It a building is well maintained the usual increase of annual Body Corporate fees are 1-2% which covers inflation. Ensure you look at the long term maintenance plan to see what is coming up and if extra costs may occur during that period. A lawyer can assist you with this if need be.
Over time everything increases in price, for example buildings require cleaners for common areas, rubbish collectors and so on. In turn to cover these costs the Body Corporate need to increase their fees.
There are two major factors to watch out for to avoid more than the expected annual increase in fees.
Firstly, a building that is not well maintained may need extensive work to bring it back to where it should be, this will in turn effect the Body Corporate fees and they may rise significantly.
The second factor is to have a look at, is the Long Term Maintenance plan for the building and seeing if funds are being allocated to save for any major changes that are required to be completed in the building, for example the need of new lifts. If the Long Term Maintenance plan is not being followed or funds aren’t being allocated to it, an unforeseen expensive cost may occur at the cost of apartment owners.
Good day, Andrew Murray here from the Apartment Specialists, talking about Body Corporate fees, how much do they go up each year? Now if the building is looked after properly it should go up with inflation, or remain pretty consistent, and inflation is generally about 1-2%. So not much. Now the reason for this is because, when you think about it, when I was small– okay 20 years ago, when I went to buy a can of Coke, when I was younger it was $1. Now it’s probably about $1.60. So over a long period of time, things go up.
You think about a Body Corporate, you’ve got cleaners, you’ve got rubbish collectors, over time their fees will slightly go up as wages go up, and things like that, which is perfectly normal. Now the big thing about a building, and the concern is – and this comes under when you’re going to purchase – is when a building is not looked after. And this is when Body Corporate fees can go up substantially.
So what do I mean by this? I mean let’s say, in two years time, the lift needs to be replaced. There’s a long term maintenance plan, and you can see in the long term maintenance plan it needs to be replaced. The cost that’s estimated is, say $200,000. Then when you look in the long term maintenance fund, or the contingency fund, and there’s, say $30,000, well you know that there’s going to be a shortfall, and money’s going to have to be raised.
Which will mean in that period you’re going to have an increase in Body Corporate fees to raise that money. So the key here is looking at the long term maintenance plan when you go to purchase, and the financials, specifically the long term maintenance fund, and the contingency fund, and see if they match up. I mean, how healthy, financially is it? And do they match the things that have got to, and I mean when that building needs to be painted in five years time.
Is the Body Corporate following that long term maintenance plan, and putting money aside each year for that time? Because if not, you Body Corporate fees could raise substantially and so that’s an unknown amount. And that means you’ve bought into the wrong building, or didn’t use your due diligence properly.
Make sure the Body Corporate that you’re going in to buy into is following the long term maintenance plan, and you can easily ask your lawyer to check this, or put this in as a condition when you purchase.
I hope that helps, Andrew Murray, Apartment Specialists, cheers.
If you have any questions, flick me an email at email@example.com or call +6421 424 892 and I’ll be happy to answer your queries.
Why is it important to check the financial position of a body corporate? How can you tell if it’s healthy or not? Get all the answers straight from Andrew of Apartment Specialists. He shares his insights about Body Corporates and factors that affect it’s financial position. Watch the podcast to know more.
How to Tell if the Body Corporate’s Financial Position is Healthy or Not
When looking at an apartment, one of the most important things to check is the financial position of the Body Corporate.
Does the Body Corporate have enough money to look after the building?
Does it have money for future maintenance and improvements?
Is it even looking after the building at present?
WHY SHOULD YOU CARE?
If a Body Corporate is falling short, money wise, when you compare the financials to the Long Term Maintenance Plan, it means the Body Corporate doesn’t see maintenance of the building as something that is important.
An unmaintained building leads to issues, leaks and big bills. If you don’t look after a building it falls apart.
This will then lead to more money needing to be raised. It may result in Body Corporate levies sky rocketing or special levies introduced, which WILL affect the value of your investment negatively.
So what do you need to look at?
1) The Long Term Maintenance Plan
2) The current financial position – Balance Sheet
3) Contingency Fund and Long Term Maintenance Fund
4) The approved budget for the year
What do you need to do?
You need to look at the Long Term Maintenance Plan which should have been created by an external professional; make sure it is being followed and that the money is there to look after the building in the future.
