There is an added responsibility that accompanies owning a property. You would want to ensure that the property is in proper management. However, the type of property management system selected is dependent on the ownership and legal status. The two common property management systems include strata management and body corporate management. There is a slight difference between strata and body corporate management systems, which can be attributed to the expected responsibilities and liabilities.
Strata management is a property management style for jointly owned units with shared facilities. Thereby, the purchase of a strata title gives you an entitlement to owning part of the building together with the common areas, such as the parking lot and gym facility. Even though you are responsible for your unit, collective responsibility is needed to maintain the facilities for the upkeep and maintenance of the common areas.
Body corporate management is a property management style that accommodates all unit and apartment owners. As a unit owner, you automatically become a member of the body corporate. The body corporate, commonly known as owner’s corporation, is responsible for a range of management, financial and administrative services regarding the common areas. Resultantly, body corporate compliments the strata management systems making it easy to manage the apartments. The unit owners are mandated to contract a body corporate manager to perform some of their duties. This has no impact on their collective property rights.
The body corporate functions under clearly stipulated rules and regulations that focus on maintaining and managing the common building facilities. The body corporate is tasked with handling external and internal conflicts that may arise from a disagreement between the unit owners. It is a requirement that all unit owners pay owner’s corporation fees which are mainly used for maintenance purposes, partake in any volunteered tasks, and comply with the set body corporate rules.
Part of the owners’ corporation fees is used for administrative tasks such as issuing rate notices to owners and hiring a building manager. Additionally, the owners can opt to have another sinking or special purpose funds for capital investments that benefit the building in the later years. Incorporating a special levy fund is also critical to service any debt the owner corporations have, and it was not budgeted in the financial year.
Body corporate rules and regulations
The volunteer body corporate manager is expected to enforce the following rules and regulations with the unit owners.
- Managing administrative duties, finances, and other funds, as well as insurance.
- Holding everyone accountable without causing the unit owners any delay or inconvenience.
- Keeping proper records of all documents, such as the register of committee members and lot owners, the budget expense, financial records, and meeting minutes.
- Ensuring that all records are accessible to property owners.
- Resolving any conflicts that can occur between unit owners.
Strata and body corporate management systems have a slight difference even though most individuals use them interchangeably. Strata is considered a multi-level building ownership structure where the unit owners have equal responsibility for the common areas. On the other hand, body corporate management is a legal entity that combines the strata title owners.