| A Guide to Body Corporate
In simple terms, a “Body Corporate” refers to the organization responsible for overseeing the operations of an apartment building, unit complex, or townhouse community. It handles various aspects such as maintenance of common areas, setting budgets, addressing issues, and establishing by-laws. Legally, it is formed when land is subdivided and registered.
When you purchase a lot (unit/apartment or certain townhouses) within a community titles scheme governed by a body corporate, you automatically become a member of that specific body corporate. This membership grants you the opportunity to voice your opinions on matters concerning the complex.
Determining Body Corporate Fees The amount of body corporate fees can vary significantly based on numerous factors. These fees are separate from your mortgage payments and are typically paid on a quarterly basis. To obtain information regarding previous year’s fees, you can request the complex’s “strata report.”
Several elements contribute to the calculation of body corporate fees. For instance, does the property consist of a basic low-set brick structure without additional amenities, or is it an exquisite high-rise with pools, recreational areas, underground parking, and elevators? The fees are directly linked to the costs associated with maintaining these features.
Each year, the total amount required to maintain the building is budgeted and divided equally among the owners. Consequently, the fees may fluctuate depending on the maintenance needs. These decisions are generally made through the collective agreement of the body corporate, often through voting. Therefore, it is crucial for you to actively participate in meetings and engage in the decision-making process.
The body corporate may choose to engage professional services, such as gardeners and pool cleaners, to carry out maintenance tasks. In some smaller schemes, body corporate members may volunteer their services. However, professional services do incur certain costs. These financial matters, along with others, are discussed and considered during the annual general meeting of the body corporate.
Aside from maintenance, insurance, and budgeting, the body corporate also establishes and enforces its own set of rules known as “by-laws.” These rules must be adhered to by all owners within the complex.
Election of body corporate committees is a mandatory requirement. Whether or not you serve on the committee, as an owner of a unit within the complex, you have the right to express your opinions on complex management and expenditure.
It is important to carefully review the balance of both the sinking fund and administrative funds, as well as the ongoing contributions you will be required to make. Occasionally, a “Special Levy” may be imposed if there are unforeseen urgent repairs or expenses that were not anticipated in the Administrative Fund or Sinking Fund.
Conducting Research on the Body Corporate To gain insights into the body corporate’s efficiency in managing the complex, you can obtain a strata report through purchase or request it from the vendor. A reliable body corporate will exhibit signs of effective management, such as:
- Comprehensive building insurance coverage
- Well-maintained and sustainable sinking fund
- Minimal unresolved building defects
- Detailed minutes of meetings addressing complaints and their resolutions
- Up-to-date and meticulous financial accounts
Performing thorough research on the body corporate is an essential part of your due diligence when considering the purchase of a unit or apartment.
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This is not meant to be financial or professional advice and is only of general nature. You must seek professional advice before taking any actions. The above information comes with no warranties whatsoever. We take no responsibility for any actions you may or may not take. All content is of general nature only and is NOT to be taken as advice whatsoever