The Pros and Cons of a Body Corporate in Victoria
In Victoria, body corporates – also known as owners corporations – are essential to the management of multi-unit residences. A body corporate is essentially a committee of owners who are in charge of overseeing financial management, maintaining common spaces, and making sure residence rules (usually called bylaws) are followed, using regular fees paid by owners.
In most cases, the owners appoint a separate strata manager to handle the property.
Living in a body corporate has benefits and drawbacks. If you find your dream apartment, unit or townhouse, you won’t have a choice about whether it’s self managed or run by an owners corp, but here are a few things to keep in mind.
Benefits of Body Corporations
1. Share maintenance costs
In a body corporate, all owners share responsibility for maintaining common spaces like gardens, pathways and shared hallways. In fancier complexes, there might also be a swimming pool, communal barbecue area, gymnasium and even a movie screening room. The more maintenance common spaces need, the higher you’ll probably pay in fees.
2. Live in a community
A sense of community is commonly felt by those living in a body corporate. There are chances for social contact and interraction among the residents, which can result in enduring friendships and a positive atmosphere. Frequent get-togethers and activities can improve these communal bonds even further.
3. Safety aspects
More common in newer dwellings and apartment buildings, enhanced security features including gated access, video cameras and on-site supervision are often seen at body corporate sites. Residents can feel more at ease with this extra security, particularly in metropolitan regions where people are concerned about their safety. You can also add to this the ‘neighbourhood watch’ effect of residents with a shared interest in security.
4. Get into the market
Body corporate flats are a cost-effective way for many people to get into real estate. They are appealing to investors since they can generate strong rental returns, and popular with first-time homebuyers due to their cost and location (often close to shops and transport). Furthermore, properties in prime locations with good management can increase in value over time.
The Drawbacks of Body Corporates
1. Strata charges
Body corporate expenses can be substantial even when sharing costs between owners. The annual rates for the complex might vary from $1,000 to over $10,000, depending on the size, layout, security and other amenities. While this is almost always much cheaper than rent, living in a body corporate can become even more expensive as costs rise over time.
2. Less control
The limited control owners have over decisions about common facilities and management is one of the biggest drawbacks of living in a body corporate. Many decisions are made in groups, which may not always reflect the requirements or preferences of each individual.
Rules are common regarding external painting and decorating, garden planting, pets, renovations, use of shared amenities and more. Frustration might result from this lack of control, especially in larger complexes.
3. Possibility of conflicts
Owner disputes are not unusual in body corporates. Bylaw violations, maintenance obligations, and noise complaints are all potential sources of conflict. Even while most conflicts are settled amicably, some may progress to formal mediation or even legal action, especially if there is a breakdown in communication.
4. Management issues
Quality of life can be significantly impacted by the body corporate management’s efficacy. Unresolved conflicts, financial mismanagement, and neglected common areas can all result from poor management. Owners must continue to be involved in and knowledgeable about the operations of their body corporate.
Do Your Research
With around 60,000 body corporates operating in Victoria, anyone thinking about buying an apartment in a body corporate needs to be across the bylaws, fees, and management procedures. Contact the strata manager and speak to other residents about how things operate at the property. You’ll have a better experience if you can navigate the challenges of community living with the assistance of the body corporate.
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Whether it’s a body corporate or a property on its own title, we get you in faster and easier.
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Marc has been a professional lender for 28 years. After beginning his career in 1990 with a UK Building Society, he moved to Australia where he held several different retail banking roles. In 1999 it became clear to him that a mortgage broker would eventually become an obvious choice for someone looking for a home loan so he took the plunge and became an independent broker. He hasn’t looked back since!