An Owners Corporation, also known as a body corporate, consists of all lot owners in a strata property. The Owners Corporation carries out tasks required under relevant laws. A lot owner becomes a member of the Owners Corporation when buying into a strata title property. There is no way to opt-out from the obligations since these go hand in hand with being a member.
The Owners Corporation has plenty of things to do. Some of its key responsibilities include:
- Appointment of a strata committee
- Issuance of fee notices to owners
- Bookkeeping and preparation of financial statements of accounts
- Management of building compliance and insurance requirements for the common property
- Management of finances and funds
- Management of maintenance of the common property
- Record keeping of accounts of all strata property matters
- Supervision of repairs of the common property
The Owners Corporation gives residents a copy of the by-laws and building rules. These should be in line with the state laws.
A representation of the Owners Corporation's interests, this committee carries out decisions on its behalf. It has several responsibilities, such as coordinating functions with the strata manager and building manager. Reviewing owners' requests, including pet applications and flooring applications, is one of many.
Types of Owners Corporation
There are four categories of Owners Corporation under the Owners Corporation Act 2006.
Unlimited and Limited Owners Corporation
Sometimes there is more than one Owners Corporation within a Plan of Subdivision. In this case, there will be one Unlimited Owners Corporation that affects all lots. The rest will become Limited Owners Corporation having an impact on only some of the lots. The one identified as Owners Corporation No. 1 becomes the Unlimited Owners Corporation.
A Limited Owners Corporation has no right to serve the lot owner a notice to repair or maintain the lot. It cannot enter the property to undertake any repairs without the consent of the owner. It also has no right to oblige the lot owner to shoulder the costs of said repairs and maintenance.
Prescribed and Non-Prescribed Owners Corporation
There are two ways to fall under the Prescribed Owners Corporation category. One is to become an Owners Corporation consisting of more than a hundred lots. Another is to levy regular fees of more than $200,000.00 in a financial year.
A Prescribed Owners Corporation has more financial reporting obligations than a Non-Prescribed Owners Corporation. There is one obligation that serves as the most significant. It is to have the financial records audited every financial year. Preparation of a Maintenance Plan is also a duty of a Prescribed Owners Corporation. An ordinary resolution should approve the said plan. The Prescribed Owners Corporation must then establish a maintenance fund. The Act does not oblige the Owners Corporation to adopt a maintenance plan, only to prepare one.