The money stays the owners corporation's money throughout the changeover. The outgoing manager reconciles the scheme's balances, transfers cleared funds through an authorised trust or banking arrangement, and hands over the financial records so the incoming manager can verify the opening position.
The money remains the owners corporation's money throughout the changeover. It is not paid to the new strata manager as their own money.
In NSW, client funds handled by a licensed agent must be held under trust-account rules and can only be used for that client and disbursed as the client directs. When a scheme changes managers, the outgoing manager should reconcile the scheme's balances and transfer the money through the authorised banking or trust arrangement for the incoming manager or owners corporation.
The practical handover normally includes a final reconciliation, the transfer of cleared funds, a remittance or transfer confirmation, financial ledgers and bank records, and an opening-balance check by the new manager.
A strata manager may be authorised to receive, bank, account for and pay money on behalf of the owners corporation, but the scheme's levies and reserves do not become the manager's business money.
NSW Fair Trading's current trust-account guidance says licensed agents must hold clients' funds in a trust account, cannot use those funds for another purpose, and must disburse them as the client directs.
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Not necessarily a brand-new bank account for every scheme. A licensed NSW agency can hold client funds under a compliant trust-account structure while maintaining separate accounting records for each client. What matters is that the incoming arrangement complies with trust-account rules, clearly identifies the scheme's money in the accounting records and follows the owners corporation's approved authority.
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The transfer should follow the authority contained in the owners corporation's resolution, management agreement and existing banking or trust-account mandate.
For NSW agent trust accounts, Fair Trading states that only the licensee in charge can authorise withdrawals from the agency trust account. That responsibility includes electronic fund transfers. The committee should provide clear written instructions about the intended destination and should independently verify bank details before a large transfer is made.
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Often that is the most efficient arrangement, but it is not the only lawful structure. If the new manager has been validly appointed and the owners corporation has authorised the transfer, the outgoing manager can commonly transfer the reconciled money to the incoming manager's compliant client-funds arrangement.
If no replacement is ready, NSW Government guidance says the handover goes to the strata committee. In that case, the owners corporation may need an interim banking arrangement rather than sending money to a manager who has not yet been appointed.
NSW Government guidance does not state one universal number of days for every financial transfer between outgoing and incoming strata managers. The timetable should therefore be set in the termination notice, management agreement and handover plan, with enough detail to avoid a period where the scheme cannot pay bills or deal with emergencies.
Victoria provides a useful statutory comparison: after an owners corporation manager's appointment is terminated, the manager has 28 days to return all funds and records to the owners corporation.
Specify a last receipt time, last payment run, final bank-reconciliation date, transfer date and first incoming-manager payment date. A shared cut-off reduces duplicate or missing transactions.
Owners should be told clearly if payment details change. A transition notice should identify the effective date for new payment details, what to do with scheduled BPAY or direct-debit arrangements, and who to contact if an owner pays the old details by mistake.
Unpaid invoices should be listed and assigned to one side of the cut-off. The incoming manager should not pay an invoice a second time simply because it appears unpaid in the document pack. Do not automatically liquidate term deposits or investments simply because the manager is changing — first confirm who legally holds the account, the maturity date, interest implications, withdrawal penalties and the incoming manager's authority.
Treat any mismatch as an immediate reconciliation issue. Common reasons include late levy receipts, unpresented payments, bank interest, merchant settlements, dishonoured receipts, management fees posted at the cut-off, or transactions processed after the final report was generated.
The incoming manager should prepare an exception list and ask the outgoing manager to explain each difference with supporting bank or ledger evidence.
Start with a formal written request identifying the amount, records and handover deadline required. If the delay threatens insurance, essential services or other obligations, the committee should obtain urgent advice and consider regulator, Tribunal or legal remedies appropriate to the jurisdiction.
If the owners corporation's money stays in the same bank account, there may be no large balance transfer at all. Instead, the handover may focus on changing signatories, online banking users, payment approvals, correspondence addresses, software integrations and the manager's authority. The committee should verify that the old manager's access is removed at the appropriate time and that the new manager has only the authority approved by the owners corporation.
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