We get it. Strata Corporations are living, breathing entities, and sometimes stuff pops up that needs to be paid for prior to the AGM, even if it’s not in the budget.
What to do when you max out your strata budget
When this happens, you need to ensure that you’re following the correct procedure. Now certainly you can borrow from your CRF. You can also call an SGM to obtain a ¾ vote. These are always options, but keep in mind that you are also allowed to overspend on your operating budget without taking it to the Owners for a ¾ vote if;
The expenditure, does not exceed;
- the limits set out in the bylaws
- the lesser of $2000, or 5% of the total contributions to the operating fund for the current fiscal year. For example, if total strata fees for your strata corporation add up to $50,000, you would be allowed to spend $2000, NOT $2500.
Keep in mind that the expenditure must be the minimum amount that Strata Council deems necessary to spend in order to ensure safety and prevent loss or damage. You must also let the owners know ASAP.
Very often this can be the best solution for strata councils, as opposed to dipping into their CRF or asking the owners for money via a special levy, particularly if you’re operating in a surplus zone and your cash flow looks good.
Looking for some Property Management help or advice? Reach out to our Strata Management experts today to see how we can help you out.