In real estate, particularly in multi-unit developments such as apartment complexes or townhouses, the concept of a body corporate, also known as an owners corporation or strata corporation, comes into play. A body corporate is a legal entity that manages and governs the shared common areas and facilities of a property development. Here is an explanation of how a body corporate works in real estate:


  1. Creation and Registration:

When a property development is subdivided into individual lots, a body corporate is typically established. This is done by registering the body corporate with the relevant government authority. Each lot owner automatically becomes a member of the body corporate upon purchasing a unit or property within the development.


  1. Governing Documents:

The body corporate operates based on a set of governing documents, which include the registered plan of subdivision, the body corporate rules (also known as by-laws), and any other legally required documentation. These documents outline the rights, responsibilities, and obligations of lot owners and the body corporate itself.


  1. Decision-Making Structure:

The body corporate has a decision-making structure that involves the participation of lot owners. This structure typically includes a committee, elected by the lot owners, which is responsible for making day-to-day decisions and managing the affairs of the body corporate. Major decisions may require a general meeting, where all lot owners can vote on important matters affecting the property.


  1. Levies and Finances:

To cover the costs of maintaining and managing the shared areas and facilities, lot owners are required to pay levies or fees to the body corporate. These levies are determined based on the budget set by the body corporate and cover expenses such as insurance, maintenance, repairs, and administrative costs. The body corporate manages the finances and ensures the funds are used appropriately for the benefit of all lot owners.


  1. Maintenance and Repairs:

The body corporate is responsible for organizing and managing the maintenance and repairs of the common areas and facilities. This can include tasks such as cleaning, gardening, building maintenance, and repairs to shared infrastructure like elevators, swimming pools, or common walls. The costs for these tasks are typically covered by the levies paid by lot owners.


  1. Dispute Resolution:

If disputes arise between lot owners or between a lot owner and the body corporate, there are mechanisms in place for dispute resolution. These may involve internal processes within the body corporate, such as mediation or conciliation, or external avenues, such as seeking assistance from a relevant authority or tribunal.


  1. Compliance with Regulations:

The body corporate must comply with relevant laws and regulations governing the operation and management of shared properties. This can include compliance with building codes, fire safety regulations, local government requirements, and any other applicable legislation.


It’s important for property buyers to be aware of the existence and workings of a body corporate when purchasing a unit or property within a shared development. Understanding the rights and obligations associated with the body corporate helps ensure a harmonious living environment and the proper management of shared spaces and facilities.