We need to have some significant maintenance done and there is no money in the bank… We have suggested that there needs to be an emergency levy and sinking fund to prevent this from happening again but the other owners say they can’t afford it. We want to resign as volunteer managers and appoint a professional manager but imagine that if we do then one of the other owners will volunteer and we will continue in the same situation. What advice can you give us? – Brenda, VIC

Q: My husband and I are the very naïve volunteer managers of a set of 4 units.

We took over the management from a professional company 6 years ago because we were very unhappy with their service. There was no money in the bank and they didn’t seem to do anything.

Since then we have been collecting the admin fund and generally thought we were managing OK. However, we now need to have some significant maintenance done and there is NO money in the bank.

We have suggested that there needs to be an emergency levy and sinking fund to prevent this from happening again but the other owners say they can’t afford it.

We have an admin fund that just covers known annual costs but NO sinking fund and no money in the bank.

We want to resign as volunteer managers and appoint a professional manager but imagine that if we do then one of the other owners will volunteer and we will continue in the same situation.

What advice can you give us?

 

A: It is unfortunate that you did not see value in your previous owners corporation management company, however, self-managing does come with its own set of complications.

It is important that there is an established maintenance fund. This allows funds to be generated for the purpose of maintenance works, as well as emergency matters, such as urgent repairs.

We recommend as you’ve proposed, appointing professional managers. A good owners corporation management provider will be able to provide your property with a tailored approach that is suitable to its needs. You may wish to get a free assessment from Body Corporate Services (BCS) Victoria: https://picagroup.com.au/subsidiary/bcs-vic/get-a-quote/. They will be able to offer owners corporation management services to meet your needs and are experienced in both financial control and maintenance coordination.

Other options may include borrowing the required amount to cover the maintenance costs and repay the amount at a later date. However, we do not recommend doing this without getting advice from a professional management company first.