Individual ownership, shared responsibilities
When land is divided into individual lots and common property under a body corporate scheme, a body corporate is created. It is made up of all lot owners, with each new owner automatically becoming a member.
The body corporate manages common property and the financial and administrative affairs of the scheme. Its responsibilities can include maintenance, insurance, record keeping, budgets, levies and enforcing valid scheme rules.
Lot owners can participate in general meetings and access body corporate records through the applicable process. They also have obligations, including paying levies, following valid rules and obtaining approval for certain work where required.
Most Queensland bodies corporate are regulated by the Body Corporate and Community Management Act 1997, but different legislation and regulation modules can apply. The documents for the particular scheme should identify the legislation and module governing it.
Levies
Levies are contributions paid by lot owners to meet the body corporate's expenses. The amount and payment schedule are determined through the scheme's budgeting process.
For many schemes, an administrative fund covers regular operating costs such as insurance, maintenance, cleaning and management. A sinking fund is used for capital works and other major expenses. Different arrangements can apply to some schemes, including specified two lot schemes.
Review the current levies, approved budgets, recent financial statements and any proposed increases or additional contributions before committing to a purchase.
The sinking fund
The sinking fund is used for capital works and other major expenses, including major repairs, renewal and replacement of common property.
The current balance should not be considered in isolation. Review it alongside the budget, any available forecast, the condition of the common property and planned expenditure.
If there is not enough money available when major work is required, owners may need to contribute through an additional levy.
Body corporate properties across Noosa vary considerably in their size, facilities, management arrangements and financial commitments. Review the particular scheme rather than relying on the levy amount alone.
Short term accommodation
Short term accommodation can be affected by local planning rules, approvals and other legal requirements.
For most schemes regulated by the Body Corporate and Community Management Act 1997, scheme rules generally cannot prohibit a lawful type of residential use, including short term letting. They may still regulate behaviour, noise, parking and the use of common property.
Before relying on a property for short term accommodation, confirm the planning position, required approvals, scheme legislation and applicable rules.
Disclosure and recordsWhat to review before signing
Before signing, a buyer will generally receive a seller disclosure statement, body corporate certificate and community management statement.
The body corporate certificate can include information about levies, insurance, the applicable regulation module, contractual arrangements, improvements and outstanding amounts associated with the lot.
These documents provide important information, but additional records may reveal recent decisions, maintenance concerns, disputes, proposed expenditure and contracts affecting the scheme.
Ask your Queensland solicitor which additional records should be reviewed for the particular property. Access may require a written request and payment of a fee.
Information in a body corporate certificate is current on the date it is issued. More recent records or an updated certificate may be appropriate before settlement.
I look at the budgets, fund balances, insurance, meeting records, planned works and management arrangements to understand how the scheme is operating.
Together, they show the financial commitments and issues that may affect ownership.
What to check before buying into a scheme
Review the disclosure documents
Have your Queensland solicitor review the seller disclosure statement, body corporate certificate and community management statement before signing.
Review recent meeting records
Annual general meeting and committee minutes can reveal maintenance concerns, disputes, planned work, insurance matters and proposed expenditure. Ask your solicitor which records and period should be reviewed.
Check the sinking fund balance and forecast
Consider the balance alongside the approved budget, any available forecast, the condition of the shared property and planned expenditure. A low balance is not meaningful without this wider context.
Review the scheme rules
Check the rules applying to pets, renovations, noise, parking and common property. Blanket animal prohibitions are invalid for most community titles schemes, although approval and reasonable conditions may apply. Also confirm the planning and other requirements applying to short term accommodation.
Check for outstanding levies on the lot
A new owner may become liable for outstanding body corporate amounts associated with the lot. Have your solicitor confirm the position and any required settlement adjustments.
A body corporate may raise an additional contribution, often called a special levy, for particular work or an unexpected expense. Check whether any additional contributions have been approved or proposed and consider how they may affect the purchase.