What is an Owners Corporation (OC)?
If you have never been involved with an Owners Corporation, it can seem a little intimidating but this is far from reality. In fact, there are many good reasons to purchase into an Owners Corporation, not the least being affordability for owner-occupiers and investors.
What is an Owners Corporation?
In some states, an Owners Corporation (OC) is known as a Body Corporate or a Strata Company. This is the legal entity that manages the common property in a multi-unit development. It could be residential, commercial, retail or mixed-use property development. It is made up of all the owners of the property.
When you purchase a unit – usually called a lot according to the plan of subdivision - in such a development, you automatically become a member of the OC. This gives you the authority to vote at Annual General Meetings and to have a say in how the building is managed and maintained.
What is Common Property?
Common property includes foyers, stairs, lifts, paths, fences, driveways, pools, gardens, fences, or any other shared facility designed for use by owners and occupiers.
All common property areas need to be repaired and maintained by all owners, which is why an Owners Corporation Administration Fund is set up to cover the expenses of common property maintenance. As a member of the Owners Corporation, you have a legal and financial responsibility to the owner's corporation to contribute your proportion of the expenses as set out in the Registered Plan of Subdivision or its equivalent in your state.
What are the obligations of an Owners Corporation?
Owners Corporation must:
- take out building reinstatement and replacement insurance
- take out public liability insurance
- collect levy fees from all the lot owners to fund expenses
- provide annual financial statements
- keep a log of all lot owners’ postal details
- have an owners corporation committee
What are the Benefits of an Owners Corporation?
There are many benefits to being part of an Owners Corporation such as:
- Costs are shared by all lot owners
- Work around the property is arranged through the Owners Corporation
- A good community environment and spirit is created
- Shared Gym/pool/spa services
A property maintained by the Owners Corporation increases your investment value by making it more attractive to potential buyers as they realise that they will not need to outlay extra funds for unexpected repairs caused by the lack of maintenance.
Urban can be a great research tool to fulfill your dream to invest in this market and to become an active member of an owner's corporation.
This piece was written by Con Vjero, Business Development Manager & Senior Owners Corporation Manager at AMK Owners Corp.
