Don't know what body corporate is? We're here to help. Whether you're a homeowner or investor, understanding what a body corporate is and what it does is important. Let's discuss the basics!
What is a Body Corporate and what does it do?
While the official definition can vary depending on your location, the role of an Australian body corporate is to maintain the common property on behalf of owners. A body corporate generally applies to a building or land that is subdivided with 2 or more lots, such as a duplex, townhouse, or apartment building. Property such as commercial, industrial, and retail, will normally have a Body Corporate as well.
The owners of the individual titles make up the body corporate, and have a say in what happens to common property facilities and maintenance, including but not limited to:
Gardens,
BBQ facilities,
Roads,
Swimming pools,
Cleaning,
Damaged common property
As well as essential amenities that connect to more than one dwelling such as:
Sewage,
Wires,
Gutters,
Water.
Body Corporate Fees
Body Corporate fees are usually paid quarterly or annually by the owner, and can vary based on the size of the property, type of property (residential, commercial, etc), property location, property facilities, and property condition. In some instances, the fees paid by each occupier can vary based on their share of the property, for example, a 4-bedroom penthouse owner may pay a higher body corporate fee than a studio apartment owner in the same building.
A good Body Corporate will generally have a reserve fund (AKA a sinking fund or capital works fund), whose main purpose is for emergencies and extenuating circumstances. If the funds are not used, they should be saved so the owners and committee are better prepared if an emergency arises in the future.
Is it worth buying a property with a Body Corporate?
The age-old question, is purchasing a property with a Body Corporate worth it? There are a few factors to consider here:
Pros:
Facility maintenance costs are shared
Maintenance is usually organised by the Body Corporate
Typically, smaller properties are initially more cost effective
Some insurances could be easier to calculate
Residents have easy access to pools, gyms, BBQs, etc
Cons:
The properties are smaller (units, duplexes, townhouses)
Restrictions on renovations
Body Corporate approval is usually required if residents want a pet
Properties could be more costly in the long run due to continuous Body Corporate fees
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