Body Corporate (Strata and Community Titles)

In Australian property law, a body corporate is the legal entity created when land is subdivided under a community titles or strata scheme. It is made up of all the lot owners in the scheme and exists to manage and maintain the common property — the shared areas like driveways, lobbies, lifts, pools, gardens, and structural elements of the building.

The term “body corporate” is used in this sense in Queensland, Tasmania, and the Northern Territory. Other states use different names for the same thing: “owners corporation” in Victoria, New South Wales, and the ACT; “strata company” in Western Australia; “strata corporation” in South Australia (under the Strata Titles Act 1988) or “community corporation” (under the Community Titles Act 1996).

A strata body corporate is one specific type of body corporate — the broader legal term for any incorporated entity. Every strata body corporate is a body corporate in the legal sense, but not every body corporate is a strata scheme.

How a strata body corporate is created

A strata body corporate comes into existence automatically when a plan of subdivision (called a strata plan, survey plan, or community management statement depending on the state) is registered with the relevant land titles office. There is no separate registration step — the act of registering the plan creates the body corporate and makes every lot owner a member.

When a person buys a lot in a strata scheme, they automatically become a member of the body corporate. They cannot opt out of membership while they own the lot.

What a strata body corporate does

The body corporate manages common property on behalf of all lot owners. Its core functions are:

• Maintaining and repairing common property, fixtures, and building services
• Taking out and maintaining insurance (typically building insurance, public liability, and workers’ compensation if it employs staff)
• Setting and collecting levies from lot owners to fund administration and capital works
• Enforcing the scheme’s by-laws
• Keeping financial records and preparing annual financial statements
• Maintaining a roll of lot owners

Decisions are made by the lot owners at general meetings (annual general meetings and extraordinary general meetings) and by the committee between meetings.

The committee

The body corporate committee is elected by lot owners at the annual general meeting. It handles day-to-day decisions between general meetings. Committee members have duties similar to directors of any other organisation — they must act honestly, in good faith, and in the best interests of the body corporate.

The committee typically includes a chairperson, secretary, and treasurer. The chairperson runs meetings and manages the voting process. The secretary handles notices, correspondence, and minutes. The treasurer oversees the body corporate’s finances, including preparing budgets and financial statements.

Body corporate managers

Many bodies corporate engage a professional body corporate manager (sometimes called a strata manager) to handle administration. The manager is appointed by the committee and performs administrative tasks on behalf of the body corporate — issuing levies, arranging maintenance, keeping records, and preparing meeting documentation.

A body corporate manager is a service provider, not a decision-maker. The committee and the lot owners retain decision-making authority. If a manager fails to meet their obligations under the management agreement or the relevant legislation, the committee can terminate the appointment.

Body corporate fees

Lot owners pay levies (also called contributions or body corporate fees) to fund the body corporate’s operations. Fees are typically divided into two funds:

Administrative fund. Covers day-to-day costs such as insurance premiums, management fees, utilities for common areas, cleaning, gardening, and minor repairs.

Sinking fund (or capital works fund). Covers major repairs and long-term maintenance — painting, roof replacement, lift refurbishment, and other significant capital expenditure. Most states require the body corporate to prepare a sinking fund forecast or maintenance plan.

The amount each lot owner pays is usually based on their lot entitlement, which is set out in the community management statement or strata plan. Lot entitlements are generally proportional to the relative value or size of each lot.

For lot owners who rent out their property as an investment, administrative fund levies are generally tax deductible in the year they are paid. However, special levies for capital works are not immediately deductible and must instead be claimed as a capital works deduction spread over 25 or 40 years.

Common property vs lot property

The strata plan or survey plan defines the boundaries of each lot and the common property. As a general rule:

• Common property is everything outside the boundaries of individual lots — lobbies, corridors, lifts, stairwells, pools, gardens, driveways, external walls, and the roof. The body corporate is responsible for maintaining it.
• Lot property is the individual unit or townhouse within its defined boundaries. The lot owner is responsible for maintaining it.

Whether the body corporate is responsible for something like a balcony, internal plumbing, or a window depends on where the lot boundary falls in the strata plan. This varies between schemes and is a common source of disputes.

State and territory legislation

Each state and territory has its own legislation governing strata and community titles schemes:

Queensland. The Body Corporate and Community Management Act 1997 (BCCM Act) and related regulation modules. The Office of the Commissioner for Body Corporate and Community Management provides dispute resolution and guidance.

New South Wales. The Strata Schemes Management Act 2015 and the Strata Schemes Development Act 2015. NSW Fair Trading operates a Strata Hub for owners and committees.

Victoria. The Owners Corporations Act 2006 (substantially amended in 2021). Consumer Affairs Victoria provides guidance for owners corporations.

South Australia. The Strata Titles Act 1988 and the Community Titles Act 1996.

Western Australia. The Strata Titles Act 1985 (reformed in 2020).

Tasmania. The Strata Titles Act 1998.

Northern Territory. The Unit Titles Act 1975 and the Unit Title Schemes Act 2009.

Australian Capital Territory. The Unit Titles (Management) Act 2011.

Further Resources

For information on how strata and community titles schemes work in each state or territory:

New South Wales Queensland Victoria Tasmania Northern Territory South Australia Western Australia Australian Capital Territory

Related

Body Corporate (Legal Definition)

Prescribed Bodies Corporate

Bylaws

Company Structures (Australia)