Billion Dollar Property Developer Bob Andersen teaches you how to set up a body corporate to look after the common property in your development.
Hi, everybody! Bob Andersen back again talking about property development.
Today, I’d like to talk to you a little bit about how to set up a body corporate or an owner’s corporation.
What is it? Let’s look at an example.
Let’s say you were developing three townhouses. During the course of things, you’ve sold those townhouses to three different people. Obviously, when we get to the end of the project, we have to cut it up into three separate titles so that each townhouse can settle with three different purchases. That’s pretty simple, isn’t it? We’ve got different names for that, but often it’s called a strata plan or a strata subdivision.
In the end, we need to chop-chop-chop it to three townhouses. The problem is that there’s also some common property. The townhouses themselves would be untitled. Things like the driveway for instance is a common property. As a result, we need somebody to manage the common property.
In each of the states, there is legislation that dictates how bodies corporate or owners’ corps—whatever you want to call them—operate. There’s some pretty strict rules around that. Quick example: You have to have an annual meeting, and you have to have a certain quorum there. The body corporate looks after the property.
In some bigger projects or complexes, they could be involved quite a lot in common property. There could be swimming pools, spas, and gyms—not just driveways. In a lot of cases, the courtyards to townhouses are granted by exclusive use to the particular owners of the townhouse themselves.
In some cases, with apartments for instance, you might find the basement is owned by the body corporate—it’s common property—but certain carparks are allocated by what we call exclusive use, to certain apartments.
Let me get towards the end of the project. We need to set up a body corporate. The person principally that we’re going to call will be an experience property lawyer who’s already set up bodies corporate.
These body corporates also need to be managed by people that can comply with the regulations, so we need to appoint a body corporate manager. These body corporate managers are quite helpful around this time because they can help you supply things like the by-laws for the body corporate, and some of the other documentation that you need to set it up.
A combination of a manager early—who can supply a lot of this information for free—and a lawyer—who of course, doesn’t do anything for free—enables you to set up the body corporate. It’s pretty simple, pretty straightforward. But like anything in property development, there’s always an expert to guide you, to advise you, and to do the job for you—such it is with this.
As I’ve said, property lawyer’s what you need. A property lawyer will probably know plenty of property managers that can manage the body corporate anyway. Pull them in, pull all the paperwork together, and bingo! That’s what you got!
Looking forward to catching you guys next time. But hey, it’s nearly Christmas, so I’d like to take this opportunity from all the Property Mastermind staff, to wish you and your family a very safe, happy, enjoyable, and maybe a very profitable time, as we move into the New Year.
This is Bob Andersen saying bye for now. Catch you next time!