Hi
Im looking for some guidance..
Im investigating purchasing a block of units in one line from a single vendor. They are already strata titled and im looking at selling some of the individual units.
Im currently not sure if there is a body corporate already setup and am investigating this with the REA.
If the body corporate is not setup does anyone know the process and costs in relation to setting up the body corporate ?
Thanks
Rachel
Hi
Depends what state you are in. If NSW, and the vendor is the owner who strata titled, it s unlikely there will be an owners corp actively set up yet. This has to be arranged once a minimum of one third of the unit entitlements are sold eg if there are 6 units, and they each have the same unit entitlement, then if you sell 2 you need to activate the owners corp. This means, by onselling the units to you, technically they are responsible for establishing the owners corp, which is done as below. In reality though, as the new sole owner, you would only be consulting with yourself on matters such as budget etc, so very little action would be required until you then start to sell off the units.
This is quite simple, Select a strata management firm, or ask your solicitor if they can recommend one if you are not sure. They will charge a fee of perhaps a few hundred dollars to set up the books and records and handle the affairs on your behalf up until the 1st AGM. You will need to give them certain records eg copy of strata insurance policy which should have been taken out when strata plan was registered, certain plans and documents relating to the building, and the original owners’ details. Depending on the age of the building, some of the info may not apply.
The strata manager will establish a strata roll, will prepare a proposed budget, and once a third of the UE’s are sold off they will call and run the 1st AGM, at which time the owners will decide if they want to appoint a strata manager, or self manage. At or prior to this meeting, the manager should also explain to owners about common property, and their responsibilities.
Your sole responsibility ends at that meeting, and from then on the owners corporation is responsible for all common property matters. Levies will be collected to cover owners corp expenses. You will be a part of the owners corporation. As each unit sells, the manager will also supply sect 109 certificates to your solicitor, which details insurances, levies if struck yet, contact details for the owners corp, committee members and other legally required information.
You may find that much of the set up has already been done. If not, the cost is minimal, and can be done quite quickly.
It is essential that you ensure that the strata insurance is providing adequate building cover, as this is often dangerously underestimated, and an insurance valuation for approx $165 is a wise investment, even if you still own them all.
Feel free to contact me if you wish to discuss this further.
Regards
Wake
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