Q: Is the owners corporation allowed to make a profit on the fees charged each year and retain excess money year on year?
Is the owners corporation allowed to make a profit on the fees charged each year and retain excess money year on year? – Ian, VIC
A: In short, yes. It can if the money is in a maintenance fund which may also be sitting in an interest-bearing account.
Having excess money that is retained year on year can be a good thing, and can mean that your owners corporation is managing its finances well. If, for example, an emergency repair was required for the roof, some or all of the funds would be taken from the maintenance fund which has been building up, and owners would have to pay less by way of a special levy, or perhaps nothing at all if there are enough funds to fully cover the associated costs.
If you are ever concerned about the authenticity of how your fees are being collected and used, you may wish to speak to your owners corporation manager or request to have the financial statements audited. To do this, you along with other lot owners will need to decide on it at your next annual general meeting (AGM). For more information on this topic check out our article Financial responsibilities of an owners corporation.