The strata corporation for Strata Plan VIS1234 in Victoria consists of 100 residential strata lots. It has an operating budget of $300,000 for the upcoming year. The current CRF balance is $75,000. Owners are proposing to pass a special resolution to reduce the CRF contribution to 5% of the annual operating expenses for the next year. What is the practical implication of such a resolution?

Question: The strata corporation for Strata Plan VIS1234 in Victoria consists of 100 residential strata lots. It has an operating budget of $300,000 for the upcoming year. The current CRF balance is $75,000. Owners are proposing to pass a special resolution to reduce the CRF contribution to 5% of the annual operating expenses for the next year. What is the practical implication of such a resolution?

Answer options: ✅ The resolution would be invalid as it contravenes the Strata Property Act's minimum contribution requirement.

• The resolution could be passed with a 3/4 vote, allowing the reduction.
• The resolution would require a unanimous vote.
• The resolution is only valid if a depreciation report supports the reduced contribution.

Correct answer: The resolution would be invalid as it contravenes the Strata Property Act's minimum contribution requirement.

Explanation: Section 93(1)(a) of the Strata Property Act specifies a mandatory minimum CRF contribution of 10% of the previous year's operating expenses. A resolution to reduce this below the statutory minimum would be unenforceable.