Issue Date: Mon 15-Jul-2019
Article Source: https://www.realestate.com.au/news/take-control-of-your-investment-property/...
Take control of your investment property
INVESTORS are driving blind as they sit back and allow others to take the wheel of their properties ' and it can cost them dearly
It can be tricky to make time to be actively involved in your investment’s body corporate committee, but staying in touch means you have a say in decisions that could impact your investment.
Hynes Legal partner and strata law expert Frank Higginson said those who invested in properties with strata schemes were less likely to attend body corporate meetings than their owner occupier counterparts, which could result in arrangements that could leave you or your tenant unhappy, or in some situations, financially worse off.
“Committees tend to be run by those who show up, and the ones more likely to show up are the ones that live there,” Mr Higginson said. “(Investors should engage in body corporate) to take an active interest in what may well be one of the biggest investments you will ever make.”
Frank Higginson, of Hynes Legal, stresses the importance of being in touch with your body corporate
But your body corporate’s levies are set, so their decisions cannot cost you any extra, right? Wrong.
Mr Higginson said many people assumed the body corporate committee had done their homework when making decisions, but this was not always the case.
“By letting others manage your investment for you, you let others make critical decisions that can directly affect your investment,” he said.
“As much as most major decisions are reserved for general meeting approval, the reality is that if the committee recommends something, 99.9 per cent of the time owners will vote that way — on the basis they
they assume the committee has done their homework.
“If the committee has not done their homework, it becomes the blind leading the blinder.”
Those investing in strata titles should stay informed with their body corp’s decisions.
For example, if a body corporate committee makes a recommendation but those voting have not researched it and the decision results in expenditure beyond the allocated funds, it can result in a hefty bill for the owner of each lot.
In 2018, the body corporate committee of a Brisbane residential complex was slapped with almost $735,000 in court costs after trying to terminate their Caretaking Agreement.
The body corporate only had $130,000 allocated to tackle the issue, and as a result the gap would be filled by sending each lot owner a bill for a special levy of approximately $1,100 to $1,500.
The decision of a body corporate could impact your financially.
Mr Higginson said body corporate minutes may not always tell the full story, but the Commissioner for Body Corporate and Community Management Chris Irons said accessing body corporate records was a way for those who are too time poor to attend meetings to keep their finger on the pulse.
“Owners have a legislated right to access body corporate documents such as a copy of the roll and meeting minutes,” Commissioner Irons said.
“Legal professional privilege might mean a certain record is not made available, but otherwise it isn’t correct for a body corporate to refuse access on the grounds of, for example, concerns about privacy.”
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