Understanding Body Corporate Disclosure Statements
In Queensland, the law mandates that sellers of lots in community title schemes provide a disclosure statement to prospective buyers before entering into a contract.
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The treasurer of the body corporate often plays a leading role in the committee and the body corporate community more generally. It is a volunteer position which can be very rewarding but also can take an investment of time and effort from the member. <br><br>
Owners who become elected as treasurer often come into the role with:
Even though the role typically attracts individuals with a particular skill or passion for numbers, there are no pre-requisites for the job. Every new building needs a treasurer, and every treasurer has a first time in the role.
Working with our strata management team at BCsystems means you will have an experienced and friendly person at the end of the phone or email who can provide you with as much guidance and support as you need.
Whether you are an experienced hand or a beginner, this article is aimed to improve your experience as treasurer and get the best outcomes for your entire body corporate.
Bodies corporate generally have multiple income streams, which are reported on separately, and often have different taxation treatments:
This is always the main type of funding for a body corporate. Levy income is set by the body corporate and collected from each lot owner. This is mutual income, meaning it is not considered a taxable income or ‘profit’ when the body corporate reports income tax. Levy income is reported on an accrual basis, with any levy arrears or levy pre-payments by owners shown as assets shown on the balance sheet.
Though interest rates are at a historic low, most bodies corporate have one or more term deposit income accounts. Income generated on term deposit investments is non-mutual income derived from a body corporate asset (money), and this is reportable income for the body corporate when it comes to income tax time.
By now you probably gather that body corporate financial management is pretty complex. The body corporate has an obligation to give copies of financial statements to owners each year – but that alone does not do a good job of communicating your goals, priorities and challenges.<br><br>
Great treasurers often:
This does not need to be an onerous task, and if you have generally kept up to date with the finances throughout the year – you might be confident to speak off the cuff at the meeting.
This is something that your strata manager can help you to prepare. We can assist with a record of what big projects or goals you have achieved, changes to your sinking fund forecast, general levy trends across other similar buildings and really assist you to brainstorm the best way to communicate with your owners.
In our experience owners are much more willing to accept budgets and levies if they hear from the treasurer that some thought and work went into setting them, and that the levies are not an arbitrary decision.
If you are unsure about something, don’t be afraid to ask questions. These financials are routine to our team, and we are generally well-practiced at answering any questions about body corporate accounting.
In Queensland, the law mandates that sellers of lots in community title schemes provide a disclosure statement to prospective buyers before entering into a contract.
Understanding how your individual levy amount is calculated can help you appreciate where your money goes and ensure transparency in the management of your community. Here’s a breakdown of the aspects involved in calculating levy amounts.