Body corporate bank accounts

The requirement for your body corporate to have an account and how it should be managed depends on which regulation module applies to your scheme.

This information relates to the following regulation modules:

Standard Module
Accommodation Module
Small Schemes Module
Commercial Module

The Specified Two-lot Schemes Module does not require a bank account, so this information is not relevant to those schemes.

The financial institution account

A body corporate must have 1 or more bank accounts kept in its name. The account must be at a financial institution such as a bank, building society or credit union.

An account opened after 4 March 2003 must only be opened with the consent of the body corporate.

This account can be run by either:

anyone authorised by the body corporate (e.g. at least 2 members of the committee)
a body corporate manager or an associate of the manager who is authorised by the body corporate to operate the account.

Refer to section 151 of the Body Corporate and Community Management Act 1997 (the BCCM Act) for further information on the bank account requirements.

Body corporate manager

A body corporate manager can be authorised to operate a body corporate's bank account.

A body corporate manager cannot make decisions on what and when money is spent from the account and must ensure proper decisions are made before spending either by the:

body corporate (general meeting)
the committee (committee meeting or vote outside a committee meeting).

The body corporate can tell the financial institution in writing if the body corporate manager’s engagement has ended. They must complete a change of signatories form (form 2) to change the signatories on a body corporate bank account.

The financial institution must not let the body corporate manager operate the account after this notice has been given.

Statement of accounts

The body corporate must keep proper accounting records and prepare them for each financial year.

The statement of accounts must:

show the income and spending of the body corporate for the financial year
include a statement of assets and liabilities
include corresponding figures for the previous financial year (if there was one).

A copy of the statement of accounts must be sent with the notice of annual general meeting.

Cash or accrual

The following information is relevant only to schemes registered under either the:

Standard Module
Accommodation Module
the Small Schemes Module.

The statement of accounts can be prepared on a cash or accrual basis.

If the accounts are prepared on a cash basis, they must include information about:

total contributions paid in advance to the administrative and sinking funds
total contributions in arrears and total outstanding penalties
balances for all financial institution accounts
all outstanding receipts and payments.

If the accounts are prepared on an accrual basis, they must show the assets and liabilities of the body corporate at the end of the financial year.

The statement of accounts must include:

corresponding figures for the previous financial year
all remuneration, allowances and expenses paid to committee members.

Payments to committee members must be split into:

remuneration or allowances
expenses

travel
accommodation
meals
other expenses.

Administrative and sinking funds

There are rules on how to manage the administrative and sinking funds. These include:

funds must not be transferred between the administrative and sinking funds
payments from the administrative or sinking fund can only be made if there is either

a written request for payment
written evidence of payment including for example a receipt

all payments from the administrative or sinking fund must be made from the financial institution account
the administrative and sinking funds may be invested in the way a trustee may invest trust funds
all money received to be credited to the administrative or sinking fund must be paid into the financial institution account held in the name of the body corporate.

Borrowing money

A body corporate can borrow money—the rules are different for each regulation module, including:

getting a bank loan
monetary limits
the type of resolution required to approve the borrowing of money.

The body corporate and the lender would agree on security for the loan.

Standard Module

A decision to borrow money can be decided by ordinary resolution at a general meeting unless the amount to be borrowed is more than $250 multiplied by the number of lots in the scheme.

If it is more, a resolution without dissent is needed.

Accommodation Module and Commercial Module

A decision to borrow money can be decided by ordinary resolution at a general meeting unless the amount to be borrowed is more than $250 multiplied by the number of lots in the scheme.

If it is more, a special resolution is needed.

Small Schemes Module

A decision to borrow money can be decided by ordinary resolution at a general meeting unless the amount to be borrowed is more than $3,000 (in total).