What exactly is a Body Corporate?

A Body Corporate is a legal entity comprised of all owners in the complex. Every lot owner in a community titles scheme is automatically a member of the Body Corporate.

Common Misconceptions

“The Body Corporate Manager sets the levies” – FALSE
Each year, the Body Corporate Committee agrees on a budget of projected expenses. The contributions (levies) are then calculated to meet the projected requirements as set out in the proposed budget. The levies and the budget are then considered at the annual general meeting (AGM), at which each lot owner has the opportunity to vote on the levies.

Prior to the AGM each lot owner is provided with an AGM notice, which is an invitation to attend the meeting and vote on matters effecting the Body Corporate. The AGM notice includes voting papers along with financial reports and budgets so that everyone can make informed decisions when voting.

In general, if an owner is unable to attend the AGM, completed voting papers can usually be submitted by email, post or fax to be counted at the meeting. A copy of the AGM minutes is later issued to each owner detailing the levies agreed upon for the financial year.

“The Body Corporate Manager is the Committee”- FALSE
Each year at the AGM the Body Corporate must elect a committee of at least three and no more than seven members to implement the decisions of the Body Corporate and act on certain issues in regard to the day to day governance of the Body Corporate. The Body Corporate Committee is made up of volunteer owners and the positions are Chairperson, Secretary, Treasurer and Ordinary Committee Member(s).

“Levies are paid to the Body Corporate Manager” – FALSE
All owners are required to pay Body Corporate contributions into both the administrative fund and the sinking fund. These contributions are collected in order to cover daily and ongoing costs for your Body Corporate.

The administrative fund is used to meet the day to day expenditure of the Body Corporate and examples of this may include the lawn mowing, electricity, insurance, and other routine items. The sinking fund is used to provide for future capital expenditure and examples might include mandatory repairs such as painting of common property and the replacement of fixtures on common property.

Body Corporate managers administer a bank account in the name of your Body Corporate. The Body Corporate contributions must be paid into this account and the Body Corporate expenses are paid out from it. The financial viability of the Body Corporate is therefore dependent upon the Body Corporate setting appropriate levies and owners paying their levies on time.


“How often do I have to pay levies?”
Depending on the financial structure of your Body Corporate, levies will be issued 2, 3, or 4 times a year and are usually due on the first day of the levy period. Levy periods and amounts are listed in the AGM notice and minutes.

“Why does my invoice include a Special levy?”
Just like administrative and sinking fund levies, special levies are also decided on at the AGM and details of any special levies will be included in the AGM notice and minutes sent to all owners. The most common reason for special levies are to make a correction to deficits in the funds of the Body Corporate or to undertake a significant and unforeseen capital project.

“Why does my invoice include an Insurance Reimbursement?”
Each year the Body Corporate pays the premium for the body corporate insurance policy. Each lot owner may be required to reimburse the Body Corporate with their share of the premium, either through an annual payment, or several instalments. The insurance policy is renewed every 12 months by a vote at the AGM.

“I’m a new owner. Why does my invoice include levies dated prior to my recent settlement?”
When you take ownership of a lot within a Body Corporate, you become liable for any and all outstanding Body Corporate levies. It should be noted that the Body Corporate is not involved in the purchase process. If you have any queries regarding amounts levied before you took possession of the property you would be advised to contact the solicitor who handled your purchase as they should have made adjustments at the time of settlement to cover payment of any outstanding levies.

“I’m a new owner. Why is the due date on my invoice so soon? Why has the due date already passed?”
Generally the original levy notice would have been issued to the owner recorded on the Body Corporate Roll at least 30 Days prior to the due date. However, either due to the timing of your purchase or receipt of your contact details you may have not been sent your levy notice at the usual time of issue. A levy notice is usually sent as a courtesy upon notification of your purchase.

“Why have my levies increased?
It’s not uncommon for levies to increase or decrease through the year. Depending on how often your levies are issued, the first (and sometimes second) contribution(s) of the new financial year need to be pre-approved at the previous AGM so that the first levy of the new Body Corporate financial year can be issued without delay, which ensures steady cash flow for the Body Corporate. When the new budget is calculated for the following AGM, any pre-approved levies are subtracted from the budget required and then divided between the remaining contribution periods. You will see evidence of any fluctuations in the levies by referring to the AGM notice and minutes. Rises in levies may also be caused by an increase in unforeseen expenditure.

“Why is my invoice due later than I expected?”
The levies are voted on at the AGM, which is usually held around the same time each year. On occasion, however, the AGM day might be later than usual. This sometimes means that levies may not be approved in time to issue for the usual date due. In order to provide owners with enough time to pay, the due date sometimes needs to be delayed to the 1st of the following month.

“Why are the levy figures on the AGM notice different to the amounts on my invoice?”
The levy figures listed on the AGM notice and minutes are usually listed on a per lot entitlement basis. Lot entitlements are set by the developer when the Community Titles Scheme is established and are set out in the Community Management Statement (CMS). Each owner can then calculate their own levies based on the figures listed in the AGM Notice.

“What is the Body Corporate Financial Year?”
The financial year period may not necessarily line up with the 1 July – 30 June Australian fiscal year. The financial year for your Body Corporate is based on the date of registration of the Body Corporate. For example, if a Body Corporate is registered during the month of October, then its financial year will be from 1 October to 30 September the following calendar year.

Content kindly provided by Strata Dynamics.