The shocking truth about the money in your strata funds

One of the largest costs of owning a property can be your quarterly strata fees.

In general terms, strata fees cover the costs of building and public liability insurance, building-essential fire services, common area utilities, administration and management, cleaning, common area repairs and maintenance such as the upkeep of lifts, gyms, pools, car parking and access systems, and may also, if prescribed, require additional funds be set aside in a maintenance fund for future major capital repair and replacement items.

The funds often amount to very large sums, raising the question: how safe is your money?

Owners usually don’t see their fund’s balance until the annual general meeting (AGM), which occurs, as the name suggests, only once a year.

And even when owners are shown their fund balance at the AGM, some management companies do not actually show the actual physical amount in the owners corporation bank account.

Disappointingly, there are owners corporation management companies deliberately showing inaccurate fund statements and misleading owners, which has, in some cases, ultimately ended in the misappropriation of funds.

To the surprise of most people, even bank statements cannot be fully trusted: there have been cases where forged bank statements have been created in owners corporations, again to mislead and deceive owners so that funds can be pilfered from owners corporation funds.

Unfortunately, most strata management have no governance framework, warned Randolph Morrison, Chief Executive Officer (CEO) of Beyond Strata, leaving funds vulnerable to misappropriation.

In 2014, Strata Manager Rachael Kwawegen, the owner of a boutique strata company, was sentenced to 15 months in prison for stealing more than $1 million from owners’ trust accounts.

“Owners are feeling frustrated”

With such large sums of money being held in trust, owners also often become frustrated because owners corporation funds are tied up without an ability to attract a financial return.

According to Mr Morrison, “Owners are feeling frustrated, helpless and there are an increasing number of heated arguments taking place at AGMs.”

Beyond Strata: transparency gives you peace of mind

At Beyond Strata, our strict, prudent financial management practices ensure that member’s financial information is accurate, up to date, accessible, safe and secure at all times.

We have a community portal which shows monthly bank statements and all the invoices paid.

Our easy-to-use, online platform means you can access all your owners corporation data no matter where you are, providing complete transparency.

Owners can match invoices against bank statements – a system not offered by any other owners corporation manager.

For large owners corporation, where millions of dollars are sometimes sitting in funds, the committee can request real-time access to their owners corporation bank account.

Again, no other managing companies provide this level of transparency.

Beyond Strata is proud to say it is the only company the provides 100 per cent transparency to owners through its state-of-the-art intellistrata platform.

“An industry where there is no transparency allows rampant corruption to exist under the radar,” said Mr Morrison. By the same token, where transparency thrives, owners have peace of mind.

Beyond Strata is committed to giving control back to property owners so that owners are informed at all times of every decision regarding their property.

Author: Beyond Strata

Beyond Strata is a professional owners corporation management firm that was founded on overarching principles of professionalism, honesty, integrity, openness and transparency. We strive to continually improve our people, culture, technology and processes improving our firm’s ability to provide the highest level of service possible to our clients.

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