A Body Corporate or a Owners Corporation is the body governing the strata property or more commonly known as units in a multi-story building. The Strata Schemes Management Act 2015 (NSW) sets out the rights and responsibilities of an Owners Corporation, as well as the individual owners of the strata unit.
An owner of the Strata Title owns a legal title to the lot, and not the land the on which the building is on.
What is the role of the Body Corporate/Owners Corporation?
The Body Corporate/Owners Corporation is responsible for the maintenance and management of the common property. Each Body Corporate/Owners Corporation has their own regulations or by-laws which sets out rules that owners and residents must follow, and enforces them, such as rules concerning use of common property, governing behaviour and procedure for annual meetings as well as the appointment of council.
In maintaining and managing the common property, the Body Corporate/Owner Corporation must project expenditure for the future, and main a reserve called a sinking fund. This allows the Body Corporate/Owner Corporation to pay for building insurance and regular and ongoing expenses for the common property such as garden, swimming pool and lighting.
What is common property?
Common property is the building/s that comprises of all the lots or units owned by the Body Corporate/Owners Corporation. Common property includes:
How does the Body Corporate/Owners Corporation raise funds?
Each lot owner must contribute to the expenses of Body Corporate/Owners Corporation through the payment of strata levies, usually issued quarterly. The amount payable is proportionate to the strata entitlement of the lot as reflected in the Strata Plan. This is largely based on the size of the unit, and accordingly, the bigger the unit, in comparison to other lots on the same block, the higher the proportion of outgoings.
The levies are used in payment of the administrative funds and the sinking funds. The Body Corporate/Owners Corporation may issue special levies for unforeseen circumstances and when there are no funds held in the reserve. Levies are separate to other fees payable and are in addition to council and water rates.
It is important to note that even if the damage does not directly or indirectly affect your lot or unit, you will still be required to pay the levies, which is payable by everyone. If you do not pay such levies the Body Corporate/Owners Corporation has powers to recovers such costs from you.