Getting it straight with strata

Date: Mar 02, 2011
Document Type: Newsletter

The rules governing home units are becoming increasingly more complex.

What is a home unit?

A home unit is colloquially known as a “body corporate”, otherwise known as “community titles scheme”.

Often these are considered like a traditional company who have assets, control property, rules to govern the conduct of the members, and open to public scrutiny and litigation.

What must be involved in home units?

A body corporate must have a committee that is responsible for the daily management of the corporate.  They engage trades-people and other contractors to ensure the common property is well-maintained, and supervise the rules (by-laws) of the body corporate.

What is a body corporate?

A body corporate is a group of units or lots which share common property. Types of body corporate are high rise units, low set blocks of units, town houses, duplexes etc.

The members of the body corporate are the owners of lots (not tenants) within the body corporate. When you buy a lot in a body corporate, you automatically become a member of the body corporate.

This entitles you to vote at meetings of the body corporate, and also creates an obligation to pay body corporate levies. The levies are intended to cover all of the costs that the body corporate must pay (such as cleaning contracts, maintenance expenses, and other expenses of a capital nature, such as painting).

What is common property?

Common property are areas such as driveways, lobbies, lifts, stairwells, and other communal facilities. This can include a laundry room. There are exceptions, such as parts of common property (ie car park) that are given to a lot as exclusive use. The rules that govern exclusive use are very important, as they set out how exclusive use can be created, and who is responsible for maintaining exclusive use areas.

Is there unlimited power?

No. Legislation creates rules that limit the amount the committee can spend without authority form all the owners voting in a general meeting.

What are by-laws?

Each body corporate must have a document called a Community Management Statement, which among other things, sets out the rules that apply specifically to that body corporate. These rules are known as "by-laws".

There are generic by-laws contained within legislation which are imposed on a body corporate if they haven’t chosen to adopt their own specific by-laws, such as noise, vehicles, damage to lawns, gardens and common property, rubbish, appearance of lots, and keeping of animals. Other by-laws may be included, such as rules relating to the use of facilities such as pools, rules relating the behaviour of guests, and a by-law allowing costs incurred in rectifying a breach of by-laws to be recovered from the lot owner.

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