frequently asked questions
Body Corporate Introduction
The body corporate’s sole purpose is to manage and operate the development for which it was created.
A body corporate has the following legal obligations:
- Maintenance
- Insurance
- Taxation
- Financial accounting
- Governance and management
- Compliance and reporting
- Record keeping
- Disclosure
This type of scheme is common for duplexes, residential units, high-rise, townhouses, and commercial office parks.
Membership of the body corporate is not optional, and all members have some obligations, like paying levies. Participation in the democratic decision-making process is, however, optional.
The lot is the physical property that is bought and sold, with each lot formally identified by a number for all body corporate matters.
You automatically become a lot owner when you buy into a body corporate development.
They are used to calculate:
- Ownership of the shared property and areas
- Financial responsibility for levies and other costs
- Voting rights
There are two types of lot entitlements – contribution schedule lot entitlements and interest schedule lot entitlements, but the principle for each type is similar.
Contribution schedule lot entitlements are used to determine:
- Administrative and sinking fund levies
- Voting rights
Interest schedule lot entitlements are used to determine:
- Building insurance payments
- Council rates and land taxation
It is registered with the Queensland Land Titles Registry, and can be updated if the body corporate decides to make a change.
The community management statement (CMS) contains:
- The body corporate’s legal name
- What legislation applies to the body corporate
- What lots are included in the body corporate
- The lot entitlements for each lot, and the totals
- The body corporate by-laws
- Any exclusive use areas allocated to the lots
- Any statutory easements over the body corporate scheme land
- Legislation
- By-laws – the internal rules for each body corporate
- Changes to each lot’s external appearance
- Renovations of a lot
- Rules for using the shared recreation areas
- Body corporate supplying services to residents
- Speed limit on the shared driveways
- Opening times of the shared facilities
- What plants can be planted in courtyards
Complying with by-laws is compulsory and they apply equally to owner-occupiers, tenants, and visitors.
If a by-law is unsuitable or unpopular, owners can submit a motion to their body corporate to change it.
Committee
The committee is generally responsible for:
- Making day-to-day decisions to keep the body corporate operating
- Working closely with the body corporate manager and the building manager/caretaker
- Exercising official powers and functions
- Acting in the best interests of owners
- Controlling body corporate funds and spending
If the body corporate fails to elect a committee, then it must appoint a body corporate manager to take over the management.
While committee membership can be daunting at first, our team of experienced strata managers are here to guide and support each body corporate. Our goal is to offset the majority of the administration and financial functions, allowing committee members to focus on the decision-making and approval roles
This means the committee will make decisions that affect themselves as a lot owner and member of the body corporate.
All lot owners are eligible to join the committee if your levy contributions are paid up to date. Each year there is an opportunity to nominate for the committee and be considered for election.
The body corporate manager and the building manager or caretaker are also non-voting committee members. This allows them to perform an advisory and support role, without voting on the decisions.
The committee roles are:
Chairperson
- The chairperson chairs the body corporate meetings, and is a signatory on important documents
- The body corporate manager can carry out the role of running meetings on behalf of the chairperson
Secretary
- The secretary is responsible for issuing and receiving documents, counting votes, and is a signatory.
- The body corporate manager can carry out nearly all of the legal functions of the secretary, for example managing all correspondence and voting.
Treasurer
- The treasurer is responsible for overseeing the body corporate’s financial business
- The body corporate manager can carry out nearly all of the functions of the treasurer, including all banking, levy management, creditor payments etc.
- The treasurer is responsible for checking invoices before they are paid, using an email approval system.
Ordinary committee member
- Ordinary committee members have a vote on committee matters, but they do not have any other special or executive functions.
The body corporate manager:
- Guides and supports the committee
- Prepares all documents and meeting paperwork
- Administers the bank accounts, levies, creditor payments
- Prepares the financial statements
- Coordinates other services, for example taxation, ATO etc
- Deals with lot owner enquiries
The body corporate manager works from their offices and, when required, meets owners and the committee on-site at the property.
Read more about the role of the body corporate manager.
The building manager, often called on-site manager, or caretaker, has a separate contract with the body corporate. They are usually based permanently on-site, or frequently visit your building to carry out their physical duties.
Their role is generally to:
- Maintain the physical common property, for exampling cleaning, gardens, pool, BBQ etc
- Maintain and supervise other service contractors, for example fire equipment, gates, lifts, pumps
- Assist the committee to monitor by-law compliance on-site
- Carry out minor repairs to the common property on-site
The building manager is paid by the body corporate and is accountable to the body corporate committee.
In some cases, the issue or decision requires consultation, investigation, or further research. In these cases, the committee may defer their decision to the next meeting to ensure sufficient time to reach the best outcome.
The committee has very broad decision-making powers, but there are restrictions.
Common restrictions include:
- Decisions that have a significant change to the rights, privileges, or obligations of owners
- Setting levies
- Starting legal proceedings
- Deciding on major applications made by lot owners
- Engaging contractors for longer than 12 months
- Spending above the committee spending limit (the limit differs for each body corporate)
If an issue is a restricted issue for the committee, it must be decided at a general meeting of all lot owners.
Meetings
- Committee meetings
- Decisions made by majority of committee members only
- Owners may attend and observe only
- Voting can be done in person or in writing
- General meetings
- Decisions made by all lot owners
- Voting is invited from all owners, but it is optional
- All lot owners can attend and vote on the motions
- General meeting motions are generally more significant for the body corporate, which is why all owners can participate.
To vote online you must receive your body corporate communication by email. We will automatically invite you to vote electronically whenever it is available for your meeting.
Requesting approval from the body corporate
This is a complex area of body corporate legislation and management, and there is no simple answer. Our BCsystems team are experts in this field and offer individual advice to our clients.
That said, we have some general steps and principles to assist you:
Read your body corporate by-laws carefully
It is important to read the by-laws in full as there may be several by-laws that apply to your request
Read the by-laws very carefully and take note of the language. Some by-laws may:
- Permit you to do something
- Permit you to do something with conditions
- Permit you to do something only after notifying the committee
- Permit you to do something only after receiving approval from the committee (usually with conditions)
- Permit you to do something only after receiving approval from owners at a general meeting (usually with conditions)
- Ban you from doing something.
Do not copy other owners
You must not assume that because another owner in your body corporate has done something, that you can do the same without approval.
The other owner may have complied with strict conditions that are not immediately obvious to you.
The other owner may also be in breach of the by-laws or the legislation, and the committee may be taking enforcement action against that owner for that breach.
It is always better to ask for permission if you are unsure
The committee has a strict legal obligation to enforce the by-laws, even if the committee members do not personally agree with the by-laws. The body corporate also has very strong powers to force owners to comply with the by-laws.
If you take an action without approval (e.g. install an air-conditioner) and it breaches a by-law, you will generally have to remove the air-conditioner and repair the wall to its prior condition. That can be a very expensive mistake.
Ask an expert
If you are unsure whether approval is required, you may:
- Contact BCsystems for a discussion
- Obtain your own legal advice
If your proposal is significant (e.g. a full renovation of a unit), you should reasonably expect to invest some money and time in the approval process. Generally the cost and time of an approval increases with the complexity and significance of what you are proposing.
All applications to the body corporate must be:
- Made in writing
- Very detailed
BCsystems has developed some streamlined online forms to assist owners to make applications, and to provide the information which the committee will most likely require for their consideration.
The approval depends on your application, as well as the by-laws and any restrictions on your committee. Navigating this can be fairly complex.
Low-cost (under $3,000) and low-impact changes can generally be approved by the committee, with some exceptions.
If the approval is not both low-cost and low-impact, it will generally need to wait until the next general meeting to be approved by all owners. This can mean a delay of up to 12 months for approval.
It may be possible to speed up approval processes if you are prepared to pay for the body corporate’s cost to have a special meeting just to consider your application.
For decisions within the committee’s approval range, you can expect an approval in most cases within 8 weeks of making a fully-detailed application.
In some cases you may receive a decision much earlier than 8 weeks, however the law sets out the timeframes for committee decision-making.
The committee does not need to assist you with your application, it can expect you to provide all the relevant information before it starts considering your request.
If you are still unsure, get in touch with us for a discussion.
Body corporate financials & levies
Check out our Complete Guide to Body Corporate Levies
Body corporate contributions (generally called levies) are the payments made by all lot owners towards the operation of the body corporate. They are a cost that all lot owners can expect to pay each year to the body corporate.
The body corporate relies on levies to fund all of its operations.
Read More in our Guide to Body Corporate Budgets and Levies.
The body corporate levies are paid to the body corporate. All body corporate funds are kept in a separate bank account in the name of your body corporate. The funds are under the control of your body corporate committee members (who are also lot owners).
There is a myth that the body corporate manager receives the levies, however that is not the case. Your body corporate manager (BCsystems) does the work on behalf of the committee to issue the invoices and assist with enquiries, but the body corporate levies do not get paid to BCsystems.
Read More in our Guide to Body Corporate Budgets and Levies.
The levies are set each year at the AGM, by a majority vote of all owners.
Setting the levies is relatively simple:
- The committee and BCsystems work together to prepare a budget for the year’s expected operational costs
- The budget takes into account whether last year’s costs were over or under budget
- The budget is then divided by the total number of lot entitlements
- That shows the amount required for the year to pay for the body corporate’s operational costs.
There is no profit margin on levies. If your body corporate manages to come in under budget – the saving is rolled forward to offset next year’s levies.
If your body corporate goes over budget, then the difference must be picked up in next year’s levies.
Read More in our Guide to Body Corporate Budgets and Levies.
When owners pay body corporate levies, they are split into funds. All bodies corporate have an administrative fund and a sinking fund, and some bodies corporate also have other fund types depending on their individual operational needs.
Read More in our Guide to Body Corporate Budgets and Levies.
The administrative fund pays for the annual operating costs of the body corporate. Think of this as the running costs fund. This fund includes things like:
- Paying the building manager/caretaker
- Insurance
- Electricity
- Grounds maintenance
- Water
- Minor repairs and maintenance
- Tax
- Legal costs
- Consultants advice
Read More in our Guide to Body Corporate Budgets and Levies.
The sinking fund is a long-term savings fund. Owners pay into this fund each year so that owners are always contributing to the future cost of repairing the building.
Any capital expenses to repair the common property are paid out of the sinking fund, for example:
- Painting
- Roof replacement
- Pool resurfacing
- Purchasing new BBQ area furniture
Read More in our Guide to body corporate budgets and levies.
Given the complexity of the sinking fund calculations, the sinking fund levies are set by an expert. Every 5 years the body corporate engages a quantity surveyor to inspect the body corporate property and provide an estimate for the capital expenses which are likely to arise in the next 15 years.
That report takes into account the cost of each item (e.g. painting, roofing, new driveway etc), and also estimates the remaining life span of each item. That results in an amount required to save up for each target, and those are aggregated into a single fund target.
The sinking fund forecast report includes the levy amount to raise each year to achieve those capital expense payments and avoid special levies.
Read More in our Guide to Body Corporate Budgets and Levies.
The body corporate can spend money out of either fund when that spending has been approved by either the committee, or by all owners at a general meeting.
Read More in our Guide to Body Corporate Budgets and Levies.
Special levies are contributions that owners need to pay on top of their normal levies. Special levies may be required if some unexpected event occurs and spending is required that is not in the budget.
For example if the body corporate has a defect which was not foreseen and must be repaired, a special levy may be required to fund that work.
Special levies can be used in conjunction with body corporate loans to allow the body corporate to pay for expensive work which cannot be covered using its normal funds.
Read More in our Guide to Body Corporate Budgets and Levies.
Each year your body corporate must decide at the AGM whether to audit the financial records for that year. If your body corporate decides to audit the financial statements, you will receive an audit report at the end of that year.
The audit report establishes that the financial statements that are prepared by BCsystems give an accurate representation of the financial affairs of the body corporate.
Paying your levies
Check out our Complete Guide to Body Corporate Levies
The body corporate will issue a levy notice invoice to each lot owner, at least 30 days before the due date.
