Is your Building Missing a few Strata Dollars?

or, give me back my missing strata money …

You’d think that strata buildings would notice if money is missing, given how frugal they are.  But, in NSW there’s more than half a million dollars of uncollected strata money just sitting around in government coffers.  Read on to find out how and why that’s happened, and, what strata buildings can do about it.

[5.75 minutes estimated reading time, 956 words]

Introduction

In most of Australia, when a strata building appoints a strata manager, they must keep their strata money in a regulated trust account. As a result, there’s a variety of controls on what they can and can’t do with that money and how they should report to strata buildings and regulators about that trust money.

So, you’d think that strata money was pretty tightly managed and rarely went missing: apart from instances of fraud or misappropriation. 

Plus, strata buildings and strata owners would miss the money if it disappeared given how frugal [I’m being polite here] they can be … wouldn’t they?  But, apparently not always.

In NSW, there’s currently more than half a million dollars missing from strata building trust accounts. 

We’ll … it’s not exactly missing.

Rather, it’s being held by the NSW state government waiting for the strata buildings to come and collect it.

How did strata money end up with the NSW Government?

That’s a good question with both legal and practical answers.

Since 1995 [more than a little while ago] trust account controls have included provisions in the Unclaimed Money Act 1995 that require anyone holding money in a trust account under the Property and Stock Agents Act 2002 to pay it to the NSW Chief Commissioner of Revenue when it becomes unclaimed.

Money in a trust account becomes unclaimed when it has been in that trust account for more than two years and the owner of the money cannot be located by the licensee of the trust account [the strata manager].

The Unclaimed Money Act 1995 also requires money in a trust account of a licensee that ceases trading, becomes insolvent, or, dies to be paid to the NSW Chief Commissioner of Revenue.

Licensees must also make reasonable efforts to locate the owner of the trust money, return it to them, or, pay it to the Commissioner within 3 months.  Otherwise, they can face penalties of up to $5,500 and additional penalties of up to $550 for each day of non-compliance.

How much unclaimed strata money is there in NSW?

There’s quite a lot of unclaimed strata money in NSW. 

The last time I looked, there was $556,188.22 of unclaimed strata building money with the Commissioner of Revenue. 

That unclaimed strata money is held on behalf of 696 strata buildings with amounts for each ranging from as little as $24.37 right up to a whopping $43,172.50 [is this your building’s money ???].

Surprisingly [or not], there’s also $15,690.35 of unclaimed money being held on behalf of five strata manager licensees too.

I assume, but haven’t checked, that there’s also plenty of unclaimed strata money in other Australian states.

How did the strata money end up there?

Strata money ends up being unclaimed and transferred to the NSW Chief Commissioner of Revenue in a variety of ways which include the following.

Usually, it happens when a strata building changes strata manager and either:

• it never collects all the trust account money because it doesn’t organise it at all out of ignorance or laziness [for instance, when it becomes self managed],

• it doesn’t actually get all of the trust account money transferred [because the balance changes between the transfer request and the transfer], and/or

• the strata manager makes a mistake in the trust account transfer amount, leaving some behind and the new manager doesn’t know or realise it.

At other times, all the trust account money gets transferred when the strata building changes strata manager but afterward:

• earlier payments made from the trust account fail and are returned to the old trust account,

• refunds from creditors are returned to the old trust account,

• strata owners unknowingly pay strata levies to the old trust account, and/or

• GST, income tax, or other credits due to the strata building are later paid into the old trust account. 

And, sometimes the money is left in the old trust account when a strata manager ceases trading, has a Fair Trading administrator appointed to it, becomes insolvent, or, dies.

When those things happen, the strata money just sits in the old trust account and is ignored by the old strata manager [who isn’t interested] and unknown to the strata building or the new strata manager.

So, there’s no standard or typical way it happens, just like there’s no standard or typical strata building.

Can strata buildings get their strata money back? And, if so, how?

Unclaimed strata money can be recovered from NSW Revenue by following some simple procedures.

First, the strata building searches for any money it thinks may be missing at NSW Revenue’s Unclaimed Money webpage to establish it’s there and how much it is.

Secondly, the strata building assembles and/or prepares the proof of identity documents verifying the strata building’s identity and the applicant’s authority for you to act on its behalf.  This can be a bit more difficult because the standard proof of identity documents NSW Revenues identifies on its website aren’t strata friendly.  So, you’ll need to know what you’re doing at this step.

Thirdly, the strata building completes and lodges the Unclaimed Money Claim Form plus the proof of identity and ownership documents with NSW Revenues.

Fourthly, the strata building liaises with NSW Revenue to complete the claim and receive payment.

Then, hey presto … your strata building’s got some extra [???] strata money.

It’s Video time

Here’s a handy little video about unclaimed trust money and how to get it back that’s been produced by NSW Revenue.

Conclusions

I’m always pleased to discover a strata surprise like more than half a million dollars of unclaimed strata money ready for collection.

Hopefully, some of the money is yours and you can get it back.

If not, then maybe I’ll go looking for it.

August 08, 2022

Francesco ...