I recently received the papers for the AGM for a rental property I own in Queensland. I uploaded them to my favourite AI tool and asked this question:
"You own a unit in this complex and want a commentary and interpretation of these accounts and reports to monitor the performance of the body corporate and the body corporate manager".
The following is the report AI provided.
1. Financial Position and Performance
Balance Sheet Overview (as at 31 March 2025):
- Total Assets: $80,959.11 (up from $20,241.60 in 2024)
- Total Liabilities: $16,228.07 (up from $3,138.85)
- Net Assets (Equity): $64,731.04 (significantly up from $17,102.75)
- Administrative Fund: $17,662.58 (was a deficit of $922.34)
- Sinking Fund: $47,068.46 (up from $18,025.09)
Interpretation:
The body corporate has improved its financial position substantially over the year, with a strong increase in both the administrative and sinking funds. The jump in cash reserves and net assets suggests effective levy collection and prudent expenditure management. The elimination of levy arrears (down from $2,202.76 to $0) is a positive signal for cash flow and financial discipline.
2. Income and Expenditure Analysis
Administrative Fund (2024–25):
- Income: $40,512.65 (budgeted $39,200; prior year $16,380.61)
- Expenditure: $21,927.73 (budgeted $28,535; prior year $21,570.71)
- Surplus: $18,584.92 (budgeted $10,665; prior year deficit $5,190.10)
Key Points:
- Actual income exceeded both budget and prior year, largely due to higher levy collections.
- Expenditure was well below budget, with significant savings in areas like garden/lawn maintenance, caretaker services, and utilities.
- The surplus is healthy and provides a buffer for future unexpected costs.
Sinking Fund (2024–25):
- Income: $32,833.37 (budgeted $32,000; prior year $359,314.66, which included a special levy)
- Expenditure: $3,790.00 (budgeted $17,200; prior year $369,356.74)
- Surplus: $29,043.37 (budgeted $14,800; prior year deficit $10,042.08)
- Closing Balance: $47,068.46
Key Points:
- The sinking fund is being rebuilt after a major works period in the prior year (reflected in the large prior year expenditure and special levy).
- Actual expenditure was much lower than budgeted, contributing to a strong surplus.
- The fund is now well placed for future capital works, but next year’s budget anticipates higher expenditure, notably for exterior finishes and garage doors.
3. Budgeting and Levy Setting (2025–26)
- Administrative Fund Budget: $24,500 (down from $49,000 in previous year, reflecting reduced anticipated expenditure)
- Sinking Fund Budget: $30,000 (down from $40,000)
- Per Lot Entitlement: $2,722.22 (admin) + $3,333.33 (sinking) = $6,055.55 per lot per year
Interpretation:
The proposed budgets reflect the completion of major works and a return to routine maintenance. The reduced levies will be a relief for owners, but care should be taken to ensure that the sinking fund remains adequate for future capital needs1.
4. Insurance
- Total Premium: $11,420 (for $4,028,721 building cover and other risks)
- Coverage: Comprehensive, including flood, public liability ($20 million), fidelity guarantee, voluntary workers, and more.
Interpretation:
The insurance arrangements are robust and in line with legislative requirements. Owners should ensure any lot-specific improvements are disclosed to avoid under insurance.
5. Debt Management
- Policy: Prompt reminder and recovery action for arrears over $500, with external debt collectors engaged after 54 days
- Status: No levy arrears at year end.
Interpretation:
The body corporate’s approach to debt management is proactive and effective, as evidenced by the elimination of arrears. This is critical for maintaining cashflow and fairness among owners.
6. Body Corporate Manager Performance
- Administration: Reports are timely and comprehensive, with clear notes and explanations.
- Financial Management: Levy collection and expenditure control have been effective.
- Transparency: All major motions, including audit options and contractor engagement, are put to the vote with explanatory notes.
- Compliance: Meeting procedures, voting rights, and proxy rules are clearly communicated.
Interpretation:
The manager appears to be fulfilling statutory and contractual duties. The documentation is clear, and financial management is sound. The committee and manager have also established clear processes for contractor engagement and utility agreements.
7. Committee and Governance
- Committee Nominations: None received in advance; nominations to be called at the AGM.
- Governance: All statutory motions are included, with explanatory notes for owner understanding.
Interpretation:
Active owner participation is encouraged. The absence of advance nominations for the committee highlights the need for greater engagement, but the process allows for nominations at the meeting to ensure governance continuity.
8. Risks and Recommendations
- Audit: The accounts are not currently audited; owners may wish to consider an audit for additional assurance.
- Sinking Fund Forecast: While the fund is currently healthy, next year’s planned expenditure is high; ongoing review is recommended.
- Owner Engagement: Owners should attend the AGM, review motions, and participate in voting to ensure the body corporate continues to be managed in their best interests.

Conclusion
The body corporate is in a strong financial position, with healthy reserves, effective debt management, and prudent budgeting. The body corporate manager is performing well, and governance processes are clear and transparent. Owners should remain engaged, particularly regarding committee nominations and the decision on auditing, to ensure continued good management and financial health.
My conclusion? AI has done a great job of selling our body corporate manager, in a way managers usually don’t.