Body Corporate Basics

What is a Body Corporate?

A Body Corporate is the legal entity automatically created when a Community Title Scheme(CTS) is Registered in the Dept of Natural Resources (previously The Titles Office).

A Community Title Scheme is a method of Titling and subdividing land, or land and buildings, such that multiple Lots are created according to a Community Management Statement(CMS). The CMS describes the Scheme, the number of Lots, Lot Entitlements for each of the Lots, the By-Laws of the Scheme, any Exclusive Use allocated to a Lot, and other details.

Every Community Title Scheme has a Body Corporate, comprises at least 2 Lots, and has some Common Property. Each and every Owner of a Lot is automatically a member of the Body Corporate.

Are there different types?

Yes. Most Bodies Corporate are for Community Title Schemes which are simple and 'Basic', but some Community Title Schemes can be part of a 'layered' arrangement of other Schemes, with a Principal Body Corporate at the top, and one or more Schemes below. Most often these more complicated arrangements are established because there are 'mixed uses' in the building or community which is the subject of the Titling arrangement e.g. a building which comprises a strata hotel plus a residential apartment component, and maybe some retail shops.

What is the Body Corporate responsible for?

The Body Corporate is responsible for the repair and maintenance of common property. The lot owner is responsible for their lot.

Bodies Corporate are not allowed to spend any joint money on works that benefit only an individual lot, as it’s not fair to use of their funds. The key to responsibilities lies in the scheme for your building; Standard Format Plan (SFP) or Building Format Plan.

Building Format Plan (BFP)

In a BFP the boundary of the lot is the entry door and external walls. Measurements are taken from the centre of the walls, floors and ceilings. The other side of the wall floor or ceiling is either another lot or common property. In a BFP the lots are the building only and the land around each structure is common property.

Standard Format Plan (SFP)

Boundaries are in the ground and defined by surveyors marks, so the lot includes all the land surrounding the structure just like a feestanding home. An SFP usually has less common property and more lot.

Repairs can at time be carried out on common property but to infrastructure that belongs solely to a lot owner, in which case this is the lot owners responsibility. (EG a pipe that runs through the roof but services only one lot owner.)

What is common property?

The boundaries for common property and individual lots appear on your plan for your scheme – whether your building is a building format plan or a standard format plan. Defining the boundaries is important for deciding who is responsible for what.

Insurance

What is it?

Body corporate insurance, covers common contents and property under the management of a strata title or body corporate entity.

Owners of strata units typically share the premium costs of strata insurance as part of their strata fees and liabilities. Strata insurance is mandatory and must also provide public liability covering people that may be injured on common property.

What does strata insurance cover?

Strata insurance generally covers the building and common property and contents as defined on the title for the property. This might include common areas, garden equipment, wiring, lifts, swimming pools, car parks, walls, windows, gardens, ceilings and floors. These policies often have to cover common property that the average home policy does not.

Other common property that you might find is covered under strata insurance may include some of the fixed parts of your unit, such as ducted air conditioning, but it will not cover everything. If you own or lease a strata property you should read the policy carefully so that you understand what is not covered in your unit.

What does strata insurance typically NOT cover?

Strata insurance covers only common or shared property and may list certain exclusions, such as coverage against landslip or flood damage, or for the property’s fencing. It is important to remember this type of insurance doesn’t cover the contents and personal items of unit holders or residents.

Make sure you have appropriate contents cover for your belongings, and for those other things strata insurance does not protect.

How do I make a claim?

Contact your Body Corporate manager as a matter of urgency and they will provide advice and details required to enable a claim to be lodged.

Financial

Administration Fund

The Administrative Fund is one of two funds( the other is the Sinking Fund) that are a statutory requirement for a Body Corporate to not only have established, but to then operate strictly in accordance with the legislative requirements under the Body Corporate and Community Management Act (BCCMA) and the particular Module Regulations applicable to the Scheme.

The Administration Fund is used to pay the Body Corporate's expenses which are of an annual and non-capital nature such as Insurance, any Resident Manager's salary, Body Corporate manager's fees, gardening and other grounds and minor or recurring building maintenance. Generally everything other than expenditure on major improvements, and significant non-recurring plant and building maintenance are funded from the Admin Fund.

