Body Corporate Obligations

Maintenance

Properties that are registered as Community Titles Schemes (CTS) are either registered under either a Building Format Plan (formerly known as Building Units Plan) or a Standard Format Plan (formerly known as Group Titles Plan).

These types of plans determine the boundaries of common property and the lots in the scheme.

A Building Format Plan (BFP) is a type of subdivision that usually occurs within a building. The survey plans under a BFP defines the boundaries between common property and lots using the structural elements of a building; floors, walls and ceilings.

A Standard Format Plan (SFP) defines the boundaries of common property and the lots horizontally with reference to markings on the ground. Schemes that include townhouses, villas are usually registered under a SFP.

The maintenance responsibilities between Bodies Corporate and individual lot owners are defined in relation to the type of survey plan they are registered under.

Maintenance Responsibilities under a BFP

Body Corporate Responsibilities:

• Outside of the building including; exterior doors, windows and balcony railings on the boundary of the lot.
• Gardens and Lawns on common property
• Foundations of the building
• Roofing Structures, roofing membranes that provide protection for lots and common property
• Essential supporting framework, including load bearing walls
• Doors, windows and their fittings located in boundary walls and garage doors and their respective fittings.
• It has additionally been determined that waterproofing membranes on balconies are Body Corporate responsibility.

Lot Owner Maintenance Responsibilities:

• Door and Windows that lead onto a balcony that forms part of the lot;
• Kitchen, bathroom and bedroom cupboards;
• Sinks, dishwashers, garage disposal units, shower screens and shower trays.
• Fittings and fixtures installed by the lot owner for their own use
• Areas whereby the lot owner has exclusive use to a part of common property or asset of the Body Corporate.

Maintenance Responsibilities under SFP

Body Corporate Responsibilities:

• Common Property including; roads and gardens
• Elements of utility infrastructure that are common property; water pipes or cables that service more than one lot
• Guttering and downpipes which span across more than one lot
• Television antenna that services two more lots

Lot Owner Responsibilities:

• Water pipes and cables located within a lot boundary and services their lot only
• Guttering and downpipes servicing within a lot boundary and services their lot only
• Their lot including; gardens and lawns within the lot boundary
• Their building including; painting, exterior walls, doors, windows and roof
• Building foundations and roof to the extent of being within their lot boundary

Painting

Under a SFP plan the Body Corporate and Community Management Act specifically provides that lots and consequently the buildings on the lots are the individual lot owner's responsibility to maintain. The Body Corporate can not budget for painting in their sinking funds, raise levies for painting or pass by-laws or motions to enforce painting to become a Body Corporate expense.

However the lot owner is required to maintain their lot in a clean and tidy condition. Therefore it could be determined by failing to carry out painting adequately that the lot owner has failed to maintain their lot.

However a Body Corporate can offer to supply a service by way of entering into a contract with individual lot owners in regard to maintenance.

Dividing Fences

The legislation that governs the maintenance and erection of fences is the Dividing Fences Act 1953. In reference to this Act the owner of community titles scheme is taken to be the Body Corporate. The Body Corporate and Community Management Act does not specifically address the responsibility requirements for maintenance of fences.

The perimeter fence of the scheme land is a shared responsibility of the Body Corporate and the property owner of the adjoining property. This is irrespective of whether the scheme is registered under a Standard Format Plan (SFP) or a Building Format Plan (BFP).

Dividing Fences within the scheme land are determined to be maintained in the following way:

• A dividing fence between common property and a lot is a shared expense of the owner of the lot and the Body Corporate
• A dividing fence between two lots is an equal contribution between the two lot owners

Insurance

Generally speaking the Body Corporate must insure the common property in the scheme, the Body Corporate assets and the buildings in which lots are located. The terms of responsibilities between lot owners and the Body Corporate are determined by the type of survey plan e.g. Building Format Plan (BFP) and Standard Format Plan (SFP).

A BFP scheme requires that building insurance is effected for the full replacement value of each building which contains a lot. A SFP scheme requires the same for any building that contains a common wall with a building on an adjoining lot.

The Body Corporate policy must cover damage and the costs associated with the re-instatement or replacement of insured buildings. This includes the costs associated with removal of debris and the fees of the professionals consultants involved. It must provide that the re-instatement of the property is to the condition it was in when it was originally built.

