If you are thinking of purchasing into a Unit Titled development, for example buying an apartment that has a unit title, you may have some questions you need answered.

What is a Body Corporate?

A Body Corporate is made up of the owners for the time being of all the units. The Body Corporate is created on the deposit of the unit plan for the particular development. Often the Body Corporate is initially the developer and then as units are sold the new unit owners become members. The early period when there are very few units sold can be a very difficult time when responsibilities and obligations can be misunderstood, and when the interests of the developer and the new owners can be in conflict.

There are a number of things that a Body Corporate is required to do in relation to the units. These include:

  • Insuring buildings against damage.
  • Keeping the common property in a good state of repair. Lifts and entranceways are examples of common property.
  • Establishing and maintaining a fund for administrative expenses.
  • Determine the amount necessary to undertake the Body Corporate duties and levying the unit owners to raise this amount.

If there are up to three unit owners, the powers and duties of the Body Corporate will be exercised by them. Where there are three or more three unit owners, the powers and duties of the Body Corporate are exercised by a Body Corporate committee.

What role does a Body Corporate play if I am purchasing property?

The Body Corporate is required to issue a Section 36 certificate which shows, among other things,all amounts leviedby the Body Corporate on a unit owner, whether that amount has been paid by the owner and any further amounts recoverable by the Body Corporate under the Act.

Another reason this certificate is important is because it shows whether the Body Corporate has entered into a contract to undertake repairs under which the owner would be liable for payment.

It is essential that a vendor obtain a Section 36 certificate from the Body Corporate before settlement and give it to the purchaser. Lending institutions also often require that lenders give them a copy of a Section 36 certificate to satisfy their requirements.

You may also wish to obtain information from the Body Corporate regarding the administration and management of the development. For example, you could obtain copies of recent Body Corporate Committee minutes to enable you to see how the development is being run. Similarly, a Body Corporate is required to provide owners with accounts. Such accounts will indicate how the Body Corporate is being run and you may wish to ask the vendor for copies of these.

[Note: the Unit Titles Act 1972 will be replaced with the Unit Titles Act 2010 once the new regulations to go alongside that Act are drafted.]