If you own or are buying a unit, townhouse or other property in a community titles scheme, you will usually become part of a body corporate. The body corporate manages shared property, makes decisions for the scheme and collects contributions from owners.
This guide explains what a body corporate is, what it does, how it is managed and what your responsibilities are as an owner.
What is a body corporate in Queensland?
A body corporate is a legal entity created when land is subdivided and registered under the Land Title Act 1994 to establish a community titles scheme. The body corporate is created when the scheme is established. The owners of all lots automatically become members when they buy their lots.
Community titles schemes allow you to privately own your lot while sharing common property and facilities with other owners and occupiers. Common property may include driveways, gardens, lifts, car parks and pools. A scheme is made up of 2 or more lots.
Community titles schemes are also commonly called strata schemes. They can include:
- duplexes
- unit blocks
- townhouse complexes
- high-rise buildings
- shopping complexes
- business parks.
The body corporate is different from the committee and the body corporate manager. It includes all lot owners as members. The committee and manager help the body corporate carry out its functions.
What does a body corporate do?
The body corporate administers the common property and body corporate assets for the benefit of all owners. It also performs functions required by Queensland body corporate legislation.
Its responsibilities generally include:
- maintaining, managing and controlling common property
- deciding the contributions owners must pay so the body corporate can operate
- making and enforcing community rules called by-laws
- arranging public risk insurance over common property and building insurance where required
- managing and controlling body corporate assets
- keeping records such as meeting minutes, owner details, financial accounts and registers.
The body corporate makes decisions through general meetings and the committee.
Maintenance responsibilities can depend on the type of plan of subdivision and the regulation module applying to your scheme. The body corporate must maintain common property in good and structurally sound condition. An owner must maintain their lot in good condition.
If you are unsure who is responsible for a repair, check your survey plan and community management statement. You can also read our body corporate maintenance factsheet.
How is a body corporate managed?
The body corporate makes decisions for the scheme through general meetings and the committee. General meetings give owners the opportunity to vote on matters that require a decision by the body corporate. The committee manages many of the scheme’s administrative and day-to-day matters.
The decision-making process depends on the legislation and regulation module applying to your scheme. Queensland schemes may operate under different regulation modules, including the Standard Module, Accommodation Module, Commercial Module, Small Schemes Module or Specified Two-lot Schemes Module. The structure and powers of a committee are not identical across every module.
The community management statement identifies the regulation module for the scheme. It also contains important information such as the by-laws and contribution schedule.
What does the body corporate committee do?
The committee consists of elected representatives of owners or people acting for them. For schemes covered by the relevant modules, the committee is elected at each annual general meeting. The committee structure varies. For example, a Small Schemes Module committee has a maximum of 2 members, while a scheme under the Specified Two-lot Schemes Module does not have a committee.
The committee is responsible for:
- the administrative and day-to-day running of the body corporate
- making decisions on behalf of the body corporate within its authority
- putting lawful body corporate decisions into place.
A committee can make decisions at a committee meeting or by voting outside a meeting. A body corporate manager may be authorised to exercise some or all of the committee’s powers.
The committee cannot decide every matter. For example, restrictions apply to decisions about changing levies, changing owners’ rights or obligations, and matters that must be decided by a general meeting. Spending must also be within the committee’s authority and the available budget.
How are body corporate levies used?
Every lot owner contributes to the body corporate’s expenses. The body corporate prepares budgets and levies owners for the money needed to meet those expenses.
The two main types of contributions are:
- Administrative fund contributions – These cover day-to-day expenses such as cleaning, gardening, insurance, routine maintenance, repairs and management costs.
- Sinking fund contributions – These help pay for future capital expenses, such as painting the building or replacing roofing and common property carpeting.
Annual levies are decided at the annual general meeting. The body corporate agrees on administrative and sinking fund budgets, works out the amount each lot must pay and decides the number and timing of instalments.
The amount payable is generally based on the contribution schedule lot entitlements recorded in the community management statement. Building insurance for owners in a building format plan is an exception and is based on interest schedule lot entitlements.
A body corporate can also collect a special contribution for unexpected costs or expenses that were not fully covered by the budget.
For more information, read our guide to understanding your body corporate levies.
Do I have to be part of a body corporate?
Yes. If you buy a lot in a community titles scheme, you automatically become a member of the body corporate. Membership follows ownership of the lot, so you cannot choose to opt out while you own it.
Membership may give you voting rights on matters that require a vote, subject to the voting rules, entitlements and restrictions applying to your scheme. It also means you share the financial responsibilities of maintaining the scheme and funding the body corporate’s functions.
As an owner, you should keep your contact details up to date, read meeting notices and contribute levies by their due dates. These steps help the body corporate make decisions and pay for shared obligations.
When does a body corporate need a manager?
A body corporate is not legally required to appoint a body corporate manager. Each scheme can decide whether engaging a manager would assist with administration and compliance.
A manager may assist with tasks such as:
- preparing and sending levy notices
- arranging meetings and distributing notices
- keeping minutes and records
- managing financial administration
- helping the committee carry out authorised functions.
A manager’s powers and duties depend on the written engagement with the body corporate. Where there is a committee, the manager can only do what the body corporate has authorised. Where there is no committee, the manager may be authorised to carry out the committee’s functions and exercise its powers.
A body corporate manager is not automatically responsible for maintaining common property. They may organise maintenance work if the committee asks them to, but the body corporate remains responsible for its maintenance obligations.
You can learn more about the role in our guide to what is a body corporate manager.
A body corporate manages shared property, makes scheme decisions and collects owner contributions to meet its responsibilities. If you have questions about your scheme or your obligations, contact our team at reception@stratacare.com.au.
