It is important Body corporate schemes are healthy, and by healthy we mean that they are operating efficiently and harmoniously for the good of prospective purchasers, resident owners, absent owners, and tenants.
If you answer ‘NO’ to more than 5 of the below questions, your body corporate may not be operating as good as it can be.
Property & Co may be able to offer you some simple advice that can help you operate efficiently, make savings, look after your investment and take the stress out of body corporate matters. Email or call us to help make your ‘body corporate experience’ a positive one.
1. Does your committee address maintenance issues in a timely fashion?
These can reveal the effectiveness of the Committee, the professionalism of the body corporate manager, and the seriousness with which they consider lot owner complaints.
2. Is there a low incidence of new and/or outstanding building defects?
If there are new or outstanding defects, the key for lot owners is the response to these issues and an open and responsive committee and builder.
3. Do you have a healthy Sinking Fund balance? Is your sinking fund forecast up to date and accurate?
Many new buildings will have defects and older buildings become run down and require capital works over time. A sound sinking fund forecast will let the committee know how much is enough to cover expected upcoming works. Was that last increase necessary?
4. Are there any Administrative Fund deficits and are they recovered quickly?
A healthy body corporate will recover deficits quickly, and if the cause is likely to be ongoing, raise the Administrative Fund levy so it is unlikely to happen again.
5. Are levies issued consistently?
Consistently issued levies increase financial solvency, enable owners to plan and pay on time, and indicates professionalism from the body corporate manager.
6. You rarely have owners with levies in arrears?
Outstanding levies are an annoyance for both the body corporate committee and lot owners. They impact on cash flow, create the need for collection tasks with associated costs, and promotes disharmony among owners.
7. Are AGM’s run smoothly and at the same time each year?
A smoothly running body corporate committee will hold their AGM’s at the same time each year, within a few days, year in year out, like clockwork. A missed AGM is cause for concern.
8. A Committee is elected each year?
Without a Committee, or even with one person making decisions, the scheme is vulnerable to delays and conflicts. The best outcome is a full Committee of up to seven members who are a cross section of the lot owners actively committed and involved in maintaining their investment.
9. Do you have regular committee meetings?
Regular meetings allow the Committee to understand and discuss issues and make informed decisions. It also provides a forum to make plans and create an agenda for the building moving into the future.
10. Are your body corporate records complete?
A clearly documented history makes a building more attractive to buyers. It also reassures other stakeholders like Mortgagees and Insurers and it’s a powerful tool when disputes arise. Complete records indicate professionalism of management, compliance with legislation and commitment to the processes that protect the rights of lot owners.
11. Is your building adequately insured?
Protecting the common property and everyone’s investment is vital, and it’s equally important to ensure the building(s) are sufficiently insured. This can be done by obtaining regular updates (every five years) of an Insurance Valuation prepared by a Quantity Surveyor. The scheme should then be insured to at least that value.
12. Do you have legislative compliance reports in place?
There several pieces of legislation that affect body corporates and compliance is mandatory. For instance, buildings with a pool must have a pool safety certificate, and buildings built prior to 2005 must have an asbestos survey, and possibly a register. Compliance with legislative requirements reduces lot owner’s exposure to risk.
13. Is there a low number of contravention of by-laws?
To avoid conflict bylaws should be applied consistently to every resident and lot owner. Bylaws do need to be policed and that needs to be done in an even handed, respectful manner that promotes high levels of compliance.
14. Are there low levels of complaints about maintenance issues?
Lots of complaints means lots of problems, or one large, serious one. A small amount of complaints, which are then reported and addressed (though not necessarily rectified) in the minutes is a good sign. It indicates lot owners are engaged with keeping the scheme in good order and the Committee is responsive.
These questions are a small example of some of the matters and issues that may face owners in body corporate schemes. Property & Co can help you navigate through some of the more complex issues and propose appropriate solutions to ensure your body corporate scheme is the best it can be. Contact us via email or phone us to start a conversation.