Community Title
16. Trust Funds
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 08 Jul 2015
- An association has the power to levy its members to raise funds to carry out any maintenance or administrative tasks required in the scheme.
- Monies raised from levies are divided between two types of trust fund. They are called the administrative fund and the sinking fund.
- The administrative fund is used for:
- everyday expenses required for looking after a community scheme;
- ongoing maintenance of association property including its personal property;
- payment of insurance premiums; and
- the money in the administrative fund pays for any contributions levied on it by the primary association if the association is a subsidiary body (such as a neighbourhood association within a community scheme).
- The sinking fund is used for:
- long term planning issues;
- long term maintenance issue such as painting association property;
- capital expenses;
- renewing or replacing fixtures on association property; and
- major repairs such as replacement of roofs and upgrading garages.
- The association may transfer money from one fund to another to cover unexpected costs. However they are required by law to issue a special levy to recover the deficit in the fund within three months of the transfer.
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