Developments involving unit titles are becoming increasingly popular as more and more people elect to live in apartments or town house developments, particularly those located in inner-city areas. These developments can take the form of clusters of town houses, terraced housing or low and high rise apartment blocks. A body corporate is made up of all of the owners in a unit title development.
Unit Titles Act
Body corporates are governed by the provisions of the Unit Titles Act 1972. The Act allows for the subdivision of land into units so that each unit is owned by an individual owner and common property is owned jointly by all of the owners.
The Act sets out rules for the use and management of both the Units and the common property. If you are considering purchasing a property with a Unit Title, or you already own one, then you should be aware of your obligations as a member of the body corporate.
Costs
The cost of maintaining the common areas and the external structure of the building is the responsibility of the body corporate whereas the cost of maintaining the internal buildings are for the cost of the individual owners.
A body corporate will therefore levy a charge on an annual basis to cover the cost of maintenance of common areas. The body corporate is also responsible for insuring the whole development and indeed this is one of its most important functions. These costs are shared on a proportionate basis by the individual owners.
Rules
A body corporate also makes rules in relation to the development as a whole. There are standard rules set out in the schedule to the Unit Titles Act but these can be amended to suit the individual requirements of particular developments or from time to time as the owners may decide. You should be familiar with the matters contained in the rules as these are important in the event of any conflict or disagreement between individual owners and/or the body corporate.Secretary
A body corporate must appoint a secretary to oversee administration. This can be one of the owners of the units or, in the case of larger developments, a professional firm is often appointed.
The secretary is responsible for convening meetings of the body corporate, preparing minutes, effecting insurance, collecting levies and paying accounts as well as other administrative tasks. If a professional firm is appointed a management fee will be payable and the cost of that is added to the charges collected from the owners by the body corporate.
If you are considering purchasing a property which is part of a unit title development, it pays to make enquiries as to how the body corporate is run and the charges which are levied as in the case of larger developments, these can sometimes be quite significant.
So long as they are properly run, body corporates are an extremely effective way of managing property and minimising the maintenance headaches and hassles that can be associated with home ownership.