Jul 24, 2017

Why Do You Need To Set Up An Owners Corporation?

Also known as body corporate, an owners corporation is a body responsible for managing the common areas of retail, residential, industrial, commercial or mixed-use property. Here, we’re going to look at some of the frequently asked questions related to the initial set up of an owners corporation. So, without wasting any time, let’s take a look at owners corporation set up.

Is Setting Up An Owners Corporation Required?

The first thing that you need to understand is that an owners corporation is automatically created if you register a subdivision plan and the plan creates common property. Setting up an owners corporation is not required by you. The only thing that needs to be performed is the activation of the owners corporation.

How Is An Owners Corporation Set Up/ Activated?

As mentioned earlier, an owners corporation is automatically created so the only thing required by you is activating the owners corporation. To activate the corporation, you must convene its first meeting within six months of the registration of plan. This is your responsibility as the applicant for registration of the subdivision plan that creates common property.

What Is My Role In Activating The Owners Corporation?

As the applicant for registration of the subdivision plan that creates common property, it is your responsibility to provide the following documents at the first meeting of the owner’s corporation:
·         The register of the owners corporation
·         Any records or accounts made on behalf of owners corporation
·         Copies of building plans and building contracts
·         Books that allow the owners corporation to maintain the necessary accounts, minutes and other records
·         The plan for maintenance (if any)
·         A copy of the subdivision plan and all related planning documents, building plans and other similar documents
·         A copy of the Subdivision Act 1988 and regulations under that act, a copy of Subdivision (Procedure) Regulations 2000, a copy of Owners Corporations Act 2006 and a copy of Owners Corporations Regulations 2007
·         Any leases, licenses, contracts that benefit or bind the owners corporation
·         The common seal of the owners corporation
·         Insurance policies relating to the owners corporation including insurance policy taken out under the Sale of Land Act 1962’s section 9AAA
·         Names of companies, suppliers and tradespeople who’ve provided a guarantee or warranty on any matter which is the responsibility of the owners corporation

There you have it—the complete list of documents that you need to provide during the first meeting of the owners corporation.

Final Word

You’ll need to hold an annual general meeting to activate your owners corporation. A good thing to do is sending out a notice to all members informing them about the meeting two weeks before its scheduled date. After activating the owners corporation at the annual general meeting, you may need to open a bank account in its name. However, you can only do that after proving that the corporation is a legal entity. Nevertheless, you now know how to set up an owners corporation.

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