When first purchasing in a Body Corporate, many questions arise. Who is the Body Corporate, what is the purpose of the Body Corporate, how is the Body Corporate financed, how does the Body Corporate make decisions and more!
SSKB Community Manager and Team Leader stated, “For any new owner, I would stress the importance of reading your Body Corporate by-laws, introduce yourself to the Committee and other Lot Owners and attend the Annual General Meetings to ensure you remain up to date with important decisions being made in your Body Corporate.”
The Body Corporate
The 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. Every Owner of a lot in a community titles scheme is automatically a member of the Body Corporate.
What is the purpose of a Body Corporate?
A Body Corporate exists to manage the issues of necessary and mutual interest to all the Owners. These matters are:
- Physical property
- People living together
Physical property includes gardens, common building structures, and shared assets such as pools, gyms, and tennis courts.
When people live together issues can often arise including behaviour, noise, and parking. Anything where the actions of one particular resident may impact on another.
Legislatively, Bodies Corporate performs 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 business, such as a letting agency, tour operation or restaurant.
How is a Body Corporate financed?
Contributions (otherwise known as levies) are received from every Lot Owner of the Body Corporate to maintain the community and common areas. The size and frequency of the contributions required to properly run the Body Corporate are decided by 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.
How does the Body Corporate make decisions?
Decisions are made by Owners in two ways:
- At a meeting of Owners (a general meeting)
- At a meeting of the Committee for the Body Corporate
Have your say!
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.
The Committee is the executive arm of the Body Corporate and has the duty of putting into effect the lawful decisions of the Body Corporate. Every Body Corporate must have a Committee, unless a Body Corporate Manager is engaged in a place of the Committee to carry out the executive functions (referred to as a Part 5 arrangement).
The Committee is elected each year at the annual general meeting. Committee Members are representatives of all Owners, not just themselves. For this reason, they must disqualify themselves from voting on any issue where they have a direct pecuniary financial interest, though the Committee Members may not be excluded from the meeting. Where a possible conflict concerns a non-voting Committee Member (such as a Body Corporate Manager or Building Manager), voting members have the right to exclude the non-voting member of the Committee from the meeting.
Committee Members are volunteers and are generally not entitled to payments for their services unless such a payment is approved by ordinary resolution at a general meeting. This resolution is subject to strict requirements.
The duties of the Committee members include-
- Attending all the Committee meetings each year. These meetings are called as required and are usually quarterly.
- Reading the meeting notices prior to attending the meeting.
- Attending to various jobs (e.g. obtaining quotes for painting or gardening).
The Body Corporate Manager
The Body Corporate Manager should not be confused with the Building Manager. The Building Manager is there to ensure the building is repaired and maintained in accordance with the terms and conditions of the caretaking agreement.
A Body Corporate Manager is responsible for:
- Assisting in the preparation of budgets
- Implementing maintenance strategies in accordance with set budgets
- Management of relationships with contractors and stakeholders in the scheme
- Issuing collection of levies
- Calling and minuting meetings on behalf of the Secretary
- Implementing motions and Committee directives.
Day to day roles a Body Corporate Manager is responsible for:
- Overseeing/Managing residential and commercial properties
- Proving guidance on relevant legislative matters
- Actioning the directions of the Committee while proving continuity of management process and recordkeeping.
So, are there things a Body Corporate Manager does not do?
- A Community Manager is not the real estate, property manager or letting agent.
- A Community Manager does not set levies or makes decisions on running of a Body Corporate – that is the obligation of the Lot Owners, governed by the Committee.
- They cannot give legal advice, but they can point to relevant clauses in state legislation that may assist Committees to make a decision.
Building Manager’s Role
The caretaking services provided by the Building Manager are specified in the caretaking agreement between the Manager and the Body Corporate. Usually, the Building Manager will be responsible for duties such as maintaining the garden, mowing lawns, cleaning, lifts, lobbies, changing light bulbs, and overseeing refuse collection.
A Body Corporate Manager is not the same as a Building Manager whose duties may include the maintenance of common property, however a Committee may ask a Body Corporate Manager to arrange for those services to be performed.
If you are new to your Body Corporate and would like more information about the purpose of the Body Corporate, please don’t hesitate to reach out to SSKB with any questions you may have. SSKB will also provide you with a welcome pack to ensure you know who to contact, our role, and other information about living in a Bodies Corporate. Click here to contact the SSKB team today.