If you own a property that has a body corporate, you are part of the body corporate. This is different from the body corporate committee. As a member of the body corporate, you have a responsibility to know and understand the following information.
Body corporate rules are essential to ensure the smooth running and management of the body corporate. It is important that owners, and their tenants, as well as prospective buyers are aware of what is set out in these rules. Not all bodies corporate have body corporate rules. If a property does not have body corporate rules, the rules in the Unit Titles Regulations 2011 apply:
The purpose of body corporate rules is to uphold a good standard of living for all owners and a good body corporate will implement these rules fairly. While some body corporate rules may appear trivial, they set out standards for:
The rules also cover the management and governance of the body corporate including:
Typically, an owner's obligations will be to:
Under the new Unit Titles Act all bodies corporate must have a (LTMP) in place. 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 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.
The Unit Titles Act 2010 introduced the new role of Body Corporate Chairperson, who must be elected by the body corporate at every Annual General Meeting. It is a requirement of the Act that the Chairperson must be an owner. The role of Chairperson has clearly defined duties in accordance with the Unit Title Regulations:
The body corporate can choose to delegate some or all of these tasks either to the body corporate committee or to a body corporate manager under a contractual arrangement. If employing a body corporate manager it is important to set out clearly within the contract exactly what the manager is expected to do.
For the sake of efficiency there seems little point in the Body Corporate Chairperson not being part of the body corporate committee. In many cases the Body Corporate Chairperson will also chair the committee and the meetings.
If the sitting Body Corporate Chairperson sells their unit, they must give notice of their intention to resign from their post. The Body Corporate Chairperson can resign at any time giving notice in writing to the Body Corporate. As the role of Body Corporate Chairperson is a requirement of the Act, following resignation or removal, the position must be filled as soon as possible.
Any owner, including directors of company owned units and trustees of trust owned units, within the body corporate are eligible to be elected to the role of Body Corporate Chairperson as long as they are nominated by another unit owner and agree to be nominated.
We provide independent information and support on all matters related to homes and housing. If you are experiencing a challenge — whether with a defective building, trouble with a contractor/service provider, or issues within your body corporate, our team can help you.