A Guide to Strata and Body Corporate Management As a Building Resident in South Australia or Victoria

Body corporates can be confusing if you’re not sure of how they work, the differing roles and responsibilities within them, or how you can get involved. When part of a strata title, it’s crucial to understand what your body corporate does and how the committee and strata manager should be maintaining and managing your building.

What is a body corporate?

A body corporate, also known as the owners corporation or strata corporation, is bound by laws and regulations to effectively manage and maintain the common areas of a residential, commercial, industrial or mixed-use property development. If you own a property that is part of a strata title, you are automatically part of the body corporate.

Common areas include areas such as car parks, entrances and lobbies, gardens, lifts and any recreational facilities. The common areas will be stated on the plans of subdivision.

The committee must also deal with any issues that arise between lot owners, for example, noise complaints and general behaviour. The great thing about being part of a strata scheme is that there are other people who will handle the finances and the general upkeep and maintenance of the building – the owners corporation.

What’s imperative to understand is that owners corporations need to abide by certain rules and regulations. However, these will differ from state to state.

Regardless of the legal element, there are some standards that can be expected under strata management. It’s acceptable to expect that a maintenance plan and fund are in place. And it’s completely acceptable to expect that the common areas will be well maintained and that any necessary repairs are completed.

Looking at the legalities in Victoria

In Victoria, owners corporations are governed by the Owners Corporations Act 2006 and the Owners Corporations Regulations 2007. These laws clearly spell out the functions and duties of the owners corporation.

There are certain responsibilities of an owners corporation:

• Manage and maintain the common property, including any repairs or services
• Take out and maintain insurances for the building
• Meet all financial obligations – fees from the lot owners need to be managed to ensure this is possible
• Prepare financial statements and keep financial records
• Keep an owners corporation register
• Establish a grievance procedure

Of course, depending on the type of strata title you are part of, there may be some exemptions. For example, special rules apply to two-lot subdivisions, owners corporations that have more than 100 lots or collect more than $200,000 in annual fees, and multiple owners corporations.

In terms of the roles and operation of an owners corporation, there are four different levels:

1. The owners corporation – this consists of any person who legally owns a lot
2. The committee – elected lot owners
3. A delegate of the owners corporation
4. A delegate of the committee

The main difference between the owners corporation and the committee is that the committee can make decisions delegated by the owners corporation, with the exception of any decisions that must be decided at a general meeting. The committee is usually designated with decisions regarding maintenance and repairs, as well as obtaining quotes and figures for general upkeep.

Within the committee, certain roles must be appointed, the most important of which is a chairperson, whose main role is to run the meetings effectively. This person will also be the chairperson of the owners corporation. A secretary must also be appointed. This person will manage correspondence and organise any meetings required.

Looking at the legalities in South Australia

In South Australia, strata corporations are governed by the Strata Titles Act 1988 and the Community Titles Act 1996.  According to the Strata Titles Act 1988, the strata corporation’s role is to administer and maintain the common property for the benefit of all unit holders, to administer all other property of the corporation, and to enforce the articles of the strata corporation.

The strata corporation has many responsibilities, including:

• Maintaining bank accounts and investing surplus funds
• Levying maintenance
• Entering into any type of contract necessary
• Enforcing maintenance or repairs and carrying them out for common property. If repairs are necessary by a unit holder, the strata corporation can impose the duty upon the unit owner.
• Organising all building insurances

The strata corporation must also have a presiding officer, a secretary and a treasurer, all of whom must be appointed at a general meeting. One thing to note is that one person may hold multiple positions.

The secretary’s duties include:

• Preparing and distributing meeting minutes
• Supplying any notices required to members of the corporation
• Answering all communications directed to the corporation
• Convening meetings of the management committee
• Dealing with administrative and secretarial matters

The treasurer’s duties include:

• Dealing with monetary contributions from unit holders and notifying them of any increases or additional levies that need to be raised
• Handling all money paid to the corporation
• Keeping accounting records and preparing financial statements

Corporation meetings

Whether you’re in Victoria or South Australia, the body corporate must hold at least one meeting a year – this is generally called the Annual General Meeting (AGM). During this meeting, owners are given the opportunity to discuss any issues relating to the property. It is also during this meeting that committee officers are elected.

In both Victoria and South Australia, AGMs must occur at least once every calendar year and within 15 months of each other.

Topics that are usually covered in the AGM include:

• Income and expenditure of the corporation during the financial year
• Assets and liabilities of the corporation
• Maintenance works and, if required, a maintenance plan for the coming year
• A committee report
• Any complaints or any emerging issues
• Any by-laws that need to be introduced

For the committee, it’s crucial to come prepared. During the AGM, issues can arise and it can become quite heated between lot owners. Without the necessary preparation, committee members may not be able to effectively handle the discussions.

It’s also imperative that lot owners are given advance notice for the meeting, and minutes from the previous meeting must be provided, as well as any reports that will be raised. It’s also during the meeting where the yearly levies are set.

Notice for the meeting must be in writing and in Victoria, handed or sent to lot owners at least 14 days in advance.The same goes for South Australia.

Many people say it’s crucial to attend the AGM – if you can only attend one meeting a year relating to your property, this one should be it. There are several reasons for this. First, by-laws are generally created and agreed upon during these meetings. Also, any issues that may be brewing in the corporation or between lot owners are usually dealt with at this time. It’s important to be aware of these issues, especially if a situation may occur that involves you down the track. And finally, it gives owners the chance to voice their opinions and concerns. If, as a lot owner, you are unable to attend the meeting, you do have the option to appoint a proxy to attend and vote on your behalf.

Other than the AGM, general meetings can be called if an issue arises. The committee can also choose to hold an executive meeting in certain situations and for certain decisions. For example, deciding on minimal repair works may not require the whole corporation to meet.

There may be times when as a lot owner, you question the way the property is being managed. There are some key clues that allude to whether your strata management needs improvement. For example, one glaringly obvious issue is when a management committee has complete disregard for the by-laws of the property, or when disputes are incorrectly dealt with.

Understanding strata as a building resident

Regardless of whether you live in Victoria or South Australia, and whether you know them as owners corporations or body corporates, the foundation and the job is the same – to maintain the property and the finances to an agreeable and acceptable standard. Remember, a building will require regular maintenance as it ages. There’s nothing worse than looking after your own lot, only to be let down by common areas going into disrepair, and this is where body corporates come in handy. If you aren’t satisfied with the way your building or lot is being looked after,  have a chat to Strata Data today to discuss options for streamlining and improving your strata management solution.