A body corporate is a legal entity created when land is subdivided to create common property and lots, and is registered to establish a community titles scheme. The scheme can be a duplex, a residential unit block, a high rise accommodation complex, a shopping complex, or a residential suburb, or a business park. Every owner of a lot in a community titles scheme is automatically a member of the body corporate.

A body corporate exists to manage the issues of necessary and mutual interest to all the owners. These matters are:

• Physical property issues
• Issues related to people living together

Physical property includes gardens, common building structures and shared assets such as recreation clubs and tennis courts.

When people live together issues may include behaviour, noise and parking. Anything where the actions of one particular resident may impact on another.

Legislatively, bodies corporate perform only a limited purpose. They must:

• Administer the common property and the body corporate assets for the benefit of the owners of lots included in the scheme
• Maintain common property to the extent it is in structurally sound condition
• Enforce the community management statement (including by-laws affecting the common property)
• Carry out other functions given to the body corporate under legislation, such as keeping records about its operations, meetings and owners.

The body corporate is not legally able to do anything other than fulfil these mandatory responsibilities. In performing these duties, the body corporate can enter into contracts, employ staff and generally deal with property. Unlike a commercial company, it cannot conduct businesses, such as a letting agency, tour operation or restaurant.

However, the body corporate may engage in any business activities necessary to properly carry out is functions (eg. investing funds).

Contributions (otherwise known as levies) are received from every lot owner of the body corporate and are pooled to maintain the community and common areas. The size and frequency of the contributions required to properly run the body corporate are decided by all owners at the annual general meeting.

There are two types of contributions set by the body corporate:

• The contributions to the administration fund.
• The contributions to the sinking fund.

Decisions are made by owners in two ways:

• At a meeting of all the owners (a general meeting)
• At a meeting of the committee for the body corporate

No individual acting in isolation can make a decision.

By being actively involved in the running of a body corporate, for instance joining the body corporate committee, lot owners can have a say in how a community allocates its funds and can assist in planning committee projects.