What happens if Strata Council runs over the annual strata budget

We get it. Strata Corporations are living, breathing entities, and sometimes stuff pops up that needs to be paid for prior to the AGM, even if it’s not in the budget.

What to do when you max out your strata budget

When this happens, you need to ensure that you’re following the correct procedure. Now certainly you can borrow from your CRF. You can also call an SGM to obtain a ¾ vote. These are always options, but keep in mind that you are also allowed to overspend on your operating budget without taking it to the Owners for a ¾ vote if;

The expenditure, does not exceed;

  1. the limits set out in the bylaws
  2. the lesser of $2000, or 5% of the total contributions to the operating fund for the current fiscal year. For example, if total strata fees for your strata corporation add up to $50,000, you would be allowed to spend $2000, NOT $2500.

Keep in mind that the expenditure must be the minimum amount that Strata Council deems necessary to spend in order to ensure safety and prevent loss or damage. You must also let the owners know ASAP.

Very often this can be the best solution for strata councils, as opposed to dipping into their CRF or asking the owners for money via a special levy, particularly if you’re operating in a surplus zone and your cash flow looks good.

Looking for some Property Management help or advice? Reach out to our Strata Management experts today to see how we can help you out.

Chris Stepchuk

Recent Posts

What’s the difference between strata rules and bylaws?

The biggest difference between rules and bylaws, is that rules can only govern common assets…

5 days ago

Why the cheapest strata quote might not always be your best!

When it comes to awarding work to contractors, Strata Councils are notorious for choosing the…

2 weeks ago

Property Management has very little to do with actually managing properties!

This may seem completely counterintuitive, but the reality for most property managers and strata agents…

3 weeks ago

Can the strata ban election signs?

It's Federal election time here in Canada, and we see Liberal, Conservative, and NDP signs…

4 weeks ago

Will AI replace my strata manager?

This is something that we’ve been thinking about A LOT lately! AI is everywhere right…

1 month ago

How does Strata Earthquake insurance work?

All strata insurance policies, at least every single one that I have ever seen, has…

1 month ago