A building includes improvements and fixtures but does not include:

• Carpet
• Appliances that are not wired or plumbed in
• Internal window coverings
• Air conditioning units servicing a an individual lot
• Temporary wall, floor and ceiling coverings

In an SFP the Body Corporate may elect to set up a voluntary insurance scheme covering buildings that do not have a common wall with a building on another lot. Participation in this policy is voluntary and not legally enforceable. If an owner in a stand alone building elects to take part in a voluntary insurance scheme, the owner would be required to:

• Notify the Body Corporate of the replacement value of the buildings to be insured
• Comply with the terms in the policy of insurance cover.

The Body Corporate also has an obligation to take out public risk insurance over common property and for assets which pose a risk to the public. The policy must cover the liability of compensation of death, illness, injuries and damage to common property as a result of the event. The requirements for the sum insured are:

• A minimum of $10 million for a single event.
• A minimum of $10 million for a single period of insurance.

Other insurance policies commonly taken out by Bodies Corporate include; office bearers liability cover, Fidelity Guarantee, Catastrophe and Voluntary Workers.

Premiums

• Common Property
  Insurance for the common property and the Body Corporate assets is a proportioned in accordance with by the "Interest lot entitlement" for each lot. This method is used for both the BFP and SFP schemes.
• Building Insurance:
  BFP - is appointed according to the interest lot entitlement for each lot.
• SFP - building with a common wall with another lot; apportioned according to the cost of reinstating the building on the lot.
• SFP - voluntary insurance schemes; apportioned according to the valuation of the stand alone building in relation to the total replacement value of all the stand alone buildings. Plus any lending for additional risks relating to  the current and future activities on the owner's lot.

Other factors need to be considered in the amounts payable by a lot owner; e.g. improvements made to a lot, improvements made to common property and the use of the lot.

Improvements to a lot include; fixtures and fittings that form the lot at a higher standard than the lots generally and when it is reasonable to assume that the improvement will increase the premium.

The use of the lot must be considered if it is reasonable to assume an increase in the premium for reinstatement. An example of this situation would be in a commercial scenario with a lot storing combustible materials and the impact in damage this could cause. In this case the lot owner would be held responsible to pay the additional or increase of expense in the premium.

Bond Excess
When a Body Corporate has insured a building for full replacement value the option of policies with an excess provision is allowed. The method for applying the cost of the excess is regulated under the BCCM Act and the relevant regulation module. In the case of when an insurable event occurs and affects only one lot in the scheme the Act allows for the excess to be applied directly to the owner, unless the Body Corporate determines that this would be unreasonable.

Replacement Cost Estimates
When the Body Corporate is required to insure one or more buildings in the scheme for full replacement value then it must, at least every five years, obtain an independent valuation report.

The value from this report and the date it was obtained is required to be attached with the Annual General Meeting notice. Such a valuation must be obtained under the new provisions by the 30th August 2009 unless it has already prepared a valuation between 31st August 2004 and 1st September 2008. If it has been prepared in this period than the 5 year applicable timeframe commences from the date of the report.

Workplace Health and Safety Act 1995 Obligations

The Workplace Health and Safety Act 1995 (as amended) places an obligation on any person or group of persons who control or are responsible for a workplace to ensure freedom from the risk of accident or injury or disease not only to themselves but also any other person including employee, subcontractor, visitor, guest or non-employee who enters that workplace.

It also defines a workplace as "any place where work is, is to be, or is likely to be performed by a worker, self-employed person or employer". Therefore Bodies Corporate, who have accepted as a group the responsibility for the common areas of the premises, must ensure the safety of persons entering those premises. A person who breaches an obligation can be prosecuted. The maximum penalties are substantial.

To protect the Bodies Corporate against penalties imposed by this legislation, in the event of an injury occurring to a person whilst in the common areas, Committees should seriously consider the development and implementation of a workplace health and safety hazard identification and control programme which is relevant to individual schemes. This can be undertaken by one of the following options:

• A member of the Body Corporate may undertake the responsibility of ensuring that the Body Corporate is complying with the Workplace Health and Safety Act.
• The Body Corporate may enlist the services of a Workplace Health and Safety Officer or a qualified external consultant to conduct regular audits and provide a written report.
• The Body Corporate may appoint the Resident Manager (if appropriately qualified) to ensure that the Bodies Corporate responsibilities are being met.

The Body Corporate should acknowledge however, that even with the appointment of a person to carry out these duties on its behalf, the Body Corporate will retain ultimate responsibility for any accident or injury which may occur in the common areas of the building.

BACK TO HOME

Take the Test

You must be registered and logged in to take the test.

Click here to register. If you are already registered, login here:

Email Address:
Password: