Buying in a body corporate

• Does this complex have a committee?
  Under the Unit Titles Act 2010, all multi - unit complexes with more than 10 units are required to have a body corporate committee unless a resolution of the body corporate to not have a committee is passed. Complexes with nine or fewer units may form a body corporate committee. If it does, how active is it?
• What are the body corporate annual fees?
  Fees vary; make sure you are aware of the annual cost to live in the body corporate you are interested in.
• Is there a long term maintenance plan (LTMP) in place?
  Under the new Unit Titles Act all bodies corporate must have a LTMP in place and this became mandatory as of the 1st October 2012. The LTMP must be for a minimum of 10 years and reviewed every two years. You should be very wary of maintenance plans that are prepared for the minimum of 10 years as there may be some very significant maintenance that falls just outside of the 10 year period that has been assessed. We say that a prudent body corporate ought to have a 30 year maintenance plan and build adequate maintenance reserves in their long term maintenance fund to fully fund the LTMP over the years. You must apply extreme caution when analysing the financial records and the LTMP to ensure that not only is the LTMP adequate, but that the body corporate has built up adequate reserves otherwise you risk assuming a significant contingent liability if you buy the unit.
• Is the apartment in a good state of repair?
  Make sure you look beyond the unit you are buying and take a critical look at the entire complex.
• Has maintenance been carried out recently?
  If so, what, why and when and by whom.
• Is any maintenance planned?
  If so, is it routine maintenance or for another reason?
• Are car parks or storage units allocated to the property you are viewing? If so, how many?
  These are noted on the title as Accessory Units.
• Is there any security, security gates, CCTV, etc.? Is it in good condition?
• Is there an on-site building manager?
• Was the property owner-occupied or tenanted? 
  It is generally accepted that owner-occupiers take more care of property than tenants.
• Are pets allowed?
• How easy will it be to get your furniture in and out of the building?

Determine the date of the next Annual General Meeting (AGM) or if there is an Extraordinary General Meeting (EGM) pending.

This is important because we have seen a lot of units go on the market prior to a general meeting being called because an owner has become aware of matters that will be raised at the next meeting that will result in a significant increase in the annual levy or will negatively impact the value of the complex.

If a general meeting is pending you must ensure that you put the question in writing to the agent asking whether the seller is aware of any matters that will be raised at the next general meeting that will either significantly increase the annual levy or have a material impact on the value of the complex - you should insist that the answer is provided to you in writing.
Ask for a copy of the:

Body Corporate Operational Rules

• Minutes for all general meetings (AGMs and EGMs) and committee meetings for the last three years
• Financial statements for the last three years including audit reports
• Current interim financial statements and approved budget for the current year
• Long Term Maintenance Plan
• Title including the unit plan and supplementary record sheet
• Current insurance certificate for the unit and copies of the insurance policy documents
• Insurance claims history
• A copy of the current building warrant of fitness if applicable

A body corporate, often referred to as a strata title or unit title development, is a unique feature of the unit title scheme and consists of all the owners of the units acting as a group. If you own a property that is in a body corporate, you are part of that group.

A body corporate has two main duties:

• To organise and maintain all buildings and other improvements; and
• To keep the common property in a good state of repair.

A body corporate has rules, which govern the unit owners' relationships with each other and with third parties. The body corporate also has duties that apply under its rules. Rules are based on the Unit Titles Act 2010 but can vary with each body corporate.

In large complexes a body corporate manager or management committee may be employed to carry out the body corporate's duties. 

Within a body corporate, members own their dwelling (which is called a principal unit) and may own accessory units (car parks, storage lockers and courtyards). Areas such as grounds, gardens, internal halls and stairs in blocks are common property and are owned by all the owners collectively. The exterior of all buildings, including the roof, may be within the unit or part of the common property.

What is a Unit Title?

A unit title is a type of subdivision of a unit plan used to allow individual ownership of parts of a single building or separate buildings within a complex. It is similar to other property in that it can be bought and sold, or leased or mortgaged, but unlike other forms of title, a unit title is made up of three parts:

1. Ownership in the particular unit and accessory units
2. An undivided share in the ownership of the common property
3. An undivided share in the ownership of the units if the unit plan is cancelled

Resources

•  Guide to Bodies Corporate (PDF 1.2 MB)
•  Citizens Advice Bureau - Body Corporate