Hi everyone, I am just wondering when a Body Corporate is first formed do they usually start with X amount of $$$ in the sinking fund? Or do they just start collecting fees from scratch? The reason I ask is I believe there is immediate repairs to gutters required (that the building inspection will no doubt reveal and a possible termite problem) Cheers in advance.
If it is a new building then there may be a building defects/warranty period.
The building is 20years or more old.
I was considering buying a unit and the agent told me that the Body Corp isn't sorted yet.
My knowledge on the subject is zilch.
Are Body Corp's similar to how Insurance companies run as far as they have money in their coffers already?
Maybe I should go Google it.Are you in Sydney? If so I think I know the deal. I'll assume it's the one I'm thinking of.
The new owners will have a meeting and decide on the Body Corp fees and will appoint a manager.
As there is no body corp there is no money. There's not a body corp money box. The money that's there is money that owners have paid. As there is no Body Corp no money has been paid. Owners will need to put an upfront amount to cover basics like admin etc. Any repairs will either have to be saved for or a special levy set to cover emergency things.The Body Corp will need to get a 10 year sinking fund analysis. This lets you know projected expenditure so allows you to set the sinking fund fees.
No, not Sydney.
Thanks for the Info.
I'm finding it hard to understand then why a Body Corp would take on this property if there's possible sinking/ ground movement issues that have caused cracking in most walls, termites nesting in the Besser block and possibly in the roof, rusted/ leaking guttering. I have just read that they're legally bound to fix repairs (i read some court cases as examples), so if the money box is empty then it will take a big cash injection from the property owners to get repairs done.
I've now been told Body Corp is $30.95 a week … Admin-$950pa, Sinking-$659.18pa = $1609.19pa … times 6 units = $9655.08pa ……………. ($3955.08 for the sinking fund) (mmmm not much!)
The units are VERY positive cash flow, but an empty Body Corp money box now worries me.
I haven't been told about an upfront cost either,…. more to think about!
Maybe I should see my Solicitor.
I think you are a bit confused.
The Body Corp is not a company that "take on" the building. There is a strata manager- they get paid a fee to collect the money, pay the cleaners etc (out of YOUR money).
The Body Corp are the owners (you). YOU have to fix/pay for the problems ie your fees pay for everything.
If there are serious issues I'd run away. The costs could be huge. It's not cash flow positive if you are putting thousands in to rectify problems.
Thank you for your time Catalyst
,Yes I was confused, thanks for clearing things up, I have done some research & understand now how the Body Corp' works.
Building & pest are booked to look at the property & give me a better idea of possible future costs.
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