When choosing to buy your first home, a lot of Australians will be tempted to buy a unit or townhouses. When we were on the market, one of the properties we were quite serious about was a Townhouse in a great area. This led us to learn about body corporate which oversees when it comes to their property, especially the legal and legislative issues.
This is where your “body corporate” becomes quite handy.
What Is A Body Corporate Useful For?
There are two advantages when you employ a body corporate:
They’re Trained
Compared to your own business and legal negotiation, having a body corporate means you have experienced industry experts. They’ve been through many legislation procedures, and know about trends in these property types. Imagine letting your neighbours just choose everything for everyone all the time!
Partnership Benefits
A good body corporate can coordinate the payment and help with the shared costs for the maintenance. And, there are many types of properties that require a body corporate:
- Double-Storey Villas
- Apartment Blocks
- Commercial and Residential Mixed-Use Developments
- Attached Townhouses
The Contribution Of An Owner
Having a property that has a body corporate allows you to get a membership to that body corporate.
The body corporate, in turn, and usually through a professional manager, handle different matters, such as:
- Essential services
- Financials
- Compliances
- Insurance
- Administrative Procedures
For your part, you’ll want to keep the property consistent and attractive. You can install some air-conditioners or satellite dishes but some body corporates will dictate that only certain lawn types, outer wall colours and finishes will be allowed. Eg. All houses must have rendered frontages and painted in a certain colour scheme so that they all match.
What Operations Does A Body Corporate Have?
A body corporate is usually superseded by a manager figure, who is a sole signatory for the account under delegation from the members of the body corporate, which includes you and your neighbours.
Although not necessarily a party, there’s usually a general meeting when beginning the financial year, under the body corporate.
Among the concerns of the agenda are things, such as:
- Address member’s concern (this is your chance to shine)
- Contributions (from each member)
- Special Levy (for sufficient funds for specific tasks, and needs the approval of corporate members)
- A plan and schedule for other meetings (upon necessity)
And of course, the budget. But, this also includes your premium insurance for the building proper and the public liability risk coverage for common property.
There’s a body corporate account for these, all of which account for repairs, lighting, maintenance, and fees for the manager.
When I was looking over the minutes of past meetings for the property I was looking to buy, I found that none of the residents had attended a meeting in years. The properties and the shared land all seemed to be in good condition, but this was a concern to me. I think the fact that the meetings were held in another suburb 30-40 minutes away during business hours was a major factor in their complacency.
The Funds
A body corporate ensures the full reinstatement insurance for two areas:
- Insurance for the Building (Proper)
- Insurance for Public Liability Risks (Common Property)
The funds from the body corporate also include the maintenance of services like:
- Adequate public lighting.
- Common Grounds.
- Upkeep of a building’s exterior and common items like security gates, intercoms.
The Insurance For The Building (Proper)
This type of insurance for the body corporate covers primarily for direct and consequential damage to the building and its respective fixtures.
Unfortunately, this doesn’t cover wear and tear—or damage to carpets.
Fortunately, it can cover legal liability for the common property—of course, this takes from the funds.
The Insurance For Public Liability Risks
This type of insurance applies to what is known as “common property”.
These are places where a person or many people can utilize, independent of the rooms, for example (which is part of the building proper).
This includes a good amount of nice stuff, including:
- Laundry
- Driveway
- Gym
- Pool
- Outdoor lighting
- Fences
Of course, you have to keep a lid on the management of these properties too, as damages can lead to legal risks.
The Main Use Of Body Corporate Insurance
The body corporate will honour one insurance that can cover full replacement of all buildings and a public liability risk insurance for common property.
And, you can ascertain the body corporate to the buildings and liability risks have the property covered.
This is especially important for the walls, services, and facilities.
That means that when you claim insurance, you have only one company to deal with, as far as a payment.
You don’t also need another policy if your body corporate also has one—all in one package.
Especially with common property, this arrangement much more economical as you’re assured your public liability risk insurance on the common property.
As much as fun is important in the use of pools and gyms, accidents do happen from time to time, which is where a body corporate public liability risk coverage has critical importance.
The Manager Of The Body Corporate
The manager primarily commits to keeping a record for the body corporate.
You can imagine that without this, many problems with regard to member guidelines, duties, and upkeep are not standardized for the whole body corporate. As families move in and out of the complex, this type of information would get lost otherwise.
The manager commits to this, but also to some more tasks, such as:
- Provides the schedule for caretakers and the implementation of ground maintenance, as well as for gardeners.
- Ensures that the essential services comply with legislation.
- Provides procedures that keep the essential services and facilities are in good condition.
- Make sure that the insurance covers are recorded, which includes records on public liability.
- Provides advice in matters of public liability.
- Reviews and submits day in paperwork, especially with solicitors.
- Negotiate deals with insurance companies and brokers for the economical benefits of the body corporate.
- Assist to resolve problems and disputes in with member’s concerns like units with tenants, noise pollution, issues on the needed facility, and property development.
- Organize meetings with members of the body corporate with records for finances, the contribution of the members, and other concerns.
It’s important to understand that although having a body corporate is a good investment for all the reasons stated, it’s also a community member that doesn’t make their decisions without the consideration of its members.
In that seems, if it piques your interest, you can give any of these bodies corporate a call – – you’re in good company.
