In it's simplest form:
|
When land is subdivided, built on, and registered under the Community Title Act a body corporate is established, and every owner of a lot is automatically a member of the body corporate. Owners have no choice in this matter, it is compulsory.
Units, townhouses, duplexes, etc sharing common property require a body corporate to govern the spending and overseeing of maintenance, and to provide a legal frame work to handle issues with respect to the property. The body corporate must comply with the Body Corporate and Community Management Act 1997 and its regulations.
The council of the Body Corporate is elected by the members (unit holders) at the Annual General Meeting. It meets regularly to discuss matters relating to the administration of the building, such matters include:
- Maintenance and management of common property, (common property includes such things as lifts, pools, driveways, paths, passageways, entry foyers, stairs, common grounds and gardens and any other facilities set up for the members or their Tenants).
- All compulsory insurances.
- Establishing and enforcing bylaws relating to the management and control of lots and common property.
- Determining and setting fees which owners must pay to fund its operation.
- Maintain records of all meetings and financial transactions.
Body Corporate Levies (Annual Fees):
As with any property a 10 year budget plan must be made in order to derive how much money to invest towards the maintenance of the asset. Failure to attend to maintenance will result in the value of the property being reduced.
(In housing we have issues like garden maintenance, painting, roofing and guttering, fencing, pest control, rubbish removal etc. On top of these we also have building insurance and rates.)
Body Corporate legislation states that the Body Corporate must prepare a budget forecast on such maintenance and legal issues (like Public liability and Building Insurance, lifts, pools, pump rooms and any other common asset that requires a statutory maintenance schedule). Once these forecast figures have been obtained, Levies are then set for each owner.
How are the Levies set?
The Annual fees for a Body Corporate are generally paid quarterly and are comprised of three amounts.
- Administration fee. This amount is for paying all bills that are likely to occur during the annual running of the Body Corporate. E.g. Management fees, cleaning fees, garden maintenance, and day to day maintenance.
- The Insurance fee. This fee comprises all types of Insurance deemed to be required by the Body Corporate. E.g. Building Insurance, Public Liability, Loss of rent, Common area contents and Fidelity Guarantee.
- Sinking Fund fee. The Sinking Fund Budget is the preparation of a 10 year forecast of spending of a capital nature or major repairs and maintenance such as painting, roof repairs, lift overhauls, fencing the replacement of carpets. The fund must allow for the raising of necessary funds in order to maintain the asset.
- NB: Failure to pay your fees by the issued due date could result in interest penalties.
Duties and obligations:
As the Owner – you are responsible for maintaining the unit in good condition; you may be responsible for maintenance of an area of common property over which you have exclusive usage rights; and you must obey all bylaws that apply to the scheme.
As an Occupier – you must obey the bylaws; keep the unit clean and tidy; not cause a nuisance or hazard; not interfere unreasonably with the use or enjoyment of another lot, or with common property.
