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COMMUNITY LAND MANAGEMENT ACT 1989 - SCHEDULE 1

SCHEDULE 1 – Functions of associations

(Sections 5, 6, 7)

Part 1 - Preliminary

1 Definition

In this Schedule--

"property" means, in relation to an association, its association property and personal property.

Part 2 - Property

2 Management and maintenance of property

(1) An association must control and manage its open access ways and private access ways, and all other parts of its association property, and must do so for the benefit of its members.
(2) Subclause (1) does not authorise any action that would be inconsistent with--
(a) an Act in so far as, under section 116, it applies to an access way, or
(b) a function in so far as, under that section, it may be exercised on, or in relation to, an access way.
(3) An association must properly maintain, and keep in a good and serviceable state of repair, any part of its association property that is an access way.
(4) An association must inform the consent authority if any part of the association property is to be, or is, used for commercial purposes.
(5) In this clause--

"access way" means an open access way or a private access way.

3 Mail

(1) An association must provide proper means for the receipt of its mail.
(2) The means provided--
(a) must be clearly identified as a receptacle for the receipt of mail addressed to the association, and
(b) may be provided in more than one position.

4 Maintenance and replacement of property

(1) An association must maintain its property in good condition.
(2) An association must, when necessary, replace fixtures or fittings that are part of its property.
(3) An association must, when necessary, replace its personal property.

5 Insurance

An association must effect and maintain such insurance as is necessary to avoid committing an offence under section 39 or 40.

Part 3 - Records

6 Record of proceedings

An association is guilty of an offence if it does not record minutes of its proceedings or if it does not include in the record details of motions passed.

: Maximum penalty--5 penalty units.

7 Notices and orders served on association

(1) An association is guilty of an offence if it does not record a summary of each notice or order served on it.
(2) An association is guilty of an offence unless it also records--
(a) the date and manner of service of the notice, and
(b) the part of the parcel affected, and
(c) the date for compliance, and
(d) the date of compliance.
(3) An association or strata corporation is guilty of an offence if, on receipt of a notice served on it under Division 2 of Part 4 (which relates to applications for orders on disputes) it does not at once serve a copy on each person whose name appears on the association roll or strata roll.
: Maximum penalty--2 penalty units.

8 Correspondence sent and notices given

An association must keep copies of--

(a) all correspondence sent by it, and
(b) all notices of meetings of the association and its executive committee, and
(c) all other notices given by it.

9 Retention of records

An association must retain for the prescribed period--

(a) the records of the proceedings at its meetings, and
(b) the accounting records it is required to keep, and
(c) the summary and other particulars required to be recorded in relation to notices and orders served on it, and
(d) the financial statements prepared by it, and
(e) correspondence received by it and copies of correspondence sent by it, and
(f) copies of notices of its meetings and of meetings of its executive committee, and
(g) proxies delivered to it, and
(h) voting papers for resolutions at its meetings, and
(i) voting papers for election of its executive committee and officers, and
(j) records served on it by its managing agent, and
(k) notices specifying an address for service, and
(l) any other prescribed document.

Part 4 - Finance

10 Accounts to be kept

An association is guilty of an offence if it does not keep the prescribed accounting records.

: Maximum penalty--5 penalty units.

11 Financial statements

(1) An association must prepare financial statements in accordance with this clause and present them at each annual general meeting.
(2) The first financial statement must be for the period that--
(a) begins on the date of incorporation of the association, and
(b) ends not earlier than 2 months before the first annual general meeting.
(3) Succeeding financial statements must be for each period that--
(a) begins at the end of the period covered by the last preceding financial statement, and
(b) ends not earlier than 2 months before the annual general meeting at which it is to be presented.
(4) The financial statements are to comprise only the following matters--
(a) a statement of income and expenditure for the administrative fund,
(b) a statement of income and expenditure for the sinking fund,
(c) a statement of income and expenditure for any other fund that is the property of the association.
(5) Each financial statement must specify the fund, and the period, for which it is prepared.
(6) If the period is a period referred to in subclause (3), the financial statement for a fund must also specify the following--
(a) the balance carried forward in the fund from the previous period,
(b) the particulars and amount of each item of income of the fund received during the current period,
(c) the particulars and amount of each item of expenditure from the fund during the current period,
(d) the amount of the contribution to the fund determined for each association or person liable to make such a contribution,
(e) the balance outstanding for each such contribution,
(f) the cash in the fund at the end of the current period,
(g) the balance of the fund,
(h) in respect of each liability to contribute to the fund--any unpaid arrears and any balance outstanding,
(i) the extent to which, at the end of the current period, the fund is in debit or credit.
Note : The financial statements of an association prepared under this clause can deal only with income and expenditure from the administrative and sinking funds and any other fund authorised to be established under this Act. Those financial statements are therefore separate from any other financial statements that might be prepared in relation to the community scheme, for example, financial statements in relation to the provision of services for a retirement village.

11A Auditing of accounts and financial statements

If an association determines that the accounting records and financial statements of the association are to be audited, the audit must be carried out in accordance with Australian Auditing Standards.

