How the Governance of a Body Corporate Works

Posted by Auckland Property Management Ltd on June 12, 2019 | Body Corporate, News

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If our Cross Lease and Resident’s Society owners will forgive me, I would like to take this opportunity to provide our Body Corporate clients with a quick refresher on how a Body Corporate is structurally organised.

As the diagram below explains, there are some unique structural features that all owners need to know about.

Whether you are a Chairperson, a Committee Member, or a regular Body Corporate owner then it is important that you familiarise yourself with the below diagram.

Body Corporate Governance

The Unit Titles Act 2010 and the Unit Titles Regulations 2011 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.

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 lines 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 – The Chairperson 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 can 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.

If a Building manager is needed, 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 and will depend 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 those noted below:

Insurance

Cleaning Services

Fire Protection

Lift Servicing

Power

Water

Ground Maintenance

Building Wash

Rubbish/Recycling Collection

From Auckland Property Management’s perspective, you can see that we are generally involved in every element 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 I, or any of our Team can be of any assistance to you or your Body Corporate, please feel free to contact us on the form below.

Kind regards

Steven Garland

General Manager – Body Corporate
Auckland Property Management

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