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The Basics of Buying Into a Body Corporate (Residential)

Body Corporate - A block of apartments.

When you purchase a unit or apartment, you are usually purchasing a lot on a property that is managed by a body corporate.


These properties encompass various types of dwellings: duplexes, residential unit blocks, high-rise accommodation complexes, and shopping complexes or business parks (commercial lots). They can also include larger town plans comprising townhouses and freestanding houses in an estate.


The term body corporate refers to the legal entity which is created when land is subdivided and registered under the relevant legislation to establish a Community Titles Scheme (CTS).


Owners are automatically members of the body corporate when they purchase their lot. You cannot leave the body corporate, and must follow any body corporate by-laws and pay your body corporate levies.


The most important things when purchasing a lot that is part of a Community Titles Scheme is:

  • Who the body corporate is

  • The Community Management Statement (CMS)

  • What services and disputes the body corporate undertake

  • What fees or levies you will have to pay

  • What your obligations and responsibilities are as a member


What is a Community Title Scheme


The Queensland Government defines a Community Title Scheme (CTS) as:

“A community titles scheme is scheme land and the single community management statement identified with the Registrar of Titles identifying that scheme land. A community titles scheme must comprise of: - at least 2 lots - a common property - a single body corporate - a single community management statement

Owning a lot in a body corporate is different to owning land or a standard dwelling. Community Titles Schemes allow you to privately own a lot (an area of land) or part of a building, as well as share common property and shared facilities with other owners.


Whilst unique body corporates are not regulated by standard legislation, most residential Community Titles Schemes are regulated by the Body Corporate and Community Management Act 1997, and must have a Community Management Statement (CMS).


A CMS is a document that establishes a body corporate once it has been registered, and includes all the essential information for the body corporate.  It is unique for each Community Titles Scheme, and defines relevant by-laws, lot entitlements, proposed developments, and which regulation module applies.


These components can be complex to discuss at length, and will vary greatly on each Community Titles Scheme.


What Does The Body Corporate Do


A body corporate is given certain powers under relevant legislation to carry out its duties.


These may include:

  • Maintaining, managing and controlling common property

  • Deciding the levy amounts to ensure there are sufficient funds

  • Making and enforcing body corporate by-laws

  • Taking out insurance over common property

  • Following the relevant legislation (usually the BCCM Act)

  • Organising and attending body corporate meetings

  • Keeping records for the body corporate, including meeting minutes, owners details, financial accounts, details of assets held, and further authorisations


The body corporate makes decisions about these things at general meetings, and through the body corporate committee.


Levies


As an owner of a lot, you will generally need to contribute financially to the day-to-day running costs of the body corporate. These costs are referred to as levies.


Levy amounts will vary greatly, and depend on the condition, age, size and extent of the common property and shared facilities. It's important to remember that as properties get older, the upkeep costs generally increase.


Failing to pay your levies can attract substantial penalties. That's why It's important that when you purchase a lot in a body corporate that your contact information has been correctly provided to the body corporate manager through a Form 8. Your solicitor or conveyancer will often complete and submit this on your behalf as part of their role.


Your solicitor will also perform searches on the body corporate to make the necessary adjustments to ensure the previous owner (the seller) has paid any outstanding levies.


By-laws


Body corporate by-laws are additional rules set by each body corporate that regulate what owners, occupiers (renters) and their guests can and cannot do. They generally cover a range of things, such as pets, noise, renovations/modifications, and parking arrangements.


Before entering into a Contract of Sale, you should always obtain a copy of the body corporate by-laws to ensure that you understand the rules you are bound by as an owner. In some circumstances, you may need to request and obtain approvals from the body corporate for certain issues (such as keeping a pet at the property). You may want to consider including a special condition in the contract of sale so you have the ability to terminate the contract should these requests not be approved.


Maintenance


The body corporate is generally responsible for the maintenance of common property and specific elements of the property


Common property may include:

  • a shared driveway

  • elevators and stairways

  • swimming pools

  • tennis courts or golf courses

  • leisure spaces (garden and lawns)

  • roadways


The survey plan for a body corporate property establishes the boundaries between the lots and the common property. A solicitor of conveyancer will obtain a survey plan as part of their role, and they are often included in the contract of sale.


Without going into too much complexity, a body corporate is generally registered as a Building Format Plan (BUP) or Standard Format Plan (GTP). It is important that lot owners understand what type applies as it will define what is common property and who will be responsible for its maintenance.


What You Need To Do as a Lot Owner


As an owner of a lot that is part of a Community Title Scheme, there are a range of duties and responsibilities.


These may include:

  • Keeping your lot in good condition

  • Maintaining an area of the common property that you have exclusive right to use

  • Following relevant body corporate by-laws

  • Contributing to levies and fees

  • Paying additional property insurance

  • Avoid causing nuisance or hazard to other owners

  • Attending any body corporate meetings (if required)

  • Not interfering unreasonably with the use or enjoyment of

  • another lot

  • the common property by a person who is lawfully there


Body Corporate Searches


As part of your purchase, your solicitor or conveyancer will perform a range of searches.


A Body Corporate Records Search


This search will provide information regarding body corporate rules relating to:

  • Financial management

  • Property management

  • Committees

  • General meetings

  • Any additional insurance you may need to have for the lot

  • Any improvements you may need to undertake on the lot


A Body Corporate Information Statement (Form 13)


This statement will provide information relating to:

  • Any annual levies you must pay

  • Any outstanding levies you may be liable to pay from previous owners


Survey Plan


The survey plan of a CTS is a map that provides the exact surveyed boundaries and dimensions of lots, boundaries between lots as well as common property.


If you are considering buying a new apartment or unit in Queensland, don't hesitate to contact RHC Solicitors to get an affordable online quote. Our dedicated and experienced team will ensure that you are informed of all your Body Corporate obligations, obtain the necessary searches and enquiries, and that your purchase proceeds to a smooth and successful settlement.



 

Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication. The views and/or opinions expressed in this publication is that of the author and may not necessarily represent the views and/or opinions of RHC Solicitors.


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