Strata & Body Corporate Management

A body corporate is a legal entity that is created when land is subdivided, and the common property has been created because of the newly created plan of subdivision. Any person (and all other owners) who owns a property within that plan of subdivision is automatically a member of the body corporate.

The body corporate as an entity exists to facilitate the management of the common property.

In Victoria, the term ‘body corporate’ was replaced with Owners Corporation when the Owners Corporations Act 2006 came into effect on 1 January 2007.

To have an informed understanding of a body corporate, we would be more than happy to guide you here at Strata Management Consultants.

Strata management is also known as body corporate management and owners corporations management. These terms can be used interchangeably (depending on which state in Australia you’re in).

Strata management (or owners corporation management in Victoria) is the management of the legal entity that owners the common property of a building (i.e. the body corporate / strata scheme/owners corporation).

Strata management entails the convening and running of the Annual General Meeting, the setting of budgets, the collection of levies, the preparation of accounts and records, and responsibility for the upkeep of the building.

To learn about the role and responsibility of strata management in greater detail – Find out here.

Strata managers in Victoria charge $300 to $500 per lot on average (total of all above charges). Owners Corporation Management Fees differ between different strata management companies however typically the following factors will be determinants of the pricing:

• Size of the building and the number of Occupiable Lots
• The facilities, amenities, and common property of the building
• The location of the building and building usage (i.e. apartments, townhouses, commercial, industrial, or mixed-use)
• On-site staff presence i.e. part-time or full-time building manager, facilities manager, concierge, security, etc.
• The service expectations and other requirements of the owners of corporations.

It’s also important to note that Owners Corporation Management Companies derive their income/revenue from:

1. Professional management fee (for the service of providing strata/owners corporation management.
2. Disbursement fees (for costs that they incur in relation to things like printing, paper, envelopes, postages etc.)
3. Insurance commission – typically 10-20% of the base insurance premium as the OC managers are often authorised representatives of an insurance broker or insurer. This can be a contentious issue at times and one we will often discuss with Committees as to how best to mitigate any potential conflicts of issues
4. OC certificate fees – paid by the lot owner to the OC management company when they require an OC certificate for Section 32 when selling their lot in the owners corporation.

If you are concerned about the fees charged by your incumbent management company or any other cost aspects of your building’s operating expenses, most welcome to email us at office@strataconsultants.com.au and undertake a review.

In Victoria, Tier 1 and Tier 2 must appoint an owners corporation management company to manage their OC – unless they have opted not to do so via the passing of a special resolution of the owners corporation.

The Owners Corporations and Other Acts Amendment Act 2021 came into effect on 1 December 2021. The amendment categorises owners corporations into the following 5 tiers and stipulates certain requirements for each tier:

To learn more about the compulsory rules and regulations related to body corporate Victoria. Find out more here.

Strata property is a property title or ownership in a strata-titled building i.e. an apartment building, townhouse complex, or an office building where there are multiple owners. Strata title means shared assets or amenities (i.e. shared driveway, gardens, lifts, basement car park, swimming pools, etc.) and gives rise to the creation of an owners corporation.

Strata property or more accurately strata-titled property differs from Torrens titled property where you are the sole owner of the building and the land (with the only shared assets or property being the neighbouring fence).

For more information to better understand what exactly is strata property. Visit here.

A body corporate manager undertakes the key functions of accounting, insurance, documentation, AGMs, maintenance, and upkeep of the building, and provides guidance on body corporate / OC matters.

If you would like to better understand the role of a body corporate manager and how it applies to you. We would be more than happy to help at Strata Management Consultants.