The Body Corporate has a statutory requirement to ensure that Owners are levied to an extent sufficient to supply the Admin Fund with the resources necessary to fulfill its obligations under the Act.

Sinking Fund

The Sinking Fund is one of two funds (the other is the Administration Fund) that are a statutory requirement for a Body Corporate to not only have established, but to then operate strictly in accordance with the legislative requirements under the Body Corporate and Community Management Act (BCCMA) and the particular Module Regulations applicable to the Scheme.

The Sinking Fund is used to pay the Body Corporate's expenses which are of a capital nature i.e. expenditure on major improvements, and significant non-recurring plant and building maintenance are funded from the Sinking Fund.
It is also a requirement that the Body Corporate has a long-term (minimum ten year) guide as to the expected maintenance and capital replacement costs likely to be incurred for the building, plant, and grounds - each year's Sinking Fund budget then needs to allocate funding in accordance with this long term plan.

The Body Corporate has a statutory requirement to ensure that Owners are levied to an extent sufficient to supply the Sinking Fund with the resources necessary to fulfil its obligations under the Act.

About Committees

What is a Committee?

The Committee is the group of Owners who are appointed (by election or nomination) at each Annual General Meeting, to run the affairs of the Body Corporate for the next 12 months. The Committee comprises an 'Executive' - Chairman, Secretary, and Treasurer, a number of Ordinary members, and possibly non-voting members (in the case of a Body Corporate with a Resident Manager/Caretaker and/or a Body Corporate Manager, representatives of these two entities are automatically nonvoting members of the Committee).

The Committee of a Body Corporate has wide powers - they effectively are like the Board of Directors of a Corporation, and are democratically appointed in accordance with the Act to run the Body Corporate - and provided they operate within their powers and the requirements of the Act, they should be permitted to 'get on with the job', and be supported by the rest of the Body Corporate.

Is a Committee necessary?

Not only is it a statutory requirement for there to be a Committee but we consider an active and properly functioning Committee to be a vital component for a Body Corporate and community.

How is a Committee elected?

The Committee is decided each year at the AGM.
The maximum number of Committee positions is nine - 3 'Executive members', Chairman, Secretary, Treasurer, 4 Ordinary members, and 2 nonvoting members. Note that the expression 'Committee positions' was used - because one person may occupy more than one position e.g. one person can be Chairman, and Secretary, and Treasurer, or in another situation a Body Corporate might have elected one person to the Chairman's position but couldn't get sufficient candidates for other positions and so the only other candidate occupied the Secretary and Treasurer positions.

With regard to the minimum, there must be at least 3 voting members on a Committee, and this could be one person each as Chairman, Secretary, and Treasurer, however, a person can occupy more than one of the Executive positions, so another arrangement might be that the Committee ends up with person 'A' as Chairman/Treasurer, person 'B' as Secretary, and person 'C' as an Ordinary Committee member.

Nominations are called for Committee positions prior to the financial year end - (Nomination Forms must be sent out to each Owner).

How do I become a Committee member?

1. you can nominate yourself to be appointed to a position(or more than one position) at the AGM when nominations are called - nominations will be called by way of the Secretary or Body Corporate manager sending out Nomination forms, and this will occur a number of weeks prior to the end of the financial year of your Body Corporate.
2. someone else can nominate you via this Nomination Form but you must sign the form to indicate your consent to the nomination.
3. if not all positions are filled by way of nominations received before the AGM then remaining positions will be filled by way of calling for nominations from those present at the meeting, if you're at the meeting, you can nominate yourself, or have prearranged to have someone else present nominate you(but you need to be present as well in this situation or have provided the person nominating you with your written consent to the nomination).
4. you can make it known to the Committee that you are interested in serving on the Committee - if a vacancy arises throughout the year it will need to be filled and the Committee is able to invite any eligible Owner to fill a vacancy - if you've let them know prior of your interest, you may get asked by them to join.

Caretakers/Resident Managers

What does a building manager do?

A building manager can have two roles. The first is as a facility manager/caretaker which means they basically provide services to ensure that the common property facilities are maintained. This is usually set out in a form of agreement with the body corporate.

