This information has been provided by
Australian law firm, Australian Conveyancing Services and is applicable in Queensland
only.
When you buy into a Townhouse or Unit complex, you need to consider the special legal nature of that type of property, that doesn’t apply to an ordinary house & land situation.
This is because a ‘strata titled’ complex consists of not just one dwelling, but many (from the normal ‘6 pack complex’ to a unit complex of 100s of units). Whether you buy into a small complex or a large one, there are certain principles that generally apply, as follows:
You own your unit and the airspace encompassing that unit, but not the external walls
You have an ownership share, along with all other unitholders, in the common property surrounding the unit (such as a pool, grounds, common stairwells, etc)
There are rules which govern your use of the Unit and the common property, called Body Corporate rules
A body corporate
(comprised of a committee of owners) is responsible for
the maintenance and other matters relating to the
complex, and has it’s own individuality (with the right
to sue and be sued)
You pay to the Body
Corporate certain levies, and the amount depends on your
lot entitlement. There are normally two levies that are
payable on a periodic basis: The administrative levy
(for general maintenance, such as maintaining lawns,
etc) and a sinking fund (for major expenditures, such as
painting and large repairs)
I have seen many unit complexes and body corporate situations, and each does have its own particular ‘personality’, which is largely dependent on the character types of owners and how they interact. Just like with a normal family – some are rowdy, some always arguing, some peaceful and stable, so too are various body corporates. If you get a good group of owners and a competent Body Corporate, you will be happy, but a constantly bickering or inflexible Body Corporate can make life very unpleasant. Take a look at the following real life examples:
Example 1: Bonnie was an elderly lady who bought a Unit on the ground floor of a Complex that contained 19 other units. The heat affected her so she wanted to install an air conditioning unit in her bedroom (the type that sticks out of the window/wall). The Body Corporate was a tough one run by a dictatorial Manager, who did not want the outside walls ‘defaced’ by unsightly projections. Bonnie had to stick to a fan.
Example 2: George and Meredith owned a Unit that was part of a ‘6 pack’. Most of the owners used the Units as holiday homes a few times a year, although there were one or two retired owners who lived there permanently. George wanted to put up a lattice wall at the front of his Unit to give him some privacy from the road. The Body Corporate readily agreed and George erected the wall.
Read the Body Corporate family ‘diary’ before you buy!
The body corporate is required by law to keep a written record of its various dealings. This includes its budgets and forecasts of expenditure, correspondence in and out, and also the Minutes of meetings with its members.
Before buying into a Unit
complex, it pays to conduct a Body Corporate search to see
if everything is fine in the body corporate records. Things
to look out for are disputes amongst owners, any litigation
against the complex, and any major expenditures coming up
that the sinking fund can’t cover.
These records read like a ‘diary’ and can tell you very quickly whether the Unit/Townhouse experiences trouble between the owners or has other problems. The Minutes of the Annual General Meetings are particularly helpful in this regard. This meeting is held once a year and all Unit owners can attend. At that meeting, anything of relevance to the complex is discussed, and decisions made on what to do. Looking at the Minutes gives you a good ‘snapshot’ of what went on – are people generally agreeable? Or are there many disputes and disagreements? How reasonable are the participants? Are there ongoing battles?
If the member of the family don’t get along, or there are other
problems (such as large expenditures coming up or litigation) then you may not want to buy into this.
By looking at the records before you sign, you can avoid walking into trouble – not all problems that appear after you sign allow you to terminate after you sign (for instance if there is a long history of bickering, disputes or poor management of the complex).
