Introduction
Most of us have a general understanding of the rights and responsibilities of land owners in the ACT where the property concerned is standard housing. That is, a block of land with a single (or in some cases a multiple) residential dwelling.
However, what of the other form of residential property, which is not altogether individual in nature, e.g. groups of flats, units and townhouses, which share a common block of land?
The nature of the title of these properties and the rules relating to it are contained in the Unit Titles Act. In essence, the Act contains the rules, which apply to this form of communal living.
People from interstate, should note that the term “Unit Title” in the ACT is almost synonymous with the term “Strata Title” in the States.
This to assist prospective purchasers of Unit Title property by providing a background of the responsibilities of Body Corporates and Unit Title property owners. It is not meant to be definitive document and is by no means a substitute for the Unit Titles Act. The Act is downloadable at
Website:
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Why have Unit Title?
Whenever people share ownership of anything, there is a need for established rules. In the case of unit title developments, various individuals own their units and they share the ownership of the common land. All owners therefore have shared responsibilities related to that land, and its maintenance. The Unit Titles Act provides the rules for these owners to exercise their joint responsibility through a Body Corporate. The Body Corporate is commonly referred to as the Corporation.
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What is my unit and what is common property?
All unit title properties within the ACT fall into one of two categories. They are either A type units or B type units. The distinction is that each member of the Corporation had different responsibilities for repairs and maintenance.
With a Class A units, the member is responsible for the repair and maintenance of the part of the walls, floor and ceiling within the unit. Usually, multi-story buildings such as flats or an office block are Class A units. In Class B units, the member is responsible for the repair and maintenance of everything located on the area of land. Usually, a townhouse is a Class B unit.
Class A boundaries are the mid-point of the exterior walls, floors and ceilings, whereas Class B boundaries relate to the surveyed line surrounding an area of land.
If you have any questions about boundaries of the property when buying you should consult your solicitor.
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What is the Body Corporate?
The Body Corporate comprises all the registered owners of all the units in the Units Plan. The Body Corporate, through its Committee, has the power and responsibility to administer and maintain the land, stairways, entrances and paths, i.e. all those parts of the property, which have common ownership. These parts are generally termed “the common property”. In addition, the Body Corporate ensures that the affairs of the development are conducted in accordance with the Articles set out in the Schedule to the Unit Titles Act. The Articles are referred to as “the rules”. Articles refer, among other things, to structural alterations and the keeping of pets.
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Does the individual have responsibilities?
There is an individual responsibility to maintain your own unit and to pay all rates and levies on time. It is most important that you attend all meetings either in person or by proxy. The more positive the involvement of individuals the better managed will be the development. Thus the more attractive will be your property should you wish to sell it in the future.
The best run Body Corporates are those in which all the registered owners take an active interest. If you live in your unit, you will easily be able to assist your Committee and fulfil all your obligations as a registered proprietor
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How does the Body Corporate function?
The Body Corporate functions through a series of General meetings and Committee meetings. Each year at the Annual General Meeting, a Committee is elected to exercise the day-to-day administration of the Corporation. In most cases, the Body Corporate engages the services of a Real Estate Institute member to assist in the management. Through the manager, the Corporation exercises the following functions:
• notices for meetings
• financial management
• repairs and maintenance of common property
• enforcement of the articles where necessary
• secretarial support
• maintain details of ownership and occupancy
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What are the costs?
Each year a draft budget is presented to the owners. This draft budget covers the costs of administration of the development for the following year. The budget is approved by the membership at the AGM and because of this approval, the manager strikes a levy for payment by the owners. Generally, levies are paid quarterly. Levies cover the following standing costs:
• repairs and maintenance
• insurance
• management
• excess water rates
• power for common areas
• cleaning
• gardening
The funds collected are maintained in a bank account and the books of the operation are available for the inspection of owners. Formal financial statements are presented at each AGM.
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What is my share of the costs?
Generally, costs are shared on the basis of what is known as the “Unit Entitlement”. This is a figure, which represents your proportion of the total development. It is established at the outset of the development and recorded as part of the original units plan.
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Insurance
The Body Corporate arranges insurance for the building, public liability for the common property and workers’ compensation. Each proprietor should insure their own contents and as a safeguard it is advisable to take out a public liability policy for the inside of the unit.
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If I intend to rent the unit, do I have any additi
Yes. You should advise the Body Corporate of the names of the occupants at all times. Ensure that the tenants observe:
• the tenancy agreement (“the lease”) and,
• the Body Corporate articles and house rules, if any,
• Moreover, you should continue to attend meetings or vote by proxy.
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New developments
When a developer builds a Unit Title development, he/she is the original proprietor of all the units. The developer conducts the inaugural meeting on the day of registration of the Unit Plan and sets the budget. When the units are first sold, the new registered proprietors attend the first AGM where the budget is set for the following year.
It is important to remember that you purchased the unit from the developer – not from the Body Corporate. Avoid using the first AGM as a forum for airing any problems you may have with the unit. These should be addressed to the developer. Usually there is a maintenance clause in your contract of sale to cover just this type of problem.
The first AGM takes place within six months of registration of the Units Plan. You should attend this meeting as a matter of priority.
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Where do I find "the Articles"
The Articles are attached as a Schedule to the Unit Titles Act.
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Finally
Unit Title is an accepted form of Title in the ACT and the procedures for the management of Bodies Corporate are well documented and established.
You should however, use a solicitor in the same way you would if you bought a house.
To ensure your Body Corporate succeeds in its tasks you should:
• take a positive interest in the business being conducted, and
• abide by the Act, Articles and house rules.
It is your investment and these rules are designed to help you protect it.
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