to proceed on the basis that the works did not form part of any forecast or the sinking fund budget and that all funds held in the sinking fund were raised for purposes described in the sinking fund forecast.

The adjudicator noted – in response to the comment made by the applicant, from an order made for Parkwood Villas;
The legislative provisions clearly indicate that the budgets contain ‘estimates’ of necessary expenditure. There is no suggestion in the legislation, either in the provisions relating to the budgets or relating to the control of spending, that budgets set the limit of expenditure on any line item or that spending cannot be approved on any specific project if that would put the spending on that budget line item above the budget estimate for that item. The reality of budgeting is that some items will be overestimated and some will be underestimated, because in some areas it can be legitimately difficult to estimate what expenditure may be necessary.

They further noted:
There is no requirement that funds must be ‘allocated’ for a specified purpose, nor any requirement to raise a special levy for an unbudgeted expenditure if there are otherwise sufficient monies in the funds
The request from the applicant to have the Sinking Fund Budget declared invalid & the motion for the works be declared void and of no effect was dismissed.
Improvement or Maintenance *

*Improvements are different from general repair and maintenance spending, and are generally classed as optional spending.
As a general rule:
– Maintenance includes a repair that leaves the item largely unchanged, and the replacement of an item that cannot be repaired.
– An ‘improvement’ is the addition or alteration of a thing so that a new item is created.
Has Body Corporate previously authorised any improvements by Ordinary Resolution this financial year? *?

*may only be approved once per financial year
Has Body Corporate previously authorised any improvements by Ordinary Resolution this financial year? **

**may only be approved once per financial year

Result: Ideally, this require motion to strike special Levy at a General Meeting


*The confusion may come about due to the wording of the BCCM regulation module noting “If a liability arises for which no, or inadequate provision, is made in the budget, a special contribution must be raised” and how this is interpreted.

In an adjudicators order referenced to Evolution Apartments, a lot owner sought an order from the Commissioners Office that foyer refurbishment works not be permitted to proceed on the basis that the works did not form part of any forecast or the sinking fund budget and that all funds held in the sinking fund were raised for purposes described in the sinking fund forecast.

The adjudicator noted – in response to the comment made by the applicant, from an order made for Parkwood Villas;
The legislative provisions clearly indicate that the budgets contain ‘estimates’ of necessary expenditure. There is no suggestion in the legislation, either in the provisions relating to the budgets or relating to the control of spending, that budgets set the limit of expenditure on any line item or that spending cannot be approved on any specific project if that would put the spending on that budget line item above the budget estimate for that item. The reality of budgeting is that some items will be overestimated and some will be underestimated, because in some areas it can be legitimately difficult to estimate what expenditure may be necessary.

They further noted:
There is no requirement that funds must be ‘allocated’ for a specified purpose, nor any requirement to raise a special levy for an unbudgeted expenditure if there are otherwise sufficient monies in the funds
The request from the applicant to have the Sinking Fund Budget declared invalid & the motion for the works be declared void and of no effect was dismissed.

Result1: Committee Can Approve, One Quote is sufficient


Determination Logic 1: 1 M-CSL<=MSL-C<=CSL

Committee Spending Limit < = Major Spending Limit
Cost < = Committee Spending Limit

Result2: Motion must go to a General Meeting, One Quote is sufficient


Determination Logic 2: M|CSL<=MSL|C>CSL|C< =MSL

Committee Spending Limit < = Major Spending Limit
Cost > Committee Spending Limit
Cost < = Major Spending Limit

Result3: Motion must go to a General Meeting, TWO Quotes are required


Determination Logic 3.M|CSL<=MSL|C>CSL|C > MSL

Committee Spending Limit < = Major Spending Limit
Cost > Committee Spending Limit
Cost > Major Spending Limit

Result4: Committee Can Approve, One Quote is sufficient


Determination Logic 4.M|CSL>MSL|C< =MSL

Committee Spending Limit > Major Spending Limit
Cost < = Major Spending Limit

Result5: Committee Can Approve, TWO Quotes are required


Determination Logic 5.M|CSL>MSL|C > MSL| C< = CSL

Committee Spending Limit > Major Spending Limit
Cost > Major Spending Limit
Cost < = Committee Spending Limit

