Understand your Body Corporate obligations before you sign your contract

If you are planning to buy a property that is part of a Community Titles Scheme (ie a unit, apartment or a house that shares common property with other houses), it is important that you have an understanding of what your responsibilities and obligations as an owner of that property will be.

You will have certain rights and responsibilities for the common property (for example driveway, pool or gym) that is shared with other owners in your complex.

Once you purchase a property in a Community Titles Scheme, you will automatically become a member of the Body Corporate. The Body Corporate’s job is to manage the running the apartment building and handle all of the common area issues.

Some of the issues handled by the Body Corporate are:

• Common areas, such as any gardens around the building, entry, foyer, lifts, stairwells and shared driveways.

• Decisions about fees that individual owners pay to the body corporate so it can operate effectively.

• Making rules for the residents to follow (these are called By-Laws).

• Maintaining insurance, such as public risk insurance for all common areas.

As an owner, you will need to contribute financially to the everyday running costs of the Community Titles Scheme and common property by paying levies. The amount of the levy payable varies between different schemes and is dependent on many factors, including the age and condition of the common property and shared areas.

An administrative fund is used to pay the everyday expenses of the body corporate, ie general maintenance grounds and gardens. The sinking fund contains funds for the overhead expenses of the body corporate for the medium to long term, for example, internal and external painting of the building, or building repairs and additions. It is important these funds contain adequate monies to cover the necessary expenses when they fall due. In the event that the funds are not sufficient, the body corporate (ie all the unit owners) will be generally required to make an additional contribution to make up the shortfall.

Before you sign a contract to purchase a property in a Community Titles Scheme, you should inspect the Body Corporate records to ensure that you are aware of the levies payable and additional payments that may be required.

The Body Corporate is also responsible for deciding a set of rules that governs the behaviour of unit owners, tenants and guests on the common property within the complex. These rules are called By-laws and will cover a range of issues including noise, whether or not pets are allowed in the complex, and parking. You should obtain a copy of the by-laws for the unit you intend to purchase so you know what you can and can’t do while living in your unit, and what you will need to seek permission for once you own the property.

We strongly recommend that you have your conveyancing contract reviewed by our conveyancing team prior to signing to ensure that you understand the costs and obligations that will be relevant to your Body Corporate.

Millwater Tyrrell Law offer a free initial discussion about your sale or purchase with our expert Ipswich conveyancing team. Do not hesitate to give us a call to find out more about body corporate obligations on your conveyancing contract.