straita

Levies & Funds

What can strata funds be spent on?

Short answer

Strata funds can only be used for the proper purposes of the scheme. The administrative fund pays for day-to-day running costs; the capital works fund pays for major and long-term works. The two funds must be kept separate, and money generally can’t be spent outside these purposes or moved between funds without proper authority.

What the administrative fund pays for

The administrative fund covers the recurring cost of running the building — for example building insurance, cleaning, gardening, common-area electricity and water, minor repairs and maintenance, and (if one is appointed) the strata manager’s fee. It’s the account the everyday bills are paid from.

What the capital works fund pays for

The capital works fund is the scheme’s long-term savings for major and one-off works — repainting, replacing a lift, re-roofing, resurfacing driveways, significant structural repairs. It’s built up over time so the money is there when a large job falls due, guided by the scheme’s 10-year capital works fund plan.

Keeping the funds separate

Keeping the two funds apart is a legal requirement, not just good practice. Spending the capital works fund on everyday running costs — or dipping into either fund for something that isn’t a proper purpose of the scheme — isn’t allowed without the right authority. If money is genuinely needed to be moved or borrowed between funds, there are rules about doing it and paying it back. Owners are also entitled to see how the money is spent.

Spending inside the lines, transparently

Every payment has to come from the right fund, for a proper purpose, with a record owners can check — and that’s easy to slip on when a committee is doing it by hand. Straita keeps a self-managed scheme’s two funds cleanly separated, flags a payment that doesn’t fit the fund it’s coming from, and keeps the spend record owners can see — so the committee approves the decisions and the bookkeeping looks after itself.

Primary sources