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Disclosure
As an owners corporation manager, you must disclose:
- your costs for services to the owners corporation or its committee
- any commercial or financial interest in other professionals’ practices that you refer clients to
- any inducements from suppliers whose products you recommend or use.
Failing to make disclosures or obtain informed financial consent from clients may raise issues of misleading and deceptive conduct.
The Director of Consumer Affairs Victoria can bring proceedings before the Magistrates’ Court or the Victorian Civil and Administrative Tribunal (VCAT) for a breach of the Owners Corporations Act 2006 or the Australian Consumer Law.
VCAT can make orders including:
- penalties
- damages
- injunctions
- refunds
- corrective advertising
- enforceable undertakings.
Financial reporting
As a manager, you will usually be responsible for preparing financial statements for the owners corporation. You must prepare and keep records and prepare financial statements that:
- cover all income, expenditure, assets and liabilities
- provide accurate reports of the financial situation
- separate maintenance fund records and accounts
- explain all financial transactions for taxation purposes
- can be conveniently and properly audited.
Auditing of financial statements
You must keep financial records to enable prescribed owners corporations to have their financial statements audited at the end of each financial year.
All other owners corporations can choose whether or not they want an audit.
Audits must be carried out by:
- a registered company auditor
- a firm of registered company auditors
- a person who is a member of CPA Australia, the Institute of Chartered Accountants in Australia or Institute of Public Accountants, or
- any other person approved by the Director of Consumer Affairs Victoria.
Bank accounts
All fees levied by an owners corporation must be paid into a bank account of the manager or owners corporation. As the manager, you hold all money in trust for the owners corporation and must account separately for the money held for each owners corporation.
If money is held in trust or for the benefit of another person, then general law duties arise, including:
- inquiring into the terms and state of the trust
- obeying the terms of the trust
- not making a personal profit or advantage from the trust
- accounting for and providing information on the trust
- keeping accurate and up-to-date records
- administering the trust personally
- exercising reasonable care not to mix trust monies
- acting impartially.