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What is a Body Corporate (Owners Corporation) and what does it do?

By Addy Whitburn

Chances are, if you’ve just bought a unit, townhouse or apartment, you will have heard about something called a owners corporation or body corporate.

Despite sounding like something straight out of 1984, these entities are nothing to worry about. In fact, they’re crucial to the proper functioning of any communal building.

Which is why you should learn a few things about them.

Here’s what you need to know.

What is an Owners Corporation?

An owners corporation is the legal entity comprising all the individuals that own the various lots in a strata scheme. Also known as a body corporate, it represents the collective interests of these owners, and is automatically created when a plan of subdivision contains common property.

Its main function is to manage and look after a building’s communal areas, which include stairwells, common walls, gardens, pools, driveways, laundries, lobbies, and a building’s exterior. Just like a business, an owners corporation has the freedom to set its own rules regarding the use of this common property, so long as these rules don’t violate the law.

What’s important to remember is an owners corporation is only as efficient and effective as the lot owners allow it to be, as these owners are the owners corporation’s only members.

So, if you want your apartment building to stay in good nick, you should speak up at meetings, engage with your neighbours, and be prepared to roll up your sleeves in times of need. ADVERTISEMENT ––

What are your responsibilities as a member?

As a member of the owners corporation, you’ll be required to attend a yearly meeting known as the Annual General Meeting (AGM). This is your chance to:

  • vote on any decisions or resolutions regarding the property
  • raise any concerns about the property’s condition and maintenance
  • learn about any new purchases and sales in your building
  • discuss any fees that need to be raised for construction costs
  • raise any ad hoc requests, such as asking tenants to keep noise to a minimum after 11pm, or checking who’s responsible for taking out the bins each week.

If you can’t attend the AGM, you can appoint another person to attend on your behalf. This person is known as a proxy.

Often referred to as ‘levies’, these are the most common fees of an owners corporation:

  1. Annual or administration fund levies

These cover the day-to-day running of the owners corporation and usually include things like minor or ongoing maintenance, cleaning, gardening and insurance.

  1. Sinking fund levies

Sinking fund levies cover the costs of longer-term maintenance, such as major plumbing or building works, general repairs and emergency costs – issues that you can bring up at your AGM.

  1. Special levies

The owners corporation might ask for special levies when there are insufficient funds in the administration or sinking funds to cover unexpected expenditures such as roof repairs, new windows, termite damage or asbestos removal.

If you don’t pay your fees, you might not be allowed to vote on important decisions that affect your building, and you might also be charged expensive penalty rates.

Make sure that you’re aware of any extra charges, and that you read the Owners Corporation certificate attached to the vendor’s statement.

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