We all need a place to call home: our rest, respite, and rejuvenation location. Somewhere to relax, share food and drink with friends and family, and unwind after a long week doing whatever keeps you busy. Some folks live in a property that is part of a strata. These are usually conjoined dwellings such as units, townhouses and apartments.
In Australia, most semi-detached or attached properties are part of an owner's corporation or body corporate. In this article, we’ll debunk the owner's corporation, including how to change the body corporate. By the end, you’ll be an expert on all the various roles and responsibilities of the owner's corporation.
What Does Body Corporate Do?
The role of the owner's corporation will vary from body corporate to body corporate. It is also slightly different in each state. However, as a rule of thumb, your manager is required by the Owners Corporations Regulations 2018 and Owners Corporations Act 2006 to carry out these duties:
- Prepare and send any notices required by the Act
- Appoint chairpeople/secretaries
- Prepare annual general meetings (AGM), and run them
- Prepare minutes and actions for the AGM
- Ensure compliance with the act
- Carry out tasks as decided in the AGM
- Hold Special General Meetings to pass resolutions
- Charge owners levy fees and manage budgets
- Keep all records, financial and others
- Attend to all communication for the body corporate
- Prepare financial statements and annual budgets
- Pay any expenses/accounts
- Deal with insurance claims
Professional vs Volunteer Body Corporate Manager
It’s worth noting that an owner's corporation can be managed by a private company, which is appointed by the vote of the owners or managed by the property owners themselves.
The private companies are professional managers that mainly run body corporate groups as their day-to-day work. These are qualified, salaried professionals. These companies usually hold indemnity insurance. They mainly operate for profit.
The other type of manager is a volunteer committee. This is an owner or group of owners who carry out the duties of the manager in their spare time. This role is more common in groups of owners in smaller dwellings, such as blocks of 3-4 units or townhouses, who have formed their own body corporate.
While a volunteer management structure gives more control over budgets and resolutions, it is a lot of work. It is usually suited to retirees as they have the time and space to manage the owner's corporation.
It’s vital to note that both types of managers are responsible for the same duties as required by the Act, so you should expect the same level of responsibility and involvement from volunteer managers that you do from paid ones.
What Else Does a Body Corporate Management Company Do?
As well as the above list, your body corporate management company should also take care of the following:
- Ongoing maintenance and groundskeeping for common areas, known as common land
- Arranging quotes and estimates for repair or improvement works
- Issuing breach notices to owners or tenants who breach the act and the owner's corporation resolutions
Myth - The Fees Are Not Worth It
You may have heard that owners' corporation fees are steep and not worth it. However, when you consider everything the management company does to administer the property, the fees are not bad.
For instance, dealing with trades, managing budgets, obtaining insurance, issuing breaches, and all the other responsibilities of the role stack up; It’s quite a lot of work.
Also, if your property is insured under the body corporate, the fees are pretty much what you would pay in annual insurance premiums anyway. So it's not like you’d save much money otherwise.
Can I Change Managers?
If you’re not happy with your current owner's corporation management company, you can arrange the vote them out at a special general meeting. First, you should contact the other owners, either by door-knocking or by obtaining the owner's register from the current management company. You want to ensure that you have a quorum or majority of owners. Without this, you cannot pass the special resolution.
You can then escalate the process by contacting other management companies for quotes for managing your owner's corporation. Ensure that property insurance is included in the quote if individual properties are not already insured privately. Next, you hold a special general meeting. Someone will need to make a motion to appoint the new company. You can invite the new company to this meeting as well.
Once you’ve made the motion, then someone will need to second it. After this, you all vote. If you have a majority, you can now change the body corporate. The new company will then issue your current manager with a termination notice. It is worth noting that this must follow all the legislation, which may vary from state to state.
This process can take a month or so, as the old company needs to transfer all files and paperwork to the new manager.
A Corporation Conclusion
In this article, we’ve explained the roles of the body corporate or owners corporation. We’ve outlined the different roles and responsibilities under the relevant legislation and also explained the difference between volunteer and professional managers.
We’ve also debunked some myths, including the one that the fees are not worth the money. Finally, we have shared how you can change management companies, following a step-by-step process. By now, you’re an absolute expert in all things body corporate.
