Essential things to know about administration of a Body Corporate

Apartment Specialists Podcast No: 113

Summary:

In this podcast, Andrew Murray will discuss the administration of body corporate. What are the responsibilities of the companies that run them? He will also share his insights on why an owner's committee often employs a company to administer the body corporate. All these and more from this video.

TRANSCRIPTION:

Running of a body corporate or what's often called the administration of the body corporate. As an owner of an apartment, you automatically become part of body corporate. The body corporate then employs a company to run the administration of the body corporate. Basically, they do everything the owners decide or the owner's committee with the chairman decide on  what's best for the complex or building or the apartments, then put that into action. This is where you hear about your Body Corporate Admin, your Crockers, your Strata and your First Street; those kinds of things. As you are looking at apartments, or looking for apartments, you will come across more of these different types of companies.

In basic terms, if you put it in a sentence, they are in charge of taking care of the administrative functions on behalf on the body corporate, the chairperson and the owner's committee. Okay, I'm just going to talk about some of the key responsibilities.

They maintain a register of owners.  That means you have got all those little details on file so you can be contacted. Because you often have many of the owners live in different apartment complex. This is very important as well as is distributing information about what's happening in the building. Taking the minutes at each general meeting, so annual general meeting which happens every 12 months or 15 months by law.

Keeping financial accounts. That's where your balance sheets come in and all that kind of thing. This is where owners can look at their body corporate and see how healthy they are. If they have got enough money in the to pay for X, Y, Z expenses and it's going to happen next year, or things like that.

Now, it is the same thing on committee reports to owners. These reports on what's happening in the building, what decisions have been made, and all that kind of thing. Also, for appearing and sending out resolutions for agreement by mail and notifying unit owners or partners of results. This is when decisions are made and you may have a decision that needs to be made that is, "Okay, should we make this decision on this term of action when it comes to repairing something."

They may decide for some reason to go to postal vote, so they get sent out to all the owners. Big information, I vote. This will give option A, B, and C, I vote C, send it back and things like that. They are also in charge of,  basically the original insurance evaluations, quotations, basing insurance in the system claims of apartment owners or complexes as a whole. This is very important because insurance is probably the biggest ticket item. I mean, it's the biggest expense of the body corporate and of all the owners. So, that's insurance for, required for fire, and all things like that.

They also need to tend to the, basically, general correspondence or communication with owners. Often, owners will deal with body corporate when they are selling. Obviously, when someone's buying and becoming a new owner. General queries or questions they may have or any complaints if there are any, things like that. And also are expected to give general advice, expert advice to the committee and to the owners on the management, on how to manage a body corporate, which is down to things like maintenance plan, what's called your LTMP and how to best address that.

What a body corporate does is, they are again in charge of the administration of the body corporate, which is doing all the bidding. I suppose, of all the owners, and they will charge a fee for that. And generally it's a fee per unit. It ranges across the board from around about $150 to around $300 per unit. But that all changes because every complex is different, every demographic of complex is different, depending if it's a lease on building or a rent on building, that kind of thing.

I won't go into too much depth there, but hopefully it helps you understand firstly, because i.e. as an owner, you are the body corporate. What are these companies involved, we see these logos on the minutes and to just hit home that these companies aren't your body corporate. The owners are and these companies do what the owners tell them and maintain and provide all the services. I just mentioned this. I hope that really helps you understand a little bit more about departments, unit and body corporate. I will talk next about as an owner and what's expected from you?

Okay, thank you. Cheers!