How does a Body Corporate work?

Is Body Corporate and Unit Title the same

How does a Body Corporate Work?  |   Read Time: 6 Minutes   |   December 2021

How Does A Body Corporate Work?

If you’re new to Body Corporate living there’s a lot to learn about how Body Corporates work, and what being part of a Body Corporate means. In fact, it’s entirely possible you’ve bought a unit or apartment but you’re still unsure what a Body Corporate is, and you’re wondering why you are receiving Body Corporate meeting information and fee breakdowns. We’ll explain how it all works in this article.

What Even Is A Body Corporate?  And How Did I Become Part Of It? 

The body corporate is a legal entity that exists to own and manage the common property within a unit titled development A unit titled development is one created under the provisions of the Unit Titles Act - that is, a developer has taken a piece of land, and built something that is divided up into more than one unit Some of the parts of the thing that is built exist to serve more than one unit – like lobbies & hallways, lifts, shared gardens, pools, lounges, shared walls, the external walls (or ‘the building envelope’) – and this is called ‘common property’ The body corporate is the entity which is responsible for this common property Every owner of a unit within the body corporate is a member of the body corporate.   

The body corporate has to pay the costs of servicing, maintaining and insuring the common property, and it does this by raising levies on its members – the owners of those unit titled parts of the body corporate.   

If you’re the owner of a unit or an apartment in a unit titled (also known as a ‘strata titled’) property, you automatically become a member of your Body Corporate. The members of the body corporate meet annually to elect a Body Corporate Chairperson and a Body Corporate Committee to take charge of the Body Corporate between general meetings. The committee follows the directions given to it at a general meeting. If major issues crop up, the chairperson will call an extraordinary general meeting, so everyone has a chance to get together and discuss the issue.

Is Crockers the Body Corporate? 

A common misconception we’ve found is that owners think Crockers is the Body Corporate. In fact, our role is to act as a contractor to the Body Corporate, meaning that we provide you with services and advice as well as a few added extras.  

You and your fellow owners are the Body Corporate and the decision-making power is solely in your hands. 


Can I 
Opt Out?
 

Simply put, no you cannot. Being a member of a Body Corporate isn’t an optional arrangement – if you own a unit in a unit titled development, you’re automatically a member, with all the rights and responsibilities that come with that. Your membership doesn’t stop until you sell the property. 


What Does the Body Corporate Actually Do?
 

There are a huge number of things that a Body Corporate may do, but the things that the Unit Titles Act 2010 says that it must do are:

  • Hold an annual general meeting, otherwise referred to as an AGM
  • Insure all the buildings and other improvements on the land (excluding contents)
  • Keep the common property and building elements in good order
  • Carry out the functions detailed in the rules
  • Raise enough money to meet its obligations by working out its costs, and then raising levies payable by owners based on that total.
  • Have a long-term maintenance plan
  • Have a Body Corporate chairperson.  

The Body Corporate of course has rights and responsibilities in respect of common property and the building elements– meaning that the funds in your Body Corporate can’t be used for private property matters. ‘Private property’ refers to property within a Principal Unit – that is, inside your own home.

What Are My responsibilities? 

As a member of the Body Corporate, you have a few responsibilities to take care of from time to time.  The key things you must do are: 

  • Make timely payment of all Body Corporate levies  
  • Comply with the Body Corporate rules  
  • Maintain your unit so that the value of other surrounding units or the common property is not affected (this may mean that you need to seek the permission of the body corporate before changing certain things about your unit, especially when something you want to change is on the boundary of the common property and your unit – such as making penetrations in the cladding for heat pumps etc).    
  • Allow the Body Corporate access to your unit at all reasonable times for any of the reasons listed in the rules (these will be for matters related to the building’s ongoing safety, functionality and compliance) 
  • Keep the Body Corporate informed of changes in your contact details
  • Advise the Body Corporate of any changes in ownership of the unit
  • Advise the Body Corporate of your New Zealand based agent if you rent your unit and are away from New Zealand for longer than three weeks.
  • Ensuring that you comply with the provisions of the body corporate’s insurance policy and do nothing to invalidate it, such as storing dangerous materials in your unit.

The Importance of Paying Your Body Corporate Levies  

A body corporate has to collect, each year, all of the money it needs to pay all of its costs (the largest of which is usually the insurance premium) The only source of money available to a body corporate is its members – that is, you – and the only way it collects money is by raising levies on its owners.  If owners don’t pay their levies, the bills can’t be paid – it’s as simple as that.   

To recognise the importance of this issue, if you haven’t paid what you owe the Body Corporate when a general meeting is held, then you won’t be allowed to exercise your vote. This means that if you haven’t paid your vote won’t count, so it’s important to check that your account is up to date well before each meeting.  

You must still pay all your levies even if you dispute the amounts. Payment doesn’t take away any rights to continue with a dispute you may have with the body corporate about your levies.  Disputes between the body corporate and members can be taken to the Tenancy Tribunal (NB:  fees do apply).

How Can I Prepare For My First AGM? 

A Body Corporate must hold at least one AGM every year. It’s a good idea to understand the process before you attend your first meeting. Read our tips on how to prepare for your AGM.

What If I Don’t Understand the Language Used? 

You may feel out of your depth with some of the language used within a Body Corporate. We’ve put together this handy list to help you understand the jargon of body corporates. 

Learning More  

Crockers realise that this is a complex area to get your head around, and we do our best to help new owners within our body corporate community to navigate their way through it.  We run regular webinars for owners on topics like ‘Body Corporate Basics’, ‘Insurance in a Body Corporate’ and ‘Healthy Homes in a Body Corporate’.  Owners can listen in, submit questions, and re-listen to recordings later as well.  If your provider doesn’t have these services, get in touch with our helpful Body Corp Community Living experts on 09 968 3311 or email bc@crockers.co.nz

Body Corporate assistance