Below is a quick example of what to do.
1) Find out how much is needed to meet the Long Term Maintenance Plan (LTMP).
By law, a Body Corporate has to have a Long Term Maintenance Plan (LTMP) that forecasts for any needed repairs and maintenance to make sure the building is kept in tip top condition for the next 10 years. By law, it has to be reviewed every three years by the Body Corporate.
Now the funny thing is, yes a Body Corporate has to have a Long Term Maintenance plan, but there is a hole in the Unit Titles Act 2010 (May). It doesn’t have to be followed, so you need to make sure it is.
And that is what we are going to do today. I’ll show you how to make sure the Body Corporate you are looking at is healthy and following their LTMP (Long Term Maintenance Plan).
So in YELLOW, you can see the amount needed each year to make sure the building is looked after.
2) What is the FINANCIAL POSITION of the body corporate. Does it have the funds to meet the LTMP and is it raising more?
The key things you are looking for is that the Total Equity has increased from the previous year. As you can see here, it increased from $80,710 to $138,079.
The next thing you are looking at is the Contingency Fund, which is often called the sinking fund (old terminology) and the LTMF (Long Term Maintenance Fund).
Now what is important here is not the individual amounts but the total as most Body Corporates keep the majority of their Long Term Maintenance Funds in the Contingency Fund due to allocation reasons.
You are then going to compare it to the Long Term Maintenance Plan
So far this building checks out.
It has a surplus of $70,000; and so more than enough for this years expenditure need of $32,112.
But what about the next year and the next.
3) Is the Body Corporate putting aside enough money for the maintenance required for the future?
This is where we look at the budget for the next year, which your levies are currently paying for.
Here you can see $40,000 being raised each year in the budget specifically for the Long Term Maintenance Plan as well as an extra $55,000 to build up a reserve.
According to the Minutes, the Body Corporate are building up a reserve just in case something unexpected happens like a lift breaking down and for the Body Corporate to be more proactive by not just maintaining but improving the building i.e. they are looking at getting a designer to radically improve the common areas to increase values.
You can see here the Body Corporate is in good shape and is on it’s way to being in very good shape. It tells you the Body Corporate are committed to raising the values of the apartments as well as the standard of living of all those who live in the complex.
Now this is not always the case, but hopefully this has helped you understand what you need to look at when purchasing an apartment.
If you have any questions, flick me an email at firstname.lastname@example.org or call +6421 424 892 and I’ll be happy to help you with your queries.
Good day, Andrew Murray here from Apartment Specialist, talking about how to find out if the body corporate you’re looking at is healthy. Now, this is something that is extremely important, but very very few purchasers do. And I know this because I’m obviously selling apartments all the time. What I’m going to be talking about today is, firstly checking the financial position of the body corporate.
How much money they have, their liabilities and their assets? Does the body corporate have enough money to cover the maintenance and what needs to be done to the building to keep it in really good shape moving forward? Are they actually looking after the building? Is it actually being proactive and following what’s called a long-term maintenance plan?
Every building has to have a long-term maintenance plan, which is enforced by the Unit Title Act that was set in 2010. Yet under this act, you don’t actually have to follow it, so it’s a bit of a loophole. So as a purchaser you really need to know this. In front of you is a long-term maintenance plan, but firstly, why should you care? Why does it matter? Most people just say, “Look through the body corporate minutes and make sure it doesn’t leak.”
Well you should care because if the long-term maintenance plan isn’t being followed, that tells you that the body corporate doesn’t care about the maintenance of the building. A building that is not maintained well will have issues, just like a house that’s not maintained well. It’ll be more likely to leak, and more likely to have problems which will cost you money and lead to high body corporate fees or have a leaky building, and there goes your investment.
What I’m going to do is show you today, how you actually check how healthy an apartment body corporate is. I’m going to start here with a long-term maintenance plan. Here you can see by law that you have to have one that does at least ten years in advance. You can see up here, you’ve got the years, 2015 right through to 2024. Also, you’ve got all the things that need to be done, wall paint, entrance walls need to be done, cladding, building washing and so on.
You’ve got the total amounts, and here you can see it’s $32112 need to be spent in the 2015- 2016. In 2016 it’s $43000 and what we’re going to be doing is checking that these amounts are actually going to be. First, they’re there and the works being done, and secondly the money’s been set and being raised for the future. if we look at the next one I’ve got here which is next we’re looking at obviously the balance sheet.