Result6: Motion must go to a General Meeting, TWO Quotes are required


Determination Logic 6.M|CSL>MSL|C > MSL| C > CSL

Committee Spending Limit > Major Spending Limit
Cost > Major Spending Limit
Cost > Committee Spending Limit

Result7: Committee Can Approve, One Quote is sufficient


Determination Logic 7.I|C< = BIL|CSL< = MSL | C< = CSL

Cost < = Basic Improvement Limit
Committee Spending Limit < = Major Spending Limit
Cost < = Committee Spending Limit

Result8: Motion must go to a General Meeting, One Quote is sufficient


Determination Logic 8.I|C< = BIL|CSL< = MSL | C > CSL | C< = MSL

Cost < = Basic Improvement Limit
Committee Spending Limit < = Major Spending Limit
Cost > Committee Spending Limit
Cost < = Major Spending Limit

Result9: Motion must go to a General Meeting, TWO Quotes are required


Determination Logic 9.I|C< = BIL|CSL< = MSL | C > CSL | C > MSL

Cost < = Basic Improvement Limit
Committee Spending Limit < = Major Spending Limit
Cost > Committee Spending Limit
Cost > Major Spending Limit

Result10: Committee Can Approve, One Quote is sufficient


Determination Logic 10.I|C< = BIL|CSL> MSL | C < = MSL

Cost < = Basic Improvement Limit
Committee Spending Limit > Major Spending Limit
Cost < Major Spending Limit

Result11: Motion must go to a General Meeting, TWO Quotes are required


Determination Logic 11.I|C< = BIL|CSL> MSL | C > MSL | C< = CSL

Cost < = Basic Improvement Limit
Committee Spending Limit > Major Spending Limit
Cost > Major Spending Limit
Cost < = Committee Spending Limit

Result12: Must wait until next financial year to consider improvement by Ordinary Resolution or may consider by Special Resolution. Two Quotes Required.


Determination Logic 12.I|C< = BIL|CSL> MSL | C > MSL | C > CSL | C< = ORIR | BC ONCE YES|

Cost < = Basic Improvement Limit
Committee Spending Limit > Major Spending Limit
Cost > Major Spending Limit
Cost > Committee Spending Limit
Cost < = Ordinary Resolution Improvement Range
BC previously authorised once this financial year- YES

Result13: Motion must go to a General Meeting, Ordinary Resolution, TWO Quotes are required


Determination Logic 13.I|C< = BIL|CSL> MSL | C > MSL | C > CSL | C< = ORIR | BC ONCE NO|

Cost < = Basic Improvement Limit
Committee Spending Limit > Major Spending Limit
Cost > Major Spending Limit
Cost > Committee Spending Limit
Cost < = Ordinary Resolution Improvement Range

Result14: Motion must go to a General Meeting, Special Resolution Required, TWO Quotes are required


Determination Logic 14.I|C< = BIL|CSL> MSL | C > MSL | C > CSL | C> ORIR

Cost < = Basic Improvement Limit
Committee Spending Limit > Major Spending Limit
Cost > Major Spending Limit
Cost > Committee Spending Limit
Cost > Ordinary Resolution Improvement Range

Result15: Must wait until next financial year to consider improvement by Ordinary Resolution or may consider by Special Resolution. Two Quotes Required.


Determination Logic 15.I|C > BIL| C< = ORIR | BC ONCE YES

Cost > Basic Improvement Limit
Cost < = Ordinary Resolution Improvement Range
BC previously authorised once this financial year- YES

Result16: Motion must go to a General Meeting, Ordinary Resolution, TWO Quotes are required


Determination Logic 16.I|C > BIL| C< = ORIR | BC ONCE NO

Cost > Basic Improvement Limit
Cost < = Ordinary Resolution Improvement Range
BC previously authorised once this financial year- NO

Result17: Motion must go to a General Meeting, Special Resolution Required, TWO Quotes are required


Determination Logic 17. I|C > BIL| C > ORIR

Cost > Basic Improvement Limit
Cost > Ordinary Resolution Improvement Range
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