What is an Owners Corporation ???

Essentially, an Owners Corporation is a group or body designed to manage, control and administer all aspects of the area known as Common Property in a subdivided allotment that is usually part of a block of flats, units, shops or factories.

Examples of Common Property are:

       Externally: driveways, car parks, garden beds, lawn areas, automatic gates, external faces
                            of buildings, roof area, gutters, etc.

       Internally: public corridors, stairways, lifts, underground car parks, etc. ...

Owners Corporation became the new name for Body Corporate from the 31st December 2007.

Together with the name change, emerged the updated Owners Corporation Act 2006 and the Owners Corporation Regulations 2007.

Australia is experiencing a tremendous amount of building development. Simply look around your own neighbourhood to discover properties surrounding you being subdivided and constructed into multi unit developments - at an incredible rate.

These multi unit developments, whether they be factories, shops, residential units or multi-story apartments, generally contain areas that all owners and occupiers share. These areas are known as Common Property.

It is the shared use of the Common Property that motivates the need to have a managing body known as an Owners Corporation.

An Owners Corporation is simply the name of the body which is incorporated into multi unit developments (commercial and residential) which, through its appointed Owners Corporation Manager, overseas the management of the Common Property.

Owners Corporations
                   - Governing Legislation & Regulations (as at 1st January 2010):

Legislation:              Subdivision Act 1988
                                                 Owners Corporations Act 2006

Regulations:             Subdivision (Procedures) Regulations 2000
                                                 Subdivision Regulations 2001
                                                 Owners Corporations Regulations 2007

Plan of Subdivision

An Owners Corporation is automatically created when a developer or builder submits plans to subdivide a block of land with the view of building an apartment block, set of factories, shops or residential units. Upon approval, this plan is registered as a subdivision at the Land Registry. Below is an example of what a Plan of Subdivision looks like. The area coloured green outlines each Lot (in this case there are 4 Lots). The area coloured yellow indicates the Common Property:





The next essential page of a Plan of Subdivision is the Body Corporate Schedule page which states the Lot Entitlement and the Lot Liability. The diagram below is an example of this page which establishes the proportion of accountability for the Common Property - per Lot.





This information is generally used to calculate the proportion of Owners Corporation fees payable by each Lot Owner (i.e. Member).

Who is a Member of an Owners Corporation ??

When a property is purchased that is part of a subdivision (i.e. a flat, factory, shop or residential unit), the purchaser automatically becomes a Member of that Owners Corporation and hence, a joint owner of the Common Property, proportional to the lot entitlement and liability.

Annual General Meetings

Owners Corporations have been designed to provide an avenue for Lot Owners of multi unit developments to have their say.

Under the Legislation the Lot Owners are also known as Members.

The main avenue of communication between the Lot Owners and the Owners Corporation Manager is achieved through meetings. The annual compulsory meeting for Owners Corporations is known as an “Annual General Meeting”.

Of course, more frequent meetings can be held.

At these meetings decisions can be made through discussion and majority vote.

It is mandatory that one attendee is designated to write down all that is discussed so that even the Lot Owners who are unable to attend the meeting know exactly what was discussed and the decisions that were reached.

This document is known as the “Minutes of Meeting”.

Financials

Generally, the main requirements of these meetings are to reach decisions regarding funding and budgeting.

Decisions need to be made to ensure that there is enough money collected from all Lot Owners of the Owners Corporation to cover essential costs such as insurance for buildings and the Common Property, day-to-day maintenance and cleaning of the Common Property, electricity and service bills for the Common Property, security services, planning for the future, and so on …

In addition, at the end of each financial year relating to the Owners Corporation, the Lot Owners are provided with a report to account for the expenditure for the period including details of all monies received and any monies which remain outstanding.