What are the assets here? You can see here you have a total equity of $80000 last year and $138000 this year. So that tells you that the body corporate’s financial position is increasing. That is very good. Now what you need to then check is, it’s increasing because:
a) are they doing nothing
b) they’re putting a lot aside money
They’re putting aside more than they need, which is what you want them to be doing. In this case they are actually doing the work, which is good. So that shows you’re in a very good position. Next, you’re looking at obviously the contingency fund and the long-term maintenance fund. These are actually all the same thing. A contingency fund, you may have heard of what’s called is a sinking fund. It’s the same thing, the sinking fund is the old fashioned terminology, the contingency fund is the new.
The long-term maintenance plan here, is a long-term maintenance fund. You actually add these all together and it comes to around about you’re looking at probably close to $75000, which that’s how much money’s been put in just this next year’s budget, towards obviously looking after the building, which is very good. Because if you match it back to what we were looking at before, which is this amount, is easily enough to cover that $32000 for this year, and some extra to be building up the contingency fund for the future.
Now we need to look at the budget. So this is where we’re looking at what’s happening, we’ve got enough money now. This building and as you said, it’s in a position of one hundred and whatever it was thousand dollars. But what happens in the future? If you spend money each year, you’re decreasing these funds, you need to make sure that the budget is being set to increase, otherwise your body corporate levies are going to need to be increased in the future.
And here you can see they’re putting away $30000 each year plus another $10000, so $40000 just to the long-term maintenance fund, and on top of this another $55000, basically $56000 towards the contingency fund – this is all one thing. They’re spending $32000-$33000, which is pretty much this amount here, but they’re actually increasing their contingency fund by another $55000.
What that means is they’re building up more money. If you read through the minutes of this body corporate, they’re doing this because they want to have money in reserve for what if something happens that wasn’t expected, for example the lift breaks down. But what they’re actually doing is looking at not just maintaining the building but improving it, and that’s a really the key that you want to look in the body corporate.
What they’re doing here is they’re looking at getting a designer in and redesigning all the interior, all the common areas to make it look– basically they’re raising the values and make a better living experience for the others. Which is fantastic. More and more, you can see here, I’ll just go through it again very briefly. You’re looking at the long-term maintenance plan.
You’re looking at how much is needed, are there any big amounts here, these are all pretty constant, the highest tenure is $37000. Not all buildings are like this, you might have one where the roof needs to be replaced, and you’ve got $100000 here, so you need to make sure that money’s being put aside for that. Secondly, you’re going to the balance sheet to see that body corporate position, you can see that $138000 in the red, which is great, and then obviously their net assets.
They’ve got quite a bit of money already at the moment in the contingency fund and the long-term maintenance plan. Then what you’re doing is you’re looking to the future and going, what are they doing now? What’s my body corporate levy doing now? What it’s doing is of course all the things that are being spent here.
You can see swimming pool expenses, you can see a building wash in here, which is telling you it’s being looked after, plus extra money’s being raised out of your levy already being paid.Which is great news. So this is a very healthy body corporate, and it’s a good one but it’s just going to get better and better. Hope that helps.
If you have any questions, flick me an email at email@example.com or call +6421 424 892 and I’ll be happy to help you with your queries.
The Body Corporate takes care of running the finances for your apartment building. The 3 biggest costs are the insurance, building manager and the Body Corporate administration company.
The first cost is the biggest and that is insurance. Insurance covers the whole building. This includes fire, flooding, cover of accommodation if needed and so on.
The second biggest cost is the building manager. The building manager co-ordinates all the maintenance and all the day to day including cleaners, looking after and maintaining common areas, security updates and so forth.
The third main cost is the Body Corporate administration company, these are companies like BCA, Crocker’s or First Street. This is the company who is solely employed by the building and runs the administration and day to day running of the building. Like collecting levies, paying bills, financial reporting, organising.
Good day, Andrew Murray here from the Apartment Specialists talking about the expenses a body corporate has to pay each year. There are three main things that always stand out as being the most expensive. Obviously, you have one off things, like if a lift has to be replaced or there’s the painting of the building that needs to be replaced. But continuously each year, there are always three main expenses that are always there and are the main ones.
