A body corporate is essentially an entity made up of all the apartment owners in a building. To provide a transparent view how funds are managed, a body corporate is generally administered by a separate company with funds held in an independent trust. 

As well as presiding over the maintenance of all shared areas within an apartment building such as the lifts, lobby, or rooftop garden, a body corporate also governs specific rules the occupants have to follow. For example many body corporates don’t allow residents to hang washing out to dry on their balcony, or install a heat pump which would impact the external aesthetics of the building.

Body corporates whose members own freehold apartments have more control and ownership over the complex in comparison to leasehold apartment owners.

Structure of a body corporate

Legally, body corporates are required to hold an Annual General Meeting (AGM), with many having several additional meetings during the year to discuss issues of joint concern or to exercise collective property rights. At an AGM, body corporate members elect a chairperson to run these meetings and handle inquiries.

Some body corporates have other committee members like a secretary and treasurer to help with the administration. If any apartment owner has an issue they want raised at the AGM, they are required to approach the chairperson for a motion to be included in the meeting agenda.

Body corporate resolutions

• A Special Resolution is a decision which could have significant impact on unit owners, like imposing a levy, selling common property or borrowing money. Special Resolutions require 75 percent of all eligible voters to vote in favour.
• Ordinary Resolutions cover virtually all other decisions, like changes to the operating rules, maintenance contracts, and enforcing body corporate rules. To pass, an ordinary resolution vote only requires a fifty percent majority.

If you object to a resolution, you have 28 days to give written notice to the body corporate with your reasons. You can also apply to the Tenancy Tribunal and enter their dispute process. After 28 days, objections have no effect.

Body corporate maintenance plans

Body corporate responsibilities include keep the building in a safe, working condition. All body corporate members have to contribute to ensure maintenance and repair costs are covered. It’s pretty set in stone too, as by law, unit titles are responsible for having a long term maintenance plan to deal with payments for damages or repairs.

Generally once a year the building will need a wash. Depending on the cladding, it may need to be painted every five to ten years. In twenty years the building may need a new roof, while every thirty years the elevator might require reconditioning. A long-term maintenance plan should spell out everything the building needs to function and have an appropriate payment plan in place to support this.

Read more: Apartment owners face maintenance time bomb

Does your body corporate have formalised maintenance plans? These are required under the Unit and Titles Act 2010, and there are serious repercussions for body corporates who choose to ignore the need for funding plans. Owners potentially face hefty levies that would need to be paid upfront, or risk their home and investment

Body corporate fees

It seems there are no standards for how much you should pay or what a healthy reserve might look like. Body corporate fees can cost anywhere from a few hundred to tens of thousands of dollars each year. Rather than the amount, ask questions about how the body corporate is structured, how funds are managed and what the maintenance forecast is. Is there a regular audit, or are spot audits carried out randomly? Are the correct controls are in place to avoid the risk of fund mismanagement?

Being part of a body corporate isn’t something to be taken lightly. It is your responsibility as an apartment owner to understand the plans (or lack thereof ) of the body corporate, so you stay across any issues that could affect the value of your home.

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