Just bought a lot

Just bought a lot?

Congratulations!  If you are reading this then you may have recently purchased a lot or a unit in a body corporate within the state of Queensland.  Living in a body corporate implies a commitment to participating in a community that is associated through shared property and communal ownership.
Download our free booklet, designed for lot owners who are new to bodies corporate, to give a basic understanding of unit ownership in a residential body corporate.  If today is your settlement day, the body corporate may not be a high priority on your list. You will be able to connect up a phone, internet and electricity to your lot without reference to this booklet. However, we do recommend you have a peek at the insurance pages before you contact your broker.  The introductory section of our booklet is replicated below.  If you appreciate the help you are getting from our free publication, please consider making a small donation to a charitable organisation that we support that also encourages self help, but in the health sector, donate to selfhelpqld.

How do I know I am in a body corporate?

Hopefully, it does not come as a surprise to learn that you own a lot that forms part of a body corporate.  When you signed a contract of sale for your lot, it would have included a disclosure statement that described important information about the body corporate.
The monolithic structure of apartment complexes are a bit of a giveaway that you are part of a common community.  Townhouse environments are less obvious.  Rural allotments with a shared access road are even more subtle.  There are many variations on the form and structure of a body corporate.  In really complex cases, your lot may be part of a body corporate that is in turn a part of a wider body corporate.
If you want to know for sure, have a look at the title document that your conveyancing lawyer will have given you.  If your lot is part of a body corporate, the title document will state the applicable Community Management Statement number.

Who do I need to contact?

One of the finalisation tasks that your conveyancing lawyer does is to send a form (known as a form-8) to the secretary of the body corporate advising the names of the new lot owners, your residential address, a service address (where different to the residential address) and the date of settlement.  Sometimes, the form will also enclose a cheque in favour of the body corporate.  The proceeds of the cheque are applied to your body corporate account that is maintained to track all levies and payments associated with your lot.  The amount will have been agreed between the buying and selling conveyancer and will be listed in the breakdown of the disbursements in the settlement documentation.
Upon receipt of the form-8, the secretary of the body corporate will update the register of rolls to record the new owners of the lot.  Future levies and notices issued by the body corporate will be sent to the service address that was listed in the form-8.  In this technological age, most bodies corporate and most lot owners want to make and receive communications by email and mobile.  It is very likely that you will be contacted by the body corporate to provide additional details.
Many bodies corporate outsource the administration of their body corporate to specialist companies and individuals (known as body corporate managers).  So, although I mentioned the secretary in the previous paragraph, it is more likely that the body corporate manager will be the contact person.
If you are keen to make contact with the body corporate, then the disclosure statement that was attached to the contract of sale will list their contact details.

Who runs the body corporate?

Usually, a body corporate has a committee.  Each year, the body corporate holds an annual general meeting (AGM).  At that meeting, budgets and levies for the financial year of the body corporate are decided.  Additionally, a new committee is elected from nominees who are usually members of the scheme.
The number and functions of committee members can vary depending upon the exact nature of your scheme.  There will be one or more persons with the responsibility of being the treasurer and secretary.  If the scheme has a body corporate manager (BCM) then some of the associated powers for these office bearers are usually delegated to the BCM.

What does the committee do?

The committee is responsible for service contractor selection, scheduling maintenance work, supervising and paying the contractors.  IIn a simple scheme this typically includes: insurance, cleaning services, grounds services, community power, community water, administration services, minor repairs, termite inspections etc.  The committee is responsible for issuing levy notices to lot owners and receipting payments.
The committee is responsible for preparing meeting notices, conducting meetings, recording and distributing minutes.  IEach year, the committee must formulate a budget for consideration at the AGM and include planning and saving for major expenditure for the decade ahead.
The committee is responsible for administering the by-laws of the scheme.

First steps – check in with your body corporate

Make contact with your body corporate and provide updated contact information or any information that they may lack.  Advise them your preferred methods of communication.  Additionally, if you do not already have a copy, ask for a copy of the by-laws to be sent to you.  Read the by-laws and make sure that you take care to abide by the requirements.
Next, ask for an extract of your lot ledger to be sent to you.  This is important because if accounts have not been settled correctly and your lot ledger is in arrears, penalties may start to accrue against your lot without your awareness.
After settlement, you should expect that the current state of your lot ledger is a zero balance or possibly prepaid in advance until the next levy falls due.  If this is not the case, the settlement cheque may not have been banked by the body corporate or some other anomaly has occurred.  Make sure the issue is resolved, the responsibility is for you to sort out (not the committee).  You could reasonably expect that the conveyancing solicitor has the responsibility to chase it down.
Each lot has a lot ledger which can be thought of as an internal bank account that exists between the body corporate and the lot.  The lot ledger is not impacted by lot ownership.  Lot ownership enables the body corporate to know who is financially responsible for the lot and therefore where to send levies and from whom to expect payment.  Transfer of lot ownership does not change the transaction entries or the outstanding balance of the lot ledger.  It simply changes the financial responsibility for the lot ledger.
The lot ledger records the contribution instalments (levies) as they fall due for each lot and records any payments received that offset those levies.  However, other transaction entries may also appear in the lot ledger.  These include: penalties for late payment, discounts for early payments, debt recovery expenses, interest remission, lot expense, are all possibilities.

What are my obligations?

As a lot owner and body corporate member you have obligations: Maintain your lot in good condition.  Do not cause a nuisance or hazard for other lot occupiers.  Read the by-laws of the body corporate and respect the by-laws.  Pay levies on time.  Advise the secretary when contact details change.  If there are tenants leasing your lot, a lot owner also has an obligation to inform the body corporate and to provide the tenants with a copy of the by-laws.  Participate in any fire drill if you are an owner occupier.  Attend the AGM and any extraordinary general meetings (EGMs).  Consider being on the committee.

Tracsafe can help

Looking for body corporate administration the way you want it?