The first one is insurance, and this covers if there’s fire, there’s flooding, or an earthquake. It means that if there are one of these things it’ll basically pay to replace the whole building and give you income or a place to stay in the meantime while it’s fixed. So that is number one, it’s always the largest.
Number two is generally the building manager. So, this is the man or woman who coordinates all the maintenance, and everything that’s happening in the complex from day to day. It can be from the cleaning, from the lift maintenance, from getting the code compliance from the council each year for the building, right through to carrying out the long-term maintenance planned activities on behalf of the body corporate committee and body corporate.
Now the next one is the body corporate administration company. And now this is what a lot of people think is the body corporate. It’s not. You as an owner, and you need to understand that the owners are the body corporate; you employ a company to do all the administration. So, this is taking care of all the accounts, the balance sheets, collecting all the money, making sure it’s coming in, making sure if people aren’t paying.
Companies like Crockers, Body Corporate Admin, which is called BCA, or Strata or First Street. So these are charged and they’re are generally charged per unit, and that’s generally the third biggest expense. After this, you’re talking about your miscellaneous. Your things like, obviously as I mentioned earlier, your long-term maintenance activities like doing up the garden, or the painting the building.
It could be things that just gone wrong during the year. Maybe the lift needed to be fixed, or maybe light bulbs needed to be replaced and just things like that. Anyway, I hope that helps. So yeah, just recapping, the three main expenses of every body corporate, which are the most expensive, that happen every year are:
The building manager
Employing of the body corporate administration company
If you have any questions, flick me an email at firstname.lastname@example.org or call +6421 424 892 and I’ll be happy to help you with your queries.
Purchasing an apartment from overseas is a frequent occurrence in Auckland and with sound due diligence a more than achievable task with little stress involved.
Buying from overseas does have its risks, the reason for that is due to not being on the ground and having the ability to see the apartment physically.
Factors to consider and practices that are recommended pre overseas purchases in Auckland are to have either a friend or family member or an independent rental agent who is not associated with the company who is selling the apartment to do a viewing for you. Photos cannot always be relied on.
Secondly, a building inspection is key and well worth the money.
Ensure you have a relationship with a lawyer, create this prior to purchase and make sure they are a lawyer who understands and has done many apartment sales.
Clauses in the agreement are important and protect you during the sale, if there is nothing wrong with the apartment the agent will happily add these in for you.
Lastly, the final factor to consider is getting a rental agent to assess what rent can be expected and tenants that you are likely to attract.
Andrew Murray from Apartment Specialists. Buying an Auckland apartment from overseas. How do you do it, and how do you do it properly?
Now the Auckland apartment market is booming at the moment, and the future looks very bright through the years to come. And, yes, everyone is making money. But the thing is, buying from overseas has its risks. And I see this happen time and time again where an overseas purchaser will purchase something that they may have not purchased if they were actually here. I suppose that’s the best way I can say it. And the reason for that is a real state agent is in a position of trust.
Now the thing is is because you’re overseas or being a buyer and you’re buying overseas, you’re not on that ground floor. You’re not able to do the things you’d like to do if you were actually say in Auckland. So what I’ve done is form five steps that will ensure that your purchase is not only a profitable one but a safe one, and you’re getting what you’re wanting to achieve. And how you do that is by surrounding independent advisors around you.
So first of all, for number one, don’t rely just on the photos. The photos may be missing certain things. So what I recommend you to do is get a friend or family member that you can trust to come and inspect the apartment for you. Now if you don’t have that person in Auckland, I would engage an independent rental manager from a company that is not the company of the real estate agent to do an inspection for you and they can give a report back to you.
Now number two, get a building inspection. Now a lot of Kiwi buyers don’t do this. I still think they should, but being an overseas buyer, it is mandatory. You’ve got to get a building inspection and the reason for that is they go through it with a fine tooth comb and yes, they may bring up small things or things that are damaged here and there but if you didn’t, you’re going to end up paying for it at settlement. And worst case scenario, they’re going to be more likely to pick up something if there’s an issue with the apartment or the complex.
