Summary:

Strata company bank accounts, whilst mainly free of everyday transaction fees, do not pay interest. Therefore, some Strata Companies may select to 'park' additional funds in an interest bearing account.  

More Information

Some Strata Companies, especially where there is a large reserve fund for future planned large scale capital works, can find themselves with a large balance. Where the spend is not planned to go ahead for a few years, then strata companies may chose to put money into an investment account., and will pay interest on the balance.

However, Strata Companies (like any entity) must lodge tax returns on income, which comes with an expense.

A Strata Manager is not licensed to prepare BAS or tax documents, so the task is outsourced to a licensed tax accountant. The cost of the preparation may exceed the interest earned on the balance, effectively meaning that there is no net gain to the strata company.

As each strata company is different, this is something you should discuss with your fellow Councillors. If you want to proceed, contact your Strata Manager, who can provide you with more details that are specific to your scheme.  

Example Case:

A older complex of 49 lots in Joondanna had a healthy reserve fund of in excess of $100,000 in an investment account. They needed all of this money, plus additional funds to pay for works which had been highlighted on a recently prepared building condition report. 

The COO instructed the strata manager to move the funds out of the investment account and into their regular bank account so that they had money on hand for the stage payments as per their contract with the appointed builder.

After the repairs had been carried out, the strata company had all levy reserve fund contributions paid into their regular account. It will continue this way until such a time that the funds build up again to a level which warrants making use of an investment account.