| A Guide to Body Corporate

Simply put – “Body Corporate” is the organisation that is in charge of running an apartment/unit building or townhouse complex,  and handling all of the common area maintenance issues.  It also sets budgets, manages issues and sets by-laws.  It technically is a legal entity that is created when land is subdivided and registered.

When you buy a lot (unit/apartment & some townhouses) in a community titles scheme (run by a body corporate) you are automatically a member of the body corporate for that complex. You do not have an option.  This means you can have your say for issues that arise pertaining to that complex.

What Determines the Body Corporate Fees?
Body corporate fees can vary wildly depending on a myriad of factors.  You will need to factor in body corporate fees on top of your mortgage payments. They are normally paid quarterly.  You will be able to find out how much the fees for the previous year by asking for the complex’s ‘strata report’.

There are many factors that contribute to how much your body corporate fees.  Is it a basic low-set brick with no added amenities or is it a beautiful highrise with pools, recreation areas, undercover parking and lifts?  Your body corporate fees are directly related to the cost of upkeep.

The total amount required to maintain the building for each year is budgeted and divided equally among the owners. Meaning depending on the maintenance required, the fees will vary from year to year.  These decisions are made by the body corporate as a whole (often by voting).  So it is important that you attend meetings and are involved.

The body corporate can engage the services of professionals such as gardeners and pool cleaners to carry out maintenance. In some smaller schemes, body corporate members volunteer their own services. These professional services will involve a certain degree of costs.  These and other financial matters must be considered by the body corporate at the annual general meeting.

Although maintenance, insurance and budgeting are some of the most important functions, the body corporate also creates and enforces its own rules, called ‘by-laws’.  These are the common rules that all owners of the complex must abide by.

Body corporate committees are required to be elected.  Whether or not you are on the committee, if you are an owner of a unit in the complex, you have the right to have your say about what happens in the complex and how the money is spent.  

Make sure you review the balance of both the sinking and administrative funds and what ongoing contributions you will be required to make.  There may also be a “Special Levy” from time to time, if an urgent repair or expense arises that was not anticipated in the Administrative Fund or the Sinking Fund.

Research the Body Corporate
You can purchase a strata report or ask the vendor for one.  A good body corporate will be on top of the running of the complex.  For example:

• A fully insured building
• A well maintained and viable sinking fund
• Very few unaddressed building defects
• Detailed minutes along with complaints and how they have been addressed
• Detailed and up to date set of accounts

It is important that you do your research into the body corporate as part of your due diligence on the unit or apartment you are planning to purchase.