Number three. Create a relationship with a lawyer. Now that’s an obvious one because you’re going to have to buy the apartment, but create your relationship before you purchase. The reason I’m saying that is because then they can get you advice on how to go into that purchase. Now also make sure you choose a lawyer that is experienced with the kind of apartment you’re purchasing. So not only apartments, but if you’re buying a leasehold apartment make sure they’re experienced with leasehold apartments. But absolutely a minimum, make sure they do a lot of apartment sales because, for example a lawyer that’s down in another part of the country or another part of Auckland where there’s not many apartments, doesn’t really have the expertise to to give you the service you need.
Now, number four, clauses in the agreement. So these are things you put in the sale and purchase agreement to give you extra protection. Now if there’s nothing wrong with the apartment or nothing wrong with the complex, an agent should have no problem with putting clauses in the agreement. And these are clauses like, “This agreement is conditional upon my lawyer’s approval of the last two years of body corporate minutes and maybe the formal content of this agreement, et cetera, et cetera.”
Now number five is rental income. Do not rely on the rental income even that of the apartment’s getting or what’s on the flyer. Now yes, real estate agent will be doing it– has to actually do it of what’s realistic but for you to really rely on it, I would get an independent rental assessment from again a company that is not under the same umbrella, who is not part of the company that the real estate agent is part of.
So through those five steps, that enables you to have a pretty full-proof way of purchasing and that means you are able to purchase from overseas and be a lot more comfortable through the whole process.
Now I work for a lot of purchasers that are overseas and obviously I follow this when I’m working with them. Now it is also hard to find the right people to use, so feel free to flick me an email: email@example.com. Even if you don’t buy through us, I can give you a list of people who are experienced in whatever area you need and they can send it through to you.
Anyway, I hope that helps and happy purchasing. Cheers!
If you want to know more about apartment buying in Auckland, just email me at firstname.lastname@example.org or call +6421 424 892 and we will happily help you or connect you with the right people.
Does selling an apartment in a particular season make a difference? When is the best time to sell? In this podcast Apartment Specialists answer the following questions and discuss the factors that affect the sale of an apartment. Watch this video and get more insights.
Good day, Andrew Murray from the Apartment Specialists. Does selling in a particular season make a difference? For example, selling an apartment in spring, is that a good time to sell compared to winter. Now with apartments, there is actually no difference. There are times where you should be selling, which we will cover later, but really selling during the season like waiting to the spring, autumn, or whatever has just completely changed.
There are a few factors that I think are the reason for this. Number one probably is, apartments look the same all year round. The only thing that’s changed is maybe there’s going to be a few more clouds in the sky with the view.
Number two is, you don’t have a garden. A lot of people like to do the improvements in the summer or leading up to the summer when the weather is better. But an apartment is inside, so you can do your renovations any time of the year.
Also, technology, when you think about it, people are looking at apartments online all the time. They do most of their research online and they are actually not going to open homes as much. They will actually get a huge list of apartments and the ones they are actually viewing, maybe only five or six.
The other factor is the learning factor beecause apartments are very different to houses. This is a big change most people are going through in New Zealand. They have got to learn about body corporates, pre-contractual disclosures, and how to make sure you Are not buying a leaky building, understanding the market because there is so many more apartments on the market than house – it takes longer.
So someone may start looking in spring but may not end up finding apartments, or be comfortable with purchase come winter. There is no difference to sum it up. The time when you don’t want to be selling or putting your apartment on the market is very late December.
Now, the reason for that is because in that period, When the lawyers are gearing up to go on holiday, but more so that everybody else is thinking about Christmas shopping. And you just don’t have the same people looking for apartments in the last two weeks before Christmas.
Anyway, I hope that helps. Talk to you soon. Andrew Murray, Apartment Specialists.
There are tasks that you need to do before moving into your new apartment. This podcast enumerates these tasks so that your transition is way smoother. Find out more from this video.
Good day, Andrew Murray here from Apartment Specialists. You are moving into your new apartment and you have got several things you need to do.
Now first, you probably should have already done this, but re-read the body corporate rules. This will help you or stop you making a fool of yourself. Also, doing things that are quite basic, where if you weren’t aware of it, you can easily make a mistake. You know, certain ways you have to move in, and certain things you have to do, because every building is specific.
Number two is to contact the building manager. There is nothing worse for a complex or a building manager to have people moving in without them knowing. Contact the building manager and ask first of all, “Who’s the best power supplier?” Because there are different companies that serve different buildings. Different connections and different kind of meters. Some are better than others. In the CBD, it’s very different. Often some do not have meter-readers.
