s 38 Management funds and sinking funds
38.—(1) A management corporation must establish and maintain a fund as its management fund. (2) A management corporation must pay into its management fund —(a) all moneys received by it in respect of contributions determined under section 39(1); (b) the proceeds of the sale or other disposal of any movable property that is part of the common property and belongs to the management corporation; (ba) all moneys received by it from the Collector of Land Revenue as an award of compensation under the Land Acquisition Act 1966 for any non‑lot acquisition relating to its strata title plan; (c) any fee received by the management corporation under section 47; (d) any amount paid to the management corporation by way of discharge of insurance claims; (e) interest received on any investment belonging to the management fund; and (f) any income received by the management corporation from the rental of the common property.[26/2014; 35/2017] (3) A management corporation must not disburse any moneys from its management fund other than for the purpose of —(a) meeting its liabilities referred to in section 39(1); (b) carrying out its powers, authorities, duties or functions under this Act; (c) transferring moneys therein not required to meet the liabilities of the management fund to the sinking fund.[35/2017] (3A) The estimated expenses for matters under subsection (3)(d) and (e)* must be included in an annual budget placed before an annual general meeting to be approved by an ordinary resolution.[35/2017] [*Subsection (3)(d) and (e) introduced by section 27(e) of the Building Maintenance and Strata Management Act 2017 has not come into operation] (3B) The management corporation may convene an extraordinary general meeting to approve, by ordinary resolution, a supplementary budget for unforeseen or urgent expenditure for matters under subsection (3)(d) or (e)*.[35/2017] [*Subsection (3)(d) and (e) introduced by section 27(e) of the Building Maintenance and Strata Management Act 2017 has not come into operation] (4) A management corporation must also establish and maintain a fund as its sinking fund. (5) In addition to any moneys transferred under subsection (3)(c), a management corporation must pay into its sinking fund —(a) all moneys received by it in respect of contributions determined under section 39(2); (b) any amount paid to the management corporation by way of discharge of insurance claims and not paid to the management fund; (ba) the proceeds of the sale or other disposal of any immovable property that is part of the common property; (c) all other amounts received by the management corporation and not paid or payable into the management fund; and (d) interest received on any investment belonging to the sinking fund.[35/2017] (6) A management corporation must not disburse any moneys from its sinking fund other than for the purpose of —(a) meeting its liabilities mentioned in section 39(2); or (b) carrying out its powers, authorities, duties or functions under this Act. (7) A management corporation may only invest any moneys in its management fund or sinking fund in any manner permitted by law for the investment of trust funds. (8) A management corporation must pay any moneys in its management fund or sinking fund that are not otherwise invested in accordance with subsection (7) into an account established with a financial institution in the name of the management corporation. (9) A management corporation may borrow moneys and secure the repayment thereof and of any interest in such manner as may be agreed upon by the management corporation and the lender, otherwise than by charging the repayment on the common property. (9A) No moneys in the management fund or sinking fund may be used for any purpose of a collective sale of the property under Part 5A of the Land Titles (Strata) Act 1967 other than for the purpose of convening any general meeting under the Second Schedule to that Act. (9B) The moneys remaining in the management fund and sinking fund as at the date of the legal completion of a collective sale of the property in accordance with Part 5A of the Land Titles (Strata) Act 1967 must be returned as soon as practicable to the subsidiary proprietors of the lots in shares proportional to the contributions levied by the management corporation on the subsidiary proprietors in accordance with this Act. (10) A management corporation must —(a) cause proper books of account to be kept in respect of moneys received or expended by the management corporation showing the items in respect of which the moneys were received or expended; and (b) cause to be prepared, from the books mentioned in paragraph (a), a proper statement of accounts of the management corporation in respect of each period starting on the date the management corporation was constituted or the date up to which the last previous such statement was prepared and ending on a date not earlier than 4 months before each annual general meeting.