What is a Body Corporate and What Does it Do?

As more and more Queenslanders make the switch to apartment living, many of us will find ourselves experiencing community living for the first time and discovering what it means to be part of a body corporate.

This article will explain what a body corporate is, what it does and how it operates.

So, What is a Body Corporate?

A body corporate is a legal entity which is created when land is subdivided and registered under the Land Title Act 1994 to establish a community titles scheme. Community titles schemes are common for a residential apartment blocks, townhouse complexes, shopping centres, business parks and duplexes.  Simplistically, it allows owners to individually own their lot (apartment/townhouse etc.) whilst sharing collective ownership of common areas (driveways, lifts, carparks etc.)

In very basic terms the body corporate is in charge of running the building or complex (scheme) and handling all of the common area issues. Every lot owner in a community titles scheme are automatically members of the body corporate when they buy their lot. The body corporate is a separate legal entity and can enter into its own contracts and manage its own legal proceedings (through its committee).

What Does a Body Corporate Do?

The body corporate maintains, manages and controls the common property on behalf of owners.

Body Corporate duties include:

• deciding the amounts to be paid by the owners to make sure the body corporate can operate
• making and enforcing its own rules, called by-laws, which tell owners and other people who live in the scheme what they can and cannot do
• taking out insurance on behalf of owners, such as public risk insurance over the common property and building insurance
• managing and controlling body corporate assets
• keeping records for the body corporate, including minutes of meetings, roll of owners details, financial accounts, registers of assets, improvements to common property by owners, engagements and authorisations.

The body corporate makes decisions about these and other things at general meetings and through the committee.

How is a Body Corporate Financed?

Every lot owner makes financial contributions (called levies) to the body corporate that are pooled together to maintain and manage the common property on behalf of owners.

The size of levies and the frequency of payment are decided by all owners at the Annual General Meeting (AGM).

There are two types of contributions set by the body corporate:

1. Administration fund: Used for the ongoing maintenance of all common areas. Cleaning and insurance are examples of items paid for with the administration fund.
2. Sinking fund: Assigned for future capital expenses such as painting, roof repairs, lift maintenance and any major improvements.

How Are Decisions Made?

Decisions are made by owners in two ways:

• At a meeting of all the owners (a general meeting)
• At a meeting of the committee for the body corporate

An individual acting alone cannot make a decision.

What is the Body Corporate Committee?

Elected representatives of the Owners. The Executive Committee of the Body Corporate represents owners or owners’ nominees and is responsible for the day-to-day running of the scheme. Members are elected at each Annual General Meeting (AGM).

Get Involved!

Remember that as a lot owner you are entitled to be involved in Body Corporate committee meetings and have your voice heard.

By being actively involved in the running of a body corporate, lot owners can have a say in how a community allocates its funds and can assist in planning committee projects.

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