Number three, if you do not have a car park and even if you do have a car park, you need ask when you can use the loading bay. If there is one or a spare car park to help you move all your stuff into your apartment.
Number four is in the lift. What a lot of people do not realise is, especially not in the nicer-buildings. They actually have covers that hang upon the outside of the lifts, or also from the inside of the lifts. They do it to protect the lifts and these need to be put on.
Also, when is the best time to move in? Because you do not want to be blocking the lift at peak time between 8:00 and 9:00 while everybody’s trying to get to work. That is going to not make you very popular. And obviously you want to move in and make friends.
Anyway, make sure you ask advice on that. Number six is to make sure you give your emergency contact details to the building manager and the body corporate. Now, that is just because they may need to get hold of you, and certain things might happen if you go on holiday.
Number seven is get the chairman’s details. Give him a quick call and introduce yourself. If you have any questions, ask him. That way, you have got someone you can deal with directly regarding your building. If things happen over your building, or if you are unsure of that you may want to be approved.
You can always give your feedback to the chairman or go to the committee. Then, if you want to take one step further, you can ask to be on the committee of your body corporate.
Anyway, hope that helps, and yes, happy moving in.
How do you stay in touch with your body corporate when you cannot attend an AGM? How do you know what is happening in your apartment complex if you’re not in the meeting? This podcast answers these questions and provides an alternative solution if in case you cannot attend the AGM. Watch the video to get some essential tips from the apartment specialist.
What happens if you cannot attend your Annual General Meeting for your apartment complex? You could be a person that is about to purchase, and you know you are not going to attend them i.e. you are overseas, or you are out of Auckland, or you simply just cannot make it. How do you stay in touch with what is happening with your apartment and your complex, and still have your say?
Good day, it is Andrew Murray here from Apartment Specialists. Today, we’ll be talking about what an owner can do to make sure that they know what is going on in the building. If they cannot attend the Annual General Meeting. What happens is, about two weeks before an Annual General Meeting, it will be announced. When it is going to be happening before that but they will send out what is called an agenda. The agenda will include all the topics that will be tackled at the Annual General Meeting. In this case, which I would have called April AGM. Which is also the abbreviation through this podcast.
In the agenda, we will know that they are going to be talking about the manager’s report. What has been happening in the year. Then they are going to be talking about certain decisions. For example, is there certain maintenance that needs to occur. An example maybe they are thinking about heating the pool and that is going to come at an extra cost to all the owners. Because it means it is going to have to be rebuilt and all that kind of thing. Everybody has to take a vote on whether they should or should not heat the pool.
There could be lengthy issues that need to be discussed – a whole host of things. So, this will all be in the agenda and it will be posted out to you or emailed. Therefore, whether you are going to attend the AGM or not, you can go open that agenda so you’re prepared for the AGM when it comes. Now, if you can’t make that AGM, there are two options. The first option is you can assign what is called your proxy, which means your vote to a friend, family or real estate agent.
Somebody you trust to go and represent your opinion at that AGM, and voice or vote however you want to vote. Or you can post in a proxy form, which fills out basically what your decisions are on what they call motions. For example, that pool which I mentioned before. What is your opinion on it? You may not live in the complex and you do not think it is going to increase the rent for your tenants.
Now, why should you have to pay for any of the pool if you are not going to use it. It is going to bring no benefit to you. Your opinion may be no and you would tick on that particular motion. Your decision is no and you may have something that you want to bring up because your tenants have been complaining about behaviour or noise in the complex, or the tidiness of the rubbish room. You want to voice that opinion, so you would put that in the proxy form.
Anyway, I hope that helps and to just let you know there is a system in place for you to be able to be heard and still keep an eye on what is going on in that Annual General Meeting. After the Annual General Meeting, what will happen is you will get posted out or emailed out the latest body corporate minutes. You can then read through what has been happening in your building. You can still keep up-to-date with what is going on.
If you have any questions just put a comment below or flick me an email to email@example.com.
Do you know what a Building Warrant of Fitness is? Why does your body corporate need to get one? Watch this video to know the significance of this certification.