The other side that a building manager can have is a letting agent where they act as letting agent for owners of lots like any real estate agent can.

Why do we have one?

If your Body Corporate has a Resident Manager then nearly always this was a decision made by the developer when the Scheme was established. In Queensland, the majority of large residential buildings have an on-site building manager, or Resident Manager.

How much do they get paid?

The Resident Manager gets paid a salary under the terms of his Agreement with the Body Corporate - that contract document will, along with other things, outline how he is to be paid, how much, when, and how yearly increments are to be decided.

What if we're unhappy with their work:

The management of the Resident Manager is the Committee's responsibility. If you as an individual Owner are concerned about how he is doing his duties, then as a general principle you should direct your concerns not to them directly, but to the Committee possibly via the Body Corporate Manager. When there is dissatisfaction about how a Resident Manager is performing his duties, care is needed to handle the situation properly so that it doesn't escalate.

The Committee is charged with the responsibility of looking after the interests of all Owners, and getting the building maintained properly, and more often than not the Resident Manager's salary is one of the more significant budget costs, so the Committee does have an important responsibility in trying to ensure that there is a good working relationship with the manager, and that the work is being performed.

Who tells them what to do?

The supervision and direction of the Resident Manager is the Committee's Responsibility in the first instance, and they may delegate the actual interface and communication with the manager to one person, or a subcommittee.

General Meetings – AGM & EGM

When is my AGM?

Each year the AGM must be held within 3 months following the end of the financial year of your Body Corporate. The exact date is usually determined by your Committee, subject to the schedule of the Body Corporate manager.

Who sets the topics/agenda?

The Body Corporate manager normally compiles the Agenda in conjunction with the Committee and will commence by adding Statutory Motions that must go on every AGM Agenda, then Motions will be added that Owners have submitted and finally Motions that the Committee want added.

How can I add a Motion?

Any Motion from an Owner must reach the Secretary prior to the end of the financial year of the Body Corporate in order for that Motion to be included on the Agenda of the AGM - if it is received late, the Motion will be held over and must be placed on the Agenda of the next General Meeting of the Body Corporate following the AGM, unless the Owner who submitted the Motion asks for it to be withdrawn.

Unless you have complete confidence in your ability to draft a legally correct Motion, we suggest you request assistance from your Body Corporate manager to get the wording correct - an incorrectly worded Motion, or one that may be in contravention of the legislation, runs the risk of being ruled out of order at the meeting by the Chairman and not put to the meeting.

Do I have to attend?

No, you don't have to attend, nor are you required to vote, however you can have your say and vote without attending by completing the voting paper which will be sent out to you prior to the date of the meeting.

About Body Corporate Managers:

Are they required?

It is entirely up to the Owners whether their Body Corporate engages a professional manager to look after their affairs.

Nearly all large Schemes would engage a manager, and the majority of smaller Schemes also. The complexity of the legislation and the workload for any individual Owner attempting to do this work, not to mention the responsibility and liability for 'getting it right' soon convinces members that the engagement of an experienced manager is the only sensible option.

What do they do?

A Body Corporate Manager will normally have a list of functions and duties in their Agreement with the Body Corporate and these basically will encompass the full administration of the Scheme and will typically include such matters as:

- managing the financial accounts of the Body Corporate;
- looking after insurance matters, claims and renewals, and Owner's queries;
- managing the correspondence with Owners, contractors, and other 3rd parties;
- drawing up proposed new budgets each financial year;
- calling the AGM, and sending out related Notices, Nominations etc;
- holding of the AGM, and issuing the Minutes following the meeting;
- setting up the new budgets adopted at the AGM, and the resulting Levies;
- attending to the issuance of Disclosure Statements for Owners selling their Lot;
- attending to the calling of any EGM;
- managing Committee issues, including calling of Committee Meetings and issuing Minutes of those meetings;
- advising any Owner on matters of Body Corporate law and procedure;
- managing any dispute and resolutions that may arise.

Contact Us

PO Box 6742 GCMC
Queensland 9726, Australia
Phone: 07 5613 2055 
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Office Hours

Mon-Fri: 9:00 – 16:30
Holmac Strata Pty Ltd

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