How Governance of a Body Corporate Works
Posted by apm on April 16, 2024 Body Corporate, Company News, News, Uncategorized
Ever wondered how a Body Corporate works? How are decisions made? Who decides to enlist the services of a property management company? Read on to learn all about Body Corporate Governance.
If you are living in, or own a property within a Body Corporate it’s important to know how they are structurally organised.
Whether you are a Chairperson, a Committee Member, or a regular Body Corporate owner then check out the below diagram explaining some unique features of Body Corporate governance that all owners need to know about.
The Unit Titles Act 2010, the Unit Titles Regulations 2011, and the Unit Titles (Strengthening Body Corporate Government and Other Matters) Amendment Act 2022 work in conjunction with one another. These are the Legislative frameworks that govern how a Body Corporate is to operate.
A Body Corporate is formed by the Developer and the title for the whole property is lodged with Land Information New Zealand (LINZ).
The Developer initially is the decision maker for the Body Corporate and then this responsibility is passed to the owners as the units are sold. Sometimes, for a period of time the Developer will stay involved until all properties are sold and the new owners have elected a chairperson and committee members.
The Body Corporate (all owners) meet at least one time each year at an Annual General Meeting (AGM). At the AGM they delegate the powers and duties of the Body Corporate and the Chairperson to the Owners Committee.
The Rules are initially drafted by the Developer and lodged with LINZ, these can be changed by the Body Corporate at a general meeting. These are generally day to day living rules such as a pet policy, parking policy, washing etc. Any rule must be drafted in conjunction with the Unit Titles Act and cannot be anything that goes against the Law.
Once the Body Corporate is formed the Developer generally appoints themselves to be the Chairperson. Once the properties are sold a general meeting is held and a formal election of a Chairperson is undertaken – They must be a registered owner.
A Body Corporate is governed in between the AGMs by a Committee elected once a year. The Committee is made up of numerous Owners and make important decisions regarding the day to day operation of the Body Corporate.
After the AGM the Committee is responsible for ensuring actions agreed at the meeting are undertaken, they work closely with their Body Corporate Manager and/or Building Manager on many of these day to day tasks.
The Body Corporate (Developer or Owners) decide on who the Body Corporate Management Company will be. Once appointed the Body Corporate Manager will work for all the Owners in a Body Corporate as a whole, and will take instruction from the Chair/Committee for the running of the Body Corporate.
Managers complete administration tasks such as organising AGMs, arranging insurance quotes, emergency repairs, building issues, and raising and collecting levies. Ideally the Body Corporate will have a detailed Service Agreement with the Body Corporate Management Company.
The Body Corporate (Developer or Owners) decide on who the Building Manager will be and once appointed they will be responsible for the physical running of the building.
The work they undertake is outlined in a management agreement depending on the work required or building specifications/requirements. Sometimes they are onsite full time or just onsite for set periods of time, but they oversee such things as maintenance, compliance, contractor management (gardeners etc), and coordinate the key and security access needs of Owners and Tenants.
Appointed often by the Developer at the start then by the Committee and Chairperson. These companies are instructed by the Body Corporate Manager or Building Manager at the direction of the Chair/Committee to provide services to the Body Corporate such as:
Insurance, Cleaning Services, Fire Protection, Lift Servicing, Power, Water, Ground Maintenance, Building Wash, Rubbish/Recycling Collection.
From our perspective, you can see that we are generally involved in a few elements of a Body Corporate but our bottom line is that we are not an owner; we work for all Body Corporate Members and we offer independent professional Body Corporate Management solutions.
If we can be of any assistance to you or your Body Corporate, please feel free to contact us on the form below.