The payment details are shown on each levy notice.
Yes – levies can be paid in a number of different ways. Lot owners can also set up a direct debit arrangement directly with the body corporate to avoid missing payments.
The body corporate must recover all levies. If an owner fails to pay a levy notice invoice on-time, the body corporate will issue reminder invoices and penalty notices to the lot owner, and the costs to recover that levy are also added to the owner’s debt.
If the body corporate is unable to recover the levy debt directly, the body corporate must engage a solicitor and commence court proceedings to recover the debt.
The body corporate is not able to write-off, forgive or credit owner levies. Because levies directly pay for the body corporate’s costs, if the committee forgave a levy invoice for one owner, that would increase the levies for all other owners.
Yes. Login to our BCsystems owner login to view your levy account balance at any time, and access other records and documents for your body corporate.
Insurance
- The common property
- Lots which share a common wall
- Public liability on the common property
BCsystems is not the insurance company, but we do have an expert Insurance Manager who is dedicated to helping our clients obtain and understand that insurance, in addition to assisting with claims.
At each annual general meeting (AGM) the body corporate will put a motion to all lot owners detailing the insurance policies held by the body corporate. The body corporate is not responsible for owners’ personal property or liability insurances.
The cover under each policy will depend on the body corporate, the insurer providing the cover, and the specific inclusions and exclusions on each policy.
That said, the body corporate property insurance generally covers the following elements:
- The building structure (walls, doors, ceilings, windows, structural elements)
- Elevators
- Pergolas
- Doors
- Gates
- Fences
- Toilets
- Escalators
- Out-buildings
- Built-in cupboards, wardrobes etc
- Satellite dishes
- Signs
- Windows
- Awnings
- Sinks
- Swimming pools
- Balcony railings,
- Kitchen cabinetry
- Bathroom cabinetry
- Ovens & cooktops
- Shower screens
- Tiling
The following items are generally excluded from body corporate building insurance, and should be insured separately by each lot owner:
- Public liability inside the lot
- Carpet & carpet underlay
- Curtains & blinds
- Air-conditioners
- Contents items (e.g. furniture, clothing)
- Dishwashers
- Floating floors (e.g. vinyl plank)
- Domestic appliances
- Temporary walls
- Decorative finishes
- Hot water system
- Ceiling coverings
- Loss of rent – tenant default
Owners may lodge an insurance claim under the body corporate insurance policy if the claim is eligible.
Tips to speed up the insurance claim process
- Obtain clear quotes to fix any damage and provide those with the claim form
- Report any crime (including malicious damage) to the Queensland Police Service as soon as possible and obtain a report number
- Take clear photos of any damage and include the surrounding area
- If a person is responsible for the damage, obtain their contact information and submit this with your claim. If possible, photograph their identification.
If a vehicle is involved, record the registration number, make, model, year, body shape and colour.
Property damage claims need to have an establish cause.
For example:
- Water damaged kitchen cabinets caused by a burst pipe
- Floor and wall damage caused by a leaking shower
- Ceiling damage caused by a leaking roof
- Building damage from a fallen tree caused by wind
- Fire caused by a lightning strike
Before considering your insurance claim, the insurer will ask for proof that whatever caused the damage has been fixed. The insurer will not even consider fixing your ceiling if the roof leak has not been fixed, otherwise the ceiling will just become damaged again very soon.
In most cases the insurer will only consider paying a claim relating to the damage resulting from the cause.
If the cause of the issue was a maintenance failure (e.g. a leaking roof because of worn out silicon joints), the owner generally must fix the roof at their own expense, and then the insurer may consider the damage that resulted to the ceiling, internal walls etc.
Keep this in mind when submitting an insurance claim – you must demonstrate that the cause has been addressed and it will not likely re-occur.
For damage to a lot, the lot owner must arrange repair quotations and contracts. This is the case even if the body corporate insurer will make a financial contribution to that claim.
For damage to the common property or common areas, the committee or building manager/caretaker must arrange the repair quotations.
