What is an Owners Corporation?
An owners corporation manages the common property of a residential, commercial, retail, industrial or mixed-use property development.
Owners of flats, apartments or units are usually members of an owners corporation, previously known as a ‘body corporate’. All bodies corporate became owners corporations on 31 December 2007, when the Owners Corporations Act 2006 came into force. This law sets out the duties and powers of owners corporations.
A person who owns property under an owners corporation automatically becomes a member of that owners corporation. As a member, that person has legal and financial responsibilities to the owners corporation.
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Master Planned Estates
Some new land estates are becoming owners corporations. This is especially common where estates include private swimming pools, tennis courts, golf courses or gymnasiums. An owners corporation may also be formed to maintain parks and wetlands contained within the estate.
Many retirement villages have owners corporations. In a strata title village, the unit owners are automatically members of the owners corporation. They have the right to attend owners corporation meetings and stand for election to the owners corporation committee.
For more detail on the structure and functions of owners corporations >>>
What should I do before buying a property managed by an owners corporation?
Get a copy of the owners corporation certificate and inspect the owners corporation register. These documents contain important information about fees, allocation of lot liability and lot entitlement, and legal liabilities.
The lot owner selling the property must ensure the certificate is included in the section 32. A buyer can also purchase the certificate from the owners corporation.
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The Operation of Owners Corporations
Classes of Owners Corporations
Depending on their size, owners corporations have different levels of responsibilities and duties.
Two-lot subdivisions are exempt from many of the legal requirements placed on larger owners corporations, such as:
- requirements for notices of fees
- procedures for meetings and decision-making
- keeping records and an owners corporation register
- having insurance for the owners corporation.
Prescribed owners corporations, which have more than 100 lots or collect more than $200,000 in annual fees in a financial year, have additional obligations such as establishing a maintenance plan, having their financial statements audited every year and every five years, obtaining a valuation of all buildings it is required to insure.
Levels of Owners Corporations
An owners corporation operates at four levels:
- The owners corporation, consisting of all the lot owners.
- The committee, consisting of elected lot owners or their proxies.
- A delegate of the owners corporation, for example, a manager, chairperson, secretary, lot owner or employee.
- A delegate of the committee. The committee may delegate to a lot owner, a manager or subdelegate to a member of the committee.
All owners corporations, committees and delegates must act honestly and in good faith. They must exercise due care and diligence in carrying out their functions, powers and activities.
Obligations of Owners Corporations
An owners corporation must:
- manage and administer the common property
- repair and maintain the common property, fixtures and services
- take out and maintain required insurance
- raise fees from the lot owners to meet financial obligations
- prepare financial statements and keep financial records
- provide owners corporation certificates when requested
- keep an owners corporation register
- establish a grievance procedure
- carry out any functions and duties under the Owners Corporations Act 2006, the Owners Corporations Regulations 2007, the owners corporation rules and any other law or regulation
- ensure compliance with Owners Corporations Act 2006, the Owners Corporations Regulations and rules.
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Levies & Fees
When you buy a strata community, you share with the other lot owners access to utilities and common areas of the building such as driveways, gardens, laundries, gymnasiums, pools, foyers, hallways, recreation rooms and so on. As shared owners of these common property amenities, lot owners are collectively responsible for their management, maintenance and repair. They must also pay their portion of utility costs.
Read more on levies and how and why they are collected >>>