I am often asked questions about what is a Body Corporate and what are we paying for when paying body corporate fees each quarter or annually. Do we have to pay them?
The simple answer is Yes. It is always best to know something about Body corporates before looking at buying into a strata-titled unit or townhouse complex. Knowledge is so important.
The body corporate is the governing body of a unit block and consists of the owners or their representatives.
When you buy a flat, unit or townhouse under strata title you are also purchasing rights to use common areas of the building and land. Along with these rights, come responsibilities and associated liabilities.
Fees levied by the body corporate are placed into a fund and used to carry out repairs and maintenance of common areas which include gardens, walkways, swimming pool, gym, lifts and carpark.
Body corporate members are responsible for decisions about repairs, maintenance and insurance affecting the whole property, not just for their own home.
With the boom in high rise residential apartments, more and more people have to deal with a body corporate. And as many of these developments feature extensive common areas, the cost of body corporate fees has jumped significantly. In some prestige apartment towers, body corporate fees can exceed $5000 a year. For most owner occupiers and investors, however, annual fees range from a few hundred to a few thousand dollars.
If you are purchasing an investment property, fees payable to the body corporate may be allowable as a full tax deduction each year.
If you own a unit but you do not live in it, remember to inform your tenants of the body corporate rules. You must supply them with a copy of the rules when they move in and any new rules as they are made.
Most state and territory government websites offer extensive information on the laws governing body corporates. Also check out the Law Institute website and the Real Estate Institute in your state. Sate consumer affairs department are another good resource.