BCsystems recommends owners obtain their own insurance advice, and consider taking out the following policies:
- Contents insurance
- Public liability within the lot
- Landlord insurance (for tenanted properties)
Maintenance
The survey plan identifies the lots and the common property within the community titles scheme.
There are two main formats under which lots can be created.
Remember that the lot is the piece of property that is owned by each owner within the scheme.
A building format plan creates lots with reference to the physical building elements.
In this plan type the edges of the lot are usually the external walls of the unit or townhouse.
A standard format plan creates the lots as a piece of land, and then that land can have a building on it.
This type of plan can usually only exist in townhouse or gated community developments.
Generally owners are responsible for all maintenance inside their lot.
Generally the body corporate is responsible for:
- Maintenance of the common property
- Maintenance of any boundary structures in a building format plan. A boundary structure is the building element (e.g. wall or floor) that separates one lot from another lot.
Generally fencing follows logical rules:
- A fence between two lot courtyards is a shared cost between those two lot owners
- A fence between a lot and the common property is a shared cost between the lot owner and the body corporate
- The main perimeter fence around the whole complex is a body corporate responsibility
If you are unsure about the responsibility for fencing you can provide our team with a diagram showing the location of the fence (and who is on the other side of the fence) and we can assist you.
The body corporate is responsible for pest control on the common property (shared areas).
Lot owners are responsible for pest control within their own lot.
Your information and communication options
Owners must provide to the body corporate:
- Settlement date of purchase
- Full legal name
- Residential address
- Postal address (if different)
- Email address
- Phone number
- If rented – property manager’s details
- If rented – tenant’s details
- If a company owner – details of a company nominee
Remember that the lot is the piece of property that is owned by each owner within the scheme.
Owners can update their contact information on the body corporate records by using our contact details form.
Yes, all communication can be done electronically.
You can opt-in to receive communication electronically by using our forms.
Switching to digital allows you to take advantage of the following benefits:
- Lower cost to your body corporate
- Better for the environment
- Faster
- More reliable than post
- Multiple email addresses supported
Buying & selling
It is very important when buying into a body corporate to do your research and be informed.
The following is our advice to make sure you make a properly informed decision:
Do your own independent research about the body corporate you are considering buying into.
- Talk to other residents, the on-site manager/caretaker.
- If it is your first body corporate purchase, read the rest of our FAQ page to get an idea of what is involved.
Engage an experienced solicitor
- An experienced solicitor can help you to navigate the complexities of buying into a body corporate.
Carry out a body corporate records inspection
- Prospective purchasers in a body corporate are eligible to attend the body corporate manager’s office and read and take copies of body corporate records.
- This can be a daunting task unless you know what you are looking for. You can engage a body corporate records search agent to carry out this inspection on your behalf and to give you a written report with advice about the records.
- Be careful – a buyer of a lot in a body corporate inherits the lot and any obligations that come with that lot. If there are alterations to the lot which are not approved, the buyer may be required to later remove those alterations at their own cost.
Check the levies
- A buyer of a lot in a body corporate inherits the levy balance of the former owner.
- It is important to deal with any financial adjustment in your property settlement.
Notify the body corporate after your settlement
- It is the buyer’s obligation to notify the body corporate that they have bought into the scheme and become a member of the body corporate.
Rectify any by-law breaches
If your lot has any existing by-law breaches, or non-approved alterations, those may deter possible buyers.
Make an accurate disclosure in your contract
It is the seller’s obligation to complete the disclosure statement that is included in property sale contracts. It is not the body corporate’s obligation to warn buyers about any defects or liabilities. An inaccurate or incomplete disclosure by the seller may cause future legal trouble for the seller.
A body corporate disclosure statement is a document that the seller of a lot provides to the buyer of a lot.
To assist the seller to complete this disclosure, BCsystems can provide certain information to go into the disclosure statement for a fee. The information for disclosure statement service provided by BCsystems does not offset or mitigate the seller’s legal obligation to make a full and accurate disclosure to the buyer in the contract.
An information certificate is a document which shows the levy statement balance for a lot on a particular date. This document is used by conveyancing solicitors to adjust and apportion the levies between buyer and seller.
