Property investment tip 32: Do not always trust your Body Corporate or Strata Committee

Do not always trust your Body Corporate or Strata Committee

You immediately become a member of the Body Corporate (or Owners Corporation), when you buy a property in a shared building or complex.

All the other landlords in the same building and complex are also members of the Body Corporate. The Body Corporate is responsible for the daily property management and maintenance of the building and the communal areas.

Some Body Corporates consist of a larger number of landlords. In such instances, a Body Corporate Committee (or a Strata Committee) is formed so that a smaller number of elected landlords represent all the landlords.

You must understand how a Committee works before you buy a property and become part of one. That’s because the Committee controls how the funds, collected from the levies paid by all the landlords, is spent.

This also means the Committee members can either be your ‘best friend’ or ‘worst enemy’ when a big problem happens to your property.

Power struggles among the Committee members

In theory, a Body Corporate (or Strata Committee) is formed to represent the voices of all the landlord. The Body is led by a nominated Chairperson, Secretary and Treasurer. But, in reality, every landlord has their own agenda.

There more landlords there are, the more conflict of interest there will be.

Sometimes all the landlords in the same building or complex have equal voting power on every issue discussed at the Committee meetings.

But often, your voting power depends on the size of your property. The larger your property, the higher your levies are likely to be, so the more voting power you have.

I have an ongoing roof leak in one of my apartments. The Committee told me the problem would be fixed. Seven years later, I filed an official complaint against the Committee members because of their failure to maintain the roof top.

I’d mistakenly assumed the roof would be a major concern to everyone. But, no one cares about the roof because the leak is not damaging their apartments. People protect their own interests when money is involved. That’s why you need to be cautious when dealing with the Body Corporate (or Strata Committee).

Why you should not always trust your Body Corporate (or Strata Committee)

  1. Every landlord has an opinion on which problems are most important. Your problem will be addressed if the Committee agrees it’s important too.
  2. The nominated Chairperson, Treasurer, Secretary and the landlords with the largest properties often have the most decision-making powers. So your property or strata manager will always listen to them before you.
  3. Few members of the Committee have property management training. But they’ll always believe they know what’s best for everyone.
  4. All owners must pay their levies. But the Committee will often approve the budget to fix problems which are important to them first.
  5. Groups of ‘friends’ or ‘good neighbours’ can form alliances to strengthen their combined voting power … without you knowing. The voting system is not always fair.
  6. A disgruntled Committee member will often speak poorly of their peers to get you to side with them. You never know who is really telling the truth.
  7. A Committee member will be your ‘best friend‘ when you support their leadership. They can also turn into your ‘worst enemy‘ when you do the opposite.
  8. You are told your problem will be discussed at the next Committee meeting. But if the Chairperson does not think your problem is important, no one will be talking about it.
  9. No one cares if you pay your levies on time. You will not get favourable treatment.
  10. The Committee members will always want your proxy (a form which allows them to vote on your behalf). They do this to increase their own voting power.

You should attend the body corporate / strata meetings

To have your say, you must attend the Committee meetings. Befriending other landlords, even those who do not attend the meetings, is a good tactic.

Remember, a resolution will not be discussed unless most of the landlords vote in favour of your cause.

With the joys of property investing, comes the pain of dealing with the Committee members. It’s ‘survival of the fittest’. The dominant landlords get what they want. The weakest landlords fall behind.

So, do you trust your Body Corporate or Strata Committee?

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Hi, my name is Jude Little, also known as ‘Big Sister Jude’. I am a comic artist and a property investor. I bought my first property at 26 and ended up owning four properties in Australia and the UK by 30. I created this blog to help millions of people, like my little brother and little sister, who want to climb the property ladder but lack the knowledge and confidence on how to get there.

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