Body Corporate: Understanding the Basics
As a property owner in a sectional title scheme, it is essential to have a good understanding of what a body corporate is, its role, and its functions. A body corporate is a legal entity created by the Sectional Titles Act, 1986, and is responsible for the management and administration of the common property in a sectional title scheme.
What is a Body Corporate?
In simple terms, a body corporate is a collective of all the owners in a sectional title scheme. The body corporate exists to manage the common property and ensure that the sectional title scheme runs smoothly. It is governed by a set of rules and regulations called the management rules, which are set out in legislation and the scheme’s founding documentation. The management rules cover issues such as the use of common property, the levying of contributions, and the appointment of trustees.
The Body Corporate’s Functions
The body corporate is responsible for the day-to-day management of the sectional title scheme. This includes the maintenance, repair, and upkeep of the common property. It is also responsible for the management of the finances of the scheme. This includes the levying of contributions from the owners, the payment of bills and expenses, and the creation of budgets.
The body corporate is governed by a board of trustees who are elected by the owners in the scheme. The trustees have a fiduciary duty to act in the best interests of the body corporate and the owners. The trustees are responsible for ensuring that the management rules are enforced, the finances are managed correctly, and the common property is maintained and repaired.
Levying of Contributions
The body corporate is responsible for levying contributions from the owners in the sectional title scheme. The contributions are used to pay for the maintenance, repair, and upkeep of the common property. The levying of contributions is done annually, and the amount is determined by the budget created by the trustees.
The contributions are calculated based on each owner’s participation quota (PQ). The PQ is a percentage value assigned to each unit in the scheme, and it determines the proportion of the total contributions that each owner is required to pay.
In conclusion, the body corporate is integral to the management of a sectional title scheme. It is responsible for the management and administration of the common property, the levying of contributions, and the appointment of trustees. As a property owner in a sectional title scheme, it is essential to have a good understanding of the body corporate’s role and functions. Brookes Attorneys can provide legal advice and assistance on all matters related to body corporate management, ensuring that you have peace of mind knowing that your investment is in good hands.