Did you Know?
Some useful facts and information to help increase understanding of Body Corporates and what they do.
What is a Body Corporate?
A Body Corporate (Strata Entity in Western Australia) is a legal entity which arranges and conducts the affairs of a unit or town house complex using Body Corporate fees paid by individual landlords. The solicitor for the builder/developer submits documents to the Department of Natural Resources for registration of the Body Corporate, which is how it is initially formed.
Body Corporates were developed to manage the costs associated with operating a large complex of units, which were associated with the whole block rather than an individual tenancy. The costs are borne by the landlord of which there are many in a large complex. To this end, they were developed to manage the sharing of these costs and oversee the overall management of the complex, with legislation governing their conduct and operation.
What is the committee?
The owners within the Body Corporate for a complex appoint a Committee from amongst themselves to make decisions on behalf of all owners. The Committee is made up of your fellow Lot owners in the scheme who have volunteered to be more involved in the how the Scheme is managed. Anyone who owns a Lot can nominate to be a member of the Committee; they can also be someone who lives at the Scheme or an investors owner who lives in another state. Their votes do not count anymore than any other owner but they are able to make decisions that affect the Scheme that don’t have to be voted on by all owners. They are usually more knowledgeable about the state of the building and any works that are required. For an investor/absentee owner being on the committee is a great tool for protecting their investment and ensuring that the value in the Scheme is maintained to its full potential.
The Committee is appointed at the Annual General Meeting for the following year. The Body Corporate Committee carries out decisions made at the AGM and deals with other issues as they come up.
They are supported by the Body Corporate Manager who:
- Pays all accounts when they fall due
- Arranges for all maintenance of the common areas
- Compiles the annual budgets
- Arranges General Meetings of the Body Corporate
- Sends levy notices to owners
- Collects and banks levy payments
- Implements all requests of the Body Corporate
What does the Body Corporate Manager do?
The Body Corporate can vote to employ a Body Corporate Manager to do a lot of the day to day tasks that all the Committee is responsible for such as calculating and collecting levy payments, sending out meeting paperwork including motions, minutes, voting papers, arranging quotes and ensuring that the Scheme is insured effectively.
Club Body Corporate and the Body Corporate Manager are members of the Community Titles industry of Queensland (CTIQ). Our Body Corporate Manager attends many educational seminars and expos to keep abreast of the most current information pertaining to all areas of Body Corporate.
The Body Corporate Manager charges fees to the Body Corporate to cover their costs, and to give them an income. These fees can range from $100 to $200 per unit per year. The Body Corporate Manager also charges for incidentals such as postage, phone calls, and photocopying.
What is a Sinking Fund?
The Body Corporate Committee, usually comprising the Chairman, Secretary, and Treasurer, who must approve special items that might arise that are not covered by the operational budget that the Body Corporate Manager utilises. This is referred to as the Administration Fund Budget.
In addition, an amount must be set for the Sinking Fund. This fund must be kept separate from the Administration Fund, and is to accumulate over several years so that funds are available when the builder's guarantee expires, and structural repairs or repairs to the common area such as railings, roofs, gutters, fences and so on are required. Each owner should be paying a minimum annual amount into the sinking fund, which can vary depending on the property and governing state legislation.
QLD Model to be used in Dubai!
Queensland is the most regulated state for Body Corporate Management. This does make it difficult for out of state investors to sometimes navigate the challenges of the difference in legislation, which is an area Club Body Corporate pride themselves on.
Did you know that the Queensland model of Body Corporate Management is so highly regarded it is being adopted to manage the world class mixed use developments in Dubai and the UAE? Because Club Body Corporate meets this high standard we emulate this in all states and through our investor educational series, not just in Queensland.
Did you know that over 85% of all the stock sold through The Investors Club in the last 12 months were strata titled?
The predicted population of South East Queensland (SEQ) by 2031 is over 4 million. Around 735,000 additional dwellings will be required to accommodate for this growth. This, combined with a land shortage, will mean that developers and builders will need to look at medium to high density living.
As the population increases and property prices rise, combined with people wanting to be closer to the cities, our living spaces are becoming smaller and smaller, however the downside is many people are not used to living in a Strata Titled complex and having neighbours not only on each side but also upstairs, downstairs and in some cases directly behind them. Others are used to being able to do what they like when they like. And others thought that having federal law and council laws was bad enough - and now they have By Laws that they have to adhere to?! And let’s not get started with telling them that their pet pussy or puppy can’t move in too!
In most cases the 3 to 7 Committee members are the ones who end up making most of the decisions for the Body Corporate, but these are just volunteers who own lots in the Scheme and many work full-time. They are not Body Corporate experts, nor have the time or desire to read the appropriate Acts, Regulations and Modules but yet it is them who have the responsibility of ensuring that their Scheme complies, so a Body Corporate Manager is appointed.
Club Body Corporate assists The Investor Club members and developers with the complexities of Bodies Corporate. Being very aware of the current and future trend for townhouses and units we are able to tailor the management of the Scheme to absentee owners and interstate investors so that they still know what is going on with their investment. The overall appearance of a complex and also the internal politics can have a huge impact on a tenant’s decision to stay or go come lease renewal time.
If you are interested in transferring your Scheme’s management to Club Body Corporate or registering to join our e-info list to receive periodic updates (link through to registration page) such as levies, budgets, arrears, new Fire Legislation and so on.