The body corporate is not responsible for adjusting levies, that is up to the buyer and seller directly. Both the buyer and seller must satisfy themselves that their conveyancing solicitors have made appropriate adjustments to the financial settlement to take into account the body corporate levies.
It is the responsibility of the buyer or the buyer’s solicitor to notify the body corporate that they are the new owner of that lot. Until that notification occurs, the former owner will continue to receive levies and all other correspondence.
If you have recently sold your lot and continue to receive body corporate information, you should contact your solicitor or conveyancer and ask them to chase up the buyer’s notification to the body corporate.
Just like if you buy a normal house, you become responsible for that property, including any defects, maintenance and repair costs, and legal liabilities.
If the former owner had made any improvements to the lot (e.g. installed air-conditioning) and conditions applied to that approval, you inherit both the benefit and liability for those restrictions.
Decisions which applied to the former owner carry forward to your period of ownership – so it is important to understand what you are buying.
Body corporate records are available to be inspected by:
- Lot owners or their authorised persons
- Prospective purchasers or their authorised persons
Request to inspect the body corporate records
If you engage a professional body corporate records inspector, they will arrange their own search appointment as a part of their service provision to you.
Invoice Approval
Invoice approval is crucial for your body corporate to ensure proper financial management. It helps verify that services have been completed, facilitates accurate accounting, and minimizes the risk of fraud or inappropriate payments.
The caretaker or on-site manager (if you have one) should sign off on each outgoing invoice payment to confirm the completion of the work.
BCsystems performs the following tasks:
- General invoice compliance checks, including recipient details, ABN, tax status, and contractor name.
- Accurate calculation of invoice amounts, especially for handwritten or typed invoices.
- Verification of the GST status for proper accounting of GST obligations.
- Checking contractor bank details for consistency and minimizing fraud risks.
- Data entry of invoices into body corporate financial statements using the appropriate budget code.
- Preparing approved invoices for bank payment and uploading them for approval.
If you have a caretaker or on-site manager, their responsibilities include:
- Checking that the amount of the invoice matches the quote (if it was a quoted job)
- Checking that the amount is accurate otherwise
- Checking that the work has actually been completed and to the correct standard, before approving the invoice for payment
Committees have the following responsibilities:
- Acting as a final check on invoices, to have an understanding of the money being paid out by the body corporate’s account;
- Working with the caretaker/on-site manager (if any) to ensure that the work is done
If your body corporate is small, or does not have a caretaker or on-site manager, the committee can act as the sole approver.
BCsystems offers an invoice approval hub, at no additional cost to set-up or to use. This system is accessed via the existing login to the BCsystems Owner Login portal.
The system is simple to use, and sends an email notification to each approver whenever there is an invoice ready to view and approve.
Our team also provides a simple guide, and support by phone or email if needed.
Our advice is that:
- The committee treasurer is a logical choice to review and approve invoices
- If the treasurer does not live on-site, then a fellow committee member who lives on-site may be a better choice
This is a question for the committee to decide. It is not an elected position, and we support any member of the committee taking this duty.
Yes – We support having more than one committee member acting as the approver, and there are two configuration.
Either may approve
- Notification is given to both members
- Whoever gets in first can approve the invoice
Both must approve
- Member 1 is notified for approval
- After member 1 approves, member 2 is notified and must also approve before payment
Note – This may cause invoices to be paid more slowly, as more approvers are required to take action before the payment is made.
Yes – invoices for insurance premiums are paid automatically, to ensure that the body corporate does not accidentally become uninsured if the caretaker or committee member is slow to approve the invoice. This is a crucial payment which is made based on the committee’s renewal decision, and not based on the invoice approval hub.
Some other costs are also paid without going through the invoice approval hub – this is limited to only some specific types of invoices, which are either not practical or possible to provide to the committee prior to payment, and generally include:
- The remuneration to your caretaker or on-site manager due under your contract with them
- Electricity or water invoices
- Statutory payments to the Australian Taxation Office (ATO)
- Payments for your contract with BCsystems
- Reimbursement to owners for accidental overpayment of levies.
