A lot owner from QLD is looking to purchase a villa or duplex and is wondering what is covered by body corporate. Frank Higginson, Hynes Legal provides the following response.
Question: I’m looking to buy a villa or duplex in a small strata scheme. Can they make their own rules or is there any Queensland government legislation about what is covered by body corporate?
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I am looking to buy a duplex or a villa in a small complex up to six units.
Can they make their own rules or is there a Qld government legislation in the regard of the items eg. plumbing, electrical, roof repairs, fencing. What is covered by body corporate?
I am confused as the sellers claim the body corporate only pays for the building insurance and gardening. Does this sound right?
Answer: This is the difference between sales patter and legal detail.
Lots in small schemes are often sold on low body corporate levies and the absolute minimum for levies is insurance. After that what is needed depends on what the common property is.
In this one there is some gardening. There would also be (probably) whatever common infrastructure (pipes etc), driveway, letterbox, roof (it is a supporting structure for both lots) and so on.
The body corporate’s obligations to maintain these things is absolute. A body corporate cannot contract out of that obligation. But the maintenance of them is very likely capital in nature, which is what a sinking fund does.
Self managed strata
If this building is self managed (like lots of small ones are), it wouldn’t surprise me if the levies are just for insurance and gardening and there is no sinking fund, which means that if (and when) any of those other things need work, owners have to be hit up for it as 1/6th of whatever that now urgent cost is.
So in short:-
- The act sets out the rules for how these things must be maintained;
- If the budgets are not properly managed now, there can be surprises at the end.
But you also never know if the agent is just doing the usual sales pitch without seeing any of the detail and it is all in fact built into a proper sinking fund budget which does form part of the levies!
This post appears in Strata News #182.
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