Good day, this is Andrew Murray from Apartment Specialists. A lot of people are not aware that every apartment complex has to get a Warrant of Fitness. Just like your car, if it has got any systems that need to be in working order. It means it has to have a Warrant of Fitness each year. It is the owner of the building which is all the apartment’s owners or the body corporate, The body corporate is responsible to get a Warrant of Fitness every year.
This is to comply to the local authority, which is the council and also display it in the building. When you look in the apartment, you may see a Warrant of Fitness in the corner. It is usually in a frame and it will be something like this. For an example, this is one would be in the Citta Complex. You can see there is the address. You will see the basic details of the building and you will know when it was first constructed.
Basically, a single dwelling does not need a Building Warrant of Fitness, but if it has certain systems in place. Like when it is dealing with multi-unit dwellings. It needs to be indicated in a Warrant of Fitness. Does the building has automatic doors, sprinkler systems, or things like that? Does the building has a security system that are reliant on making sure that everybody is safe inside?
You can see it there if you have got automatic sprinkler systems, manual emergency warning systems, access controlled doors and so on. Obviously, passenger lifts. Having a lift means you are obviously going to need a Warrant of Fitness. So, it is important that the Body Corporate realises or the Owners’ Committee or as an owner, you realise that you are important. It is your responsibility to make sure that the building is up to standard so get its Warrant of Fitness. And that is displayed in the building and just like a car, if it fails, you have got to get it fixed. It iss pretty simple.
Here is another example, it is a one-pager and a Building Warrant of Fitness is, here is actually the person who inspects it. It is commonly called an I.Q.P., which is an Independently Qualified Person. Pretty self-explanatory really.
Anyway, I hope that helps. Andrew Murray, Apartments Specialists.
Are you planning to buy an apartment or already an apartment owner? Do you know what your key responsibilities or would-be responsibilities are? Andrew Murray will answer these questions as he enumerate nine main points every owner should do. Learn everything you need to know from this video.
What do apartment owners have to do? Good day, Andrew Murray here from Apartment Specialists. You are about to own an apartment. So what does that mean? What are your responsibilities?
It is really important you understand and it is pretty simple, but there’s a few you may not be aware of. However, you really need to know all of your responsibilities. Obviously, you need to learn it before you own an apartment. I’ve got my nine main points of the things you have to do. You can do more than that if you want to be part of the committee, so you’re more involved in running your building. But as an owner, if you just want to live in the building and do the bare minimum, these are the things you have to do.
Number one: Pay your body corporate levy and costs on time. Obviously, the money goes to the budget, which will run the whole building. If you don’t pay it you’re going to get penalised, but the big one is, you’ve got no vote. You have no say and you cannot actually complain or you can’t do anything. Make sure you pay your body corporate levy.
Number two: Adhere to the body corporate rules. These are things like you are not allowed to be washing on the balcony or don’t put washing on your balcony. Number two, if you’re not allowed to paint your balcony, which in most cases is a definite no. You do not go and paint the balcony pink, because your owners are not going to be very happy.
Number three: Make sure your tenants and guests adhere to the body corporate rules also. Realise that if you are renting your apartment out, you are the person in the firing line. If your tenants are not adhering to the body corporate rules, you are going to be liable. Make sure your tenants and your guests do.
Number four: Make sure your apartment does not affect the buildings of other apartments. What comes into this is, for example, structure. You cannot make modifications to your apartment that affect the structure of the overall building. Going back to what I said before, that is the reason why you cannot paint your deck pink. Because it is not going to make the whole building look very good. It affects the value of the building. There are other ways of looking at apartment complex and you got one balcony that is completely painted pink. The other ones are white and that is not going to look good.
Number five: Allow access to your unit, if the body corporate requires. This is an important one, because for example, a couple of times a year the body corporate has to do certain things like checks. Those checks have to be in place for you to get your insurance and your building insurance. Things like checking that all the fire alarms work, and you’ll have ones in your unit or the sensors for example.
Number six: Informing body corporate of your contact details for any changes. If something happens they need to contact you. For example, if the pipes from the unit above start leaking and they are going into your tenants apartment. They will need to contact you immediately.
Number seven: Advise your body corporate of your change of ownership. Generally, your lawyers can do that, so that probably comes in when you sell your apartment.
