With the end of the financially year upon us it might be a good time to ask – Do you know when your strata scheme’s financial year ends?
It is important to remember that a body corporate’s financial year is different to the regular financial year. Instead of commencing on the 1 July each year, the start of a scheme’s financial year is based on when the scheme was registered.
For example, if a scheme was registered on 3 September, its financial year defaults to 1 September to 31 August.
Schemes established before 1997 under different legislation are called ‘existing plans’.
For an existing plan, the financial year ends on the last day of the month that the first annual general meeting was held (e.g. if the first annual general meeting was held on 10 May 1993, the financial year will be 1 June to 31 May).
Knowing the dates of a scheme’s financial year is extremely important because it determines things like:
- when the annual general meeting (AGM) must be held by each year;
- relevant accounting periods for the scheme;
- deadlines for committee nominations; and
- deadlines for an owner to submit a motion for the AGM.
Bodies corporate do not have the power to change their financial year themselves. This can only be done by making an application to the Office of the Commissioner for Body Corporate and Community Management.
Here are 10 things every committee member should consider at the end of a scheme’s financial year.
- Their nomination.
Committee members must renominate every year and preferably prior to the schemes year end to avoid losing their position.
- Their financial standing.
Committee members cannot owe a Body Corporate debt if they wish to renominate.
- Motions submitted by Lot Owners.
Are there any contentious issues being raised? Are there motions that can be considered at a Committee level rather than a general meeting?
- The Body Corporate’s Financial Standing and future outlook
What does the body corporate’s financial situation look like? Is there adequate monies in both the sinking and admin fund to cover future expenses? Will levies need to be increased?
- Large projects
Are there and major works that may need to be undertaken by the Body Corporate in the next few years – painting, lifts refurb for example.
- Completing a full inspection of the scheme.
When was the last time you walked around your property? Taking the time to inspect your scheme land and buildings with one or two other Committee Members is a great way to understand the needs of your scheme.
- Service contracts and their current performance
Are you happy with your contractors? Now is the time to review service contracts to evaluate service quality and value for money.
- Compliance and risk mitigation
Has your body corporate met all its compliance obligations?
- Communication with all owners.
Good communication is vital to healthy body corporate community.
- Education and knowledge of general body corporate matters and committee responsibilities.
There is a lot happening in the strata sector and it can be hard to keep up. Just this last year Queensland has had a host of covid regulations come in and out of play as well as new legislation coming into force. Now is the perfect time to educate your committee and make sure you are knowledgeable on general body corporate matters and committee responsibilities.