Strata, Body Corporates & Owners Corporations - What does it all mean?
Body Corporate is the term used in Queensland and Owners Corporation is the term used in New South Wales. These terms are used interchangeably to describe a jointly owned property that includes at least two lots (units) and common property. When these criteria are met, the property can be ‘strata titled’ to establish a body corporate, or owners corporation (depending on the state). Strata is a widely used term that is associated with the ‘strata titling’ i.e. jointly owned aspect of the property.
A body corporate / owners corporation is a legal entity that comprises joint ownership of a property and shared obligations and responsibilities. There are various types of developments that fall under this structure, such as duplexes, apartment buildings, townhouse complexes, and industrial sheds.
When you purchase a unit within a strata titled scheme, you automatically become a member of the body corporate/owners corporation, joining other unit owners in the scheme. You remain a member until you sell your unit or your name is removed from the title. While you have obligations to comply with as a unit owner, your level of involvement in the day-to-day operations of the community is up to you.
What is a Strata Manager?
A Strata Manager is an individual or company engaged by the Body Corporate, or as they are known in New South Wales, the Owners Corporation, to assist in managing their administrative and financial affairs. Typically, the Strata Manager handles most of the duties of the Secretary and Treasurer and provides expert advice on strata issues and relevant legislation. The appointment of a strata management firm is essential to assist the committee in fulfilling their obligations to run the scheme effectively. The instrument to appoint a Strata Manager is an ordinary resolution passed at a general meeting, followed by ratification of terms through an Administration Agreement.
What is a Strata Managers Role?
A Strata Manager is engaged by the owners (i.e. the Body Corporate or Owners Corporation) to supply administrative and financial management services.
These services will be outlined in a document known as an administration agreement, which is the contract between the owners and the Strata Management company. You will find a list of services under the Services/Management Services section of this website.
How much does Strata Management Cost?
Strata Managers are paid a fee agreed upon by the Body Corporate at the time of their engagement. This fee is included in the scheme’s budget as an administrative fund expense.
Additional fees may be charged for duties listed as extra services in the agreement, such as attending court proceedings, or arranging maintenance quotes.
Who are the Committee?
The committee is usually made up of owners in the scheme. Outside of general meetings, the committee oversees the day to day operations and make decisions on behalf of the owners with regards to by-laws, for example pet approvals and repairs and maintenance.
The committee comprises a Chairperson, Secretary, and Treasurer, known as executive positions, along with ‘Ordinary Members.’ While not all positions must be filled, it’s desirable to have broad representation on the committee.
What is Common Property?
Your building plans will outline the scheme land, its buildings and the common property. Each member of the body corporate or owners corporation owns a share of the common property, which may comprise (as an example) garden beds, lawns, access roadways, swimming pools, common doors and windows.
Your levy payments contribute towards the maintenance and repair of the common property and facilities within your community. The committee, acting on behalf of all owners, are responsible for ensuring that the buildings and common property are well maintained. They can engage the services of professionals, such as gardeners and pool cleaners to carry out maintenance on the common property.
In Queensland, a scheme recorded as a ‘standard format plan has different maintenance responsibilities to a scheme under the ‘building format plan’. A lot under the standard format plan will generally be a freestanding dwelling, e.g. a villa with its own fenced yard area. In these cases, the owner will be responsible for the repair of their own roof and all within the lot boundaries, as opposed to a lot in a building format plan.
Who Determines the Levy Totals?
All owners have the opportunity to review and vote on the proposed budget each year, which determines the levies payable by each owner. The budget, including levies for the administration and sinking/capital works funds, is approved each year at the annual general meeting. The Strata Manager works with the committee to draft the budget, which can be discussed and adjusted before approval by a majority vote.
What Laws and Regulations Apply?
In Queensland, Body Corporates are governed by The Body Corporate and Community Management Act (1997) and its associated Regulation Modules. In New South Wales, Owners Corporations are governed by the Strata Schemes Act XXX
Every state has its own strata laws and regulations.
Queensland: Body Corporates in Queensland are governed by the Body Corporate and Community Management Act 1997.
New South Wales: Owners Corporations in New South Wales are governed by the Strata Schemes Management Act 2015 No. 50