Number eight: If renting your apartment, you need to give them your property manager’s details. Now by law, if you have a contract for more than three weeks, you have to have a property manager. This is really important, because you are paying your property manager a fee, or a percentage of the rent. The manager will look after your apartment. You do not want the body corporate ringing you if there is a problem with tenants. Make sure you give them your rental manager’s details.
Number nine: I’m just going to go out and actually, I have already mentioned it before. Just remember, pay your body corporate levy otherwise you have no vote at your AGM. It is like you are not even part of the body corporate. I know I repeated that one there, but it is obviously the most obvious one.
I hope that helps. Obviously, you can get more involved in your investment, your apartment if you want to. I would highly encourage you to do so. I’m on various committees of apartments I own. Which is obviously, going to the committee, get involved in the day-to-day operations. It’s not that much work, but it’s about putting time back in and you will get a lot out of it. When you are involved in how to enhance your own buildings value and improvements.
Now I hope that helps, Andrew Murray from Apartment Specialists and talk soon.
In this podcast, Andrew Murray will discuss the administration of body corporate. What are the responsibilities of the companies that run them? He will also share his insights on why an owner’s committee often employs a company to administer the body corporate. All these and more from this video.
Running of a body corporate or what’s often called the administration of the body corporate. As an owner of an apartment, you automatically become part of body corporate. The body corporate then employs a company to run the administration of the body corporate. Basically, they do everything the owners decide or the owner’s committee with the chairman decide on what’s best for the complex or building or the apartments, then put that into action. This is where you hear about your Body Corporate Admin, your Crockers, your Strata and your First Street; those kinds of things. As you are looking at apartments, or looking for apartments, you will come across more of these different types of companies.
In basic terms, if you put it in a sentence, they are in charge of taking care of the administrative functions on behalf on the body corporate, the chairperson and the owner’s committee. Okay, I’m just going to talk about some of the key responsibilities.
They maintain a register of owners. That means you have got all those little details on file so you can be contacted. Because you often have many of the owners live in different apartment complex. This is very important as well as is distributing information about what’s happening in the building. Taking the minutes at each general meeting, so annual general meeting which happens every 12 months or 15 months by law.
Keeping financial accounts. That’s where your balance sheets come in and all that kind of thing. This is where owners can look at their body corporate and see how healthy they are. If they have got enough money in the to pay for X, Y, Z expenses and it’s going to happen next year, or things like that.
Now, it is the same thing on committee reports to owners. These reports on what’s happening in the building, what decisions have been made, and all that kind of thing. Also, for appearing and sending out resolutions for agreement by mail and notifying unit owners or partners of results. This is when decisions are made and you may have a decision that needs to be made that is, “Okay, should we make this decision on this term of action when it comes to repairing something.”
They may decide for some reason to go to postal vote, so they get sent out to all the owners. Big information, I vote. This will give option A, B, and C, I vote C, send it back and things like that. They are also in charge of, basically the original insurance evaluations, quotations, basing insurance in the system claims of apartment owners or complexes as a whole. This is very important because insurance is probably the biggest ticket item. I mean, it’s the biggest expense of the body corporate and of all the owners. So, that’s insurance for, required for fire, and all things like that.
They also need to tend to the, basically, general correspondence or communication with owners. Often, owners will deal with body corporate when they are selling. Obviously, when someone’s buying and becoming a new owner. General queries or questions they may have or any complaints if there are any, things like that. And also are expected to give general advice, expert advice to the committee and to the owners on the management, on how to manage a body corporate, which is down to things like maintenance plan, what’s called your LTMP and how to best address that.
What a body corporate does is, they are again in charge of the administration of the body corporate, which is doing all the bidding. I suppose, of all the owners, and they will charge a fee for that. And generally it’s a fee per unit. It ranges across the board from around about $150 to around $300 per unit. But that all changes because every complex is different, every demographic of complex is different, depending if it’s a lease on building or a rent on building, that kind of thing.
I won’t go into too much depth there, but hopefully it helps you understand firstly, because i.e. as an owner, you are the body corporate. What are these companies involved, we see these logos on the minutes and to just hit home that these companies aren’t your body corporate. The owners are and these companies do what the owners tell them and maintain and provide all the services. I just mentioned this. I hope that really helps you understand a little bit more about departments, unit and body corporate. I will talk next about as an owner and what’s expected from you?