I talked about a possible apartment boom in my previous post.
In this post, I’m going to share with you things you need to know about body corporates.
What is a body corporate?
A body corporate is made up of all the owners in the apartment building (a strata-titled property). So if you own an apartment, you are a member of the body corporate. And the important thing to know is you don’t have an option. You automatically become a member when you purchase a unit titled property.
And what’s more, you have to pay body corporate levies every year. So what’s this annual body corporate levies? Is it Council Rates?
Nope. Council Rates is on top of the body corporate levy. You see, especially in an apartment, there are various parts such as the lifts, stairways, ground entrance lobby, building security systems, fire evacuation and protection systems, electrical risers and telecommunications infrastructure which are shared by all the owners of the apartment. All the members of the body corporate collectively own these common areas but no-one has exclusive right to it. This is known as the common property. These areas need to be maintained on a yearly basis. So each apartment owner has to contribute levy to the body corporate which then pays to maintain these common property. Now, from my experience, body corporate levies generally costs a few thousand dollars each year. If you are lucky, your body corporate levy will cost around $2000 to $5000 each year but for older buildings, it will cost much more. This is because older buildings tend to require more repairs and money needs to be set aside to pay for upgrades to lifts and fire protection systems.
So who receives all these body corporate levies? By law, all levies are paid to a body corporate trust bank account and the owners of the building appoints a “Body Corporate Secretary” or “Body Corporate Manager” to keep track of the levies received and the payment paid to contractors. The Body Corporate Secretary is responsible for all the recordkeeping and budgeting and must report back to the owners at an annual general meeting.
If it’s well managed, you can live peacefully and get on with your day to day life. However, not everyone is satisfied by the way their body corporate is run. Just google “Apartment blues: Time to control the body corporate managers” and you can read about one man’s experience with body corporate managers.
Of course, assuming your body corporate secretary maintains good records and keeps the budget under control, you still need to know about Body Corporate Rules. And that’s the topic of my next post.