12 Administrative and sinking funds

(1) An association must establish an administrative fund and a sinking fund.
(2) An association must pay into its administrative fund--
(a) the contributions levied on, and paid by, members for payment into the fund, and
(b) the proceeds from disposal of personal property, and
(c) fees paid to it for inspection of its records and the provision of information and certificates relating to the records.
(3) An association must pay into its sinking fund--
(a) the contributions levied on, and paid by, members for payment into the fund, and
(b) any other money received by it that is not payable into the administrative fund.
(4) Money received by an association in settlement of an insurance claim must be paid into either the administrative fund or the sinking fund.
(5) A subsidiary body must--
(a) pay into its administrative fund or sinking fund, or
(b) distribute between its administrative fund and sinking fund,
any payment made to it by the community association or precinct association on a distribution of surplus funds under clause 17.
(6) Money received by an association for payment into a fund must be paid into an account with a bank, building society or credit union in the name of the association unless the performance of this duty has been delegated to a managing agent.

13 Contributions to administrative fund and sinking fund

(1) An association must estimate how much money it will need to credit to its administrative fund--
(a) to maintain its association property in good condition, and
(b) to provide for payment of insurance premiums, and
(c) if the association is a subsidiary body--to pay contributions levied on it by the community association or precinct association, or both, and
(d) to meet other recurrent expenses.
(2) An association must estimate how much money it will need to credit to its sinking fund--
(a) for painting or re-painting structures that are part of its association property, and
(b) to acquire personal property, and
(c) to replace personal property, and
(d) to replace fixtures or fittings that are part of its association property, and
(e) to meet other expenses of a capital nature.
(3) Estimates under subclauses (1) and (2)--
(a) must be made not later than 1 month after incorporation of the association, and
(b) after that, as occasion requires,
at a meeting of the association that has before it a statement of the existing financial situation and an estimate of receipts and payments.
(4) The association must impose a levy on each member for a contribution to provide the amount estimated under subclauses (1) and (2).
(5) If an insurance premium is increased because of the use to which a development lot, a former development lot or a neighbourhood lot is put by a member of an association, so much of a levy payable by the member as is attributable to insurance premiums may be calculated to reflect the increase.
(6) If the association is subsequently faced with other expenses it cannot at once meet from either fund, it must impose a levy on each member for a contribution to a fund in order to meet the expenses.
(7) If an association--
(a) transfers money between its funds, or
(b) makes a payment from one fund that should have been made from the other,
it must, within 3 months after the transfer or payment, make an estimate under subclause (1) if the depleted fund is the administrative fund or under subclause (2) if the depleted fund is the sinking fund.
(8) A contribution is payable by periodic instalments if the association so decides.

14 Investment of funds

(1) An association may invest money held by it in its administrative fund or sinking fund--
(a) in any way in which the law allows trust funds to be invested, or
(b) in accordance with the regulations.
(2) Income from an investment must be paid into the fund from which the money invested was derived.

15 Borrowing

An association may borrow money and may give such security for its repayment with interest as does not charge its association property.

16 Payments from administrative and sinking funds

An association must not make payments from its administrative fund or sinking fund other than--

(a) payments of the kind in respect of which estimates have been made under clause 13 (1) or (2), and
(b) payments made under clause 17 on a distribution of a surplus in the fund.

17 Distribution of surplus funds

(1) An association may, by unanimous resolution, distribute between its members any money in its administrative fund or sinking fund that is not, in the opinion of the association, required for the purposes of either fund.
(2) A distribution to a member by a community association must be made in the same proportion as is borne to the total unit entitlement for the community scheme--
(a) if the member is the proprietor of a development lot--by the unit entitlement for the development lot, or
(b) if the member is a precinct association--by the unit entitlement for the former community development lot, or
(c) if the member is a neighbourhood association or strata corporation--by the unit entitlement for the former community development lot.
(3) A distribution to a member by a precinct association must be made in the same proportion as is borne to the total unit entitlement for the precinct scheme--
(a) if the member is the proprietor of a precinct development lot--by the unit entitlement for the precinct development lot, or
(b) if the member is a neighbourhood association or a strata corporation--by the unit entitlement for the former precinct development lot.
(4) A distribution to a member of a neighbourhood association or a strata corporation must be made in the same proportion as is borne to the total unit entitlement for the neighbourhood scheme or strata scheme by the unit entitlement for the neighbourhood lot or strata lot of which the member is the proprietor.
(5) If--
(a) a community association is to make a distribution and there is an enrolled mortgagee of a community development lot, or
(b) a precinct association is to make a distribution and there is an enrolled mortgagee of a precinct development lot, or
(c) a neighbourhood association is to make a distribution and there is an enrolled mortgagee of a neighbourhood lot,
the distribution must be made as provided by subclause (6).
(6) A distribution referred to in subclause (5) must be made--
(a) in accordance with the joint directions of the proprietor of the lot and the mortgagee, or
(b) if they cannot agree--in accordance with an order of the court that, under subclause (7), has jurisdiction in the matter.
(7) An order to resolve a disagreement under subclause (6) may be made--
(a) if a question of title to land is involved and the question is not merely incidental--by the Supreme Court, or
(b) in any other case--by a court that has jurisdiction to give judgment for a debt equal to the amount in dispute.

Part 5 - General

18 Management statement

An association must keep up-to-date the registered copy of the management statement and the copy included in the association roll kept under Schedule 3.

19 Decisions

(1) A decision by an association must be implemented by it.
(2) Subclause (1) does not prevent amendment or revocation of a decision.



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