What is a body corporate and what do they do?
They say too many cooks can ruin the broth, but when you own an apartment, townhouse or unit in a block, multiple opinions are part of the deal. That’s why body corporates exist.
A body corporate – or owners’ corporation, as it’s more commonly known – brings together all the individual owners within a single strata titled property, like a block of flats. Strata is a way of handling legal ownership of part of a building.
The owners’ corporation manages shared expenses, decides how common areas, like gardens and lobbies, are maintained and deals with issues between owners, like noise and parking.
What does a body corporate do?
A body corporate makes the decisions for how they want the common grounds of the property to be maintained.
They also manage all the outgoing expenses for the maintenance of the building.
It’s responsible for things like car parks, driveways, entrances, lifts and lobbies, pools, shared courtyards and gardens.
Do owners have to be part of it?
Across Australia, owners are legally required to be part of the owners’ corporation if their property is subject to a strata title, and must pay for things like insurance.
Owners will often pay an external strata company to do the job for them.
An extraordinary annual general meeting can be called to deal with “unforeseen issues.”
How much does it cost?
Owners pay funds into the body corporate each quarter or year.
In most cases the more square metres of the complex you own, according to your property title, the more in contributions you will pay.
A good example is a property which has a car park and storage cage. This property owner’s financial contributions would be higher than a property owner with a one-bedroom flat in the same building.
Most owners’ corporations also maintain “sinking funds”; a small back-up pool of money to cover unforeseen costs.
What is a “special levy”?
A special levy can be charged if there is a cost for the running or maintenance of the building that is in excess of the standard levies.
For example, it could be to pay for a new roof or to repair termite damage.
It is always voted on in an AGM or extraordinary AGM, but if the work needs doing, it generally gets voted in.
Should owners be involved?
Every property owner should have an active interest in how their property is managed.
With the owners’ corporation in charge of how the property appears, as well as maintenance, there is an obvious link with how much an apartment, townhouse or unit within it is worth.
Minutes from the AGM and history of the strata management can hamper a sale price and, in some cases, create so much fear that prospective buyers lose interest in the property; this ultimately will affect a sale price too.
Source: www.realestate.com.au
