The Parasites of Western Economy, Part 8: Body Corporate robbing owners of low cost dwellings.

The Parasites of Western Economy, Part 8: Body Corporate robbing owners of low cost dwellings.

by tonytran2015 (Melbourne, Australia).

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(Blog No. 1xx).

#parasite, #body corporate, #owners corporation, #robbery, #over-price maintenance, #inefficient repairs,

The Parasites of Western Economy, Part 8: Body Corporate robbing owners of low cost dwellings.

There is an invention in the Western World to reduce the cost of owning a dwelling. Many people can pool their resources together and own a building. Each can then live in his own part of the building and can also sell and transfer his ownership as his needs change.

1. The role of a Body Corporate in a common building with many owners.

For example, four owners can pool resources to own a building with 8 rooms, 4 kitchens, 4 toilets. Each owner owns an “apartment” comprising of two interconnected rooms with separate kitchen and toilet. The building, its yards and fences are common property to all four owners.

By laws, there must be someone responsible for the whole building and its land, that person is the Body Corporate of the building. The Body Corporate is responsible for keeping the building safe and complying with all social requirements (from Local governments and neighbors). The Body Corporate is answerable to Local governments and neighbors. The owners of apartments must elect a Body Corporate to operate and be responsible for the building and its land.

Due to the ever increasing complexity of requirements placed on by Local governments, owners usually hire an external company to act as the Body Corporate for the building.

2. Robbery of owners by the Body Corporate.

The Body Corporate has a manager and he may carry out inefficient repairs to building and charge owners outrageous fees for the work.

Examples:

I have seen a Body Corporate engineer suggesting 30 owners to replace 30 windows because one window has cracked due to foundation movement ! When faced with the question, he could not justify his recommendation.

I have seen the same Body Corporate suggesting 36 owners to break up all concrete pavement and re-concrete it because some slabs are not level.

I have also seen the same Body Corporate replacing windows and charging each owner $6000 for works that is worth of no more than $3000.

3. Owners can prevent robbery.

a. Owners should not let Body Corporate decide on the type of works it likes without justification. Reasons for works and costs should be scrutinized.

b. Owners who cannot vote should not give their vote to the Body Corporate Manager. Doing so would make it hard for other owners to argue against expensive works by Body Corporate.

c. Prospective owners should not buy ownership of any apartments with high Body Corporate fees. This will force existing owners to care about the financial wastes of their Body Corporate.

4. Conclusions

a. There should be a State register of complaints against Body Corporate Companies and register of their spending on the repairs of various buildings so that owners of common dwellings know whom they have to avoid appointing as their Body Corporate.

b. Older citizens should know that selling a large property to own a small apartment may not reduce their expenses if Body Corporate Companies of the apartments are allowed to rob them.

References:

[1]. https://www.consumer.vic.gov.au/housing/owners-corporations/buying-into-an-owners-corporation/what-is-an-owners-corporation

[2]. https://www.propertyandlandtitles.vic.gov.au/land-titles/owners-corporations

[3]. https://www.smh.com.au/national/rip-off-body-corporate-managers-stay-registered-20130205-2dwj0.html

[4]. http://www.dailymail.co.uk/news/article-3404218/Retirement-flat-rip-Elderly-people-hit-hidden-fees-amounting-tens-thousands-pounds.html

[5]. http://www.moneysense.ca/spend/real-estate/is-it-wise-to-downsize/

[6]. http://www.thisismoney.co.uk/money/pensions/article-4967930/Pensions-rip-fees.html

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