“How to change body corporate companies” is one of the main queries we at Strata Consultants receive on a regular basis, and it’s easy to see why. It can be difficult to work out how the body corporate process works, and so when issues arise, finding assistance can be a very complex process. At Strata Consultants, we are dedicated to providing Australian residents with the knowledge, assistance and support they need to change body corporate companies if and when it is necessary to do so.
- Start By Understanding the Owners and the Building
- Understand Where the Majority Stands When it Comes to Changing.
- Give Due Consideration to the Body Corporate Management Contract and Legislation.
- Properly Understand Your Body Corporate Management Requirements.
- Carefully Evaluate Prospective Management Companies.
So, for those that are planning on going through this process for the first time, let’s discuss how to change body corporate companies.
1. Start By Understanding the Owners and the Building
A body corporate is made up of Lot Owners who each, whilst owning their own individual strata title lot, are members of the body corporate. The members of the body corporate can be thought of like shareholders in a company and may elect a Management Committee to oversee body corporate management matters.
Most body corporate companies in Victoria will employ the services of a professional body corporate management company. The appointment (and termination) of the body corporate management company is solely and 100% the choice and decision of the body corporate owners.
2. Understand Where the Majority Stands When it Comes to Changing.
When it comes to working out “How to Change Body Corporate Companies” – importance must be placed on the majority. Body corporates are like a democracy in that it is the majority who makes the decision.
If there is a body corporate management Committee then, typically, part of working out how to change body corporate companies will require approval from the majority of the Committee [pending a number of other factors].
If the body corporate hasn’t elected a management Committee then, typically, the decision to change body corporate management companies will be that of the majority of the strata title lot owners.
3. Give Due Consideration to the Body Corporate Management Contract and Legislation.
In Victoria, changing body corporate management companies requires owners and Committees to consider the following facets of strata law and legislation:
Contract law – What does the last signed body corporate management contract binding the body corporate to the body corporate management company say? What are the terms and conditions? i.e. if the body corporate management were to be changed another services provider.
Statute law – The primary piece of legislation governing body corporates and body corporate management in Victoria is the Owners Corporation Act 2006. However also worthwhile understanding these amendments and updates to OC Act 2006 that may be relevant.
Common law – Body corporate matters and disputes are resolved through the Victorian Civil & Administrative Tribunal (VCAT). Matters and disputes revolving around the termination, sacking, changing, and exit of the body corporate management services can sometimes be presided and decided by a VCAT Member. As such there are numerous VCAT cases and legal precedents that may relevant to you when it comes to changing body corporate management services.
4. Properly Understand Your Body Corporate Management Requirements.
It is important to remember that there are effectively two things that require and are seeking management services:
- The physical building itself;
- The body corporate i.e. all the lot owners and the Committee.
Each building is different and each building will its own set of priorities and needs. As a high-level example, older buildings will require a lot more attention with regards to maintenance plans, raising maintenance funds, and addressing issues before they get worse or become a safety issue. Whereas with newer buildings, the overarching priority for owners, Committees, and body corporate managers should be about building defects (in Victoria you have six years to make a claim for structural defects and two six years for non-structural).
Owners and Committees are also going to have different demands of their body corporate manager. This requires consideration and mapping out.
5. Carefully Evaluate Prospective Management Companies.
In Victoria, there are over 90,000 body corporates – comprising of over 1,000,000 strata title lot owners.
In terms of body corporate management companies in Victoria, there are over 1,300 body corporate managers. These range from established body corporate management companies (large to small), real estate agency managing body corporates, and right through to the one-man operators who have been doing it for 5 minutes.
Body Corporate Managers Look After Not Only Your Body Corporate But Your Money Too.
Due diligence and choosing carefully is important – have a read of this article for one example of where did things didn’t go right – Don’t Trust a One-man Band with Your Money (or Owners Corporation Management).
Lastly, Strata Management Consultants specialises in not only advising and guiding Committees on how to change body corporate management companies but have also carefully vetted every management company we work with. Find out more about the value of having a Strata Consultant working for you here, or feel free to get in touch on 1300 917 848 or via email at email@example.com.
How to Change Body Corporate Companies in Victoria? – Content Copyrighted 2020 by Strata Management Consultants