An Owners Corporation will govern properties that are part of a multi-dwelling or master-planned residential housing complex (for example, units, townhouses, and apartments).An Owners Corporation (formerly known as a Body Corporate) is a legal entity that oversees the subdivision of property registered. They are quite widespread in the real estate sector, as any property that is part of a subdivided estate (with more than one house) usually necessitates the formation of a legal Owners Corporation.
An Owners Corporation’s function is to safeguard (but not restrict) parts of partitioned land that are recognized as ‘Common Property.’ That is spaces or features that are used and benefited by all individual house (lot) owners. The Owners Corporation system ensures that all of this property is properly maintained, insured, and controlled.All Owners Corporation decisions are made by members of the Owners Corporation and/or the Owners Corporation management services. If an Owners Corporation gets or pays out money in any fiscal year, it must hold a full Annual General Meeting.
The administration of an Owners Corporation is obliged by law to keep several documents, including the complete name and address of each member, meeting minutes, accurate books of account, and financial statements of all revenue and expenditure, as well as assets and liabilities. The Owners Corporation is legally responsible for repairing common property and common utilities (i.e., areas shared by everyone but not part of the individual lot’s limits). Each member is responsible for keeping their specific lot in ‘good and serviceable repair.’ If a notice to repair is given on an individual lot, the owner must complete the repairs within 28 days, or the Owners Corporation may do so at a cost to the members.
A fee schedule is established by an Owners Corporation to support general administration and future maintenance, building and common area insurance, and other continuing Owners Corporation expenditures. All fees and levies are tax deductible and are paid directly to the relevant Owners Corporation checking account on a quarterly or annual basis (if an investment property).The yearly costs might vary depending on the size, characteristics, and complexity of the estate. An Owners Corporation may also impose special fees and/or establish a maintenance fund on occasion to enable charges to meet future unusual items of expenditure (eg: to pay for painting works).
Owners Corporations provide a special benefit to investors by acting as a “watchdog” over their asset, ensuring it has every opportunity to maximize growth and sustain property value. They will collaborate with a competent property manager to ensure that both the interior and external/communal aspects of your investment are always kept to the highest standards. This implies that the investment is less stressful and time-consuming than purchasing a stand-alone property (e.g., a home and land), which may not provide any greater growth or rental returns.Owner Corporations should not be regarded as a ‘cost,’ but rather as an additional layer of security and value that is an essential component of your entire property investment service.