Is it possible for a unit complex to not have a body corporate?

Before we answer this question it is useful to know the different types of unit complexes.

We use the following terminology:

  1. Units - Apartments and town houses that each have their own title deed and share some common space, even if it is only a driveway.
  2. Flats – Apartments that are usually in the one building and share a title deed. For example, there may be 6 apartments in the one building which everyone may call units but, because the one title deed covers all 6 apartments, we refer to them as flats.
 
You will typically find three different types of set up:
  1. Units which share walls, and maybe a roof, with other units. They will have been set up with a body corporate.
  2. Houses in a gated community. These typically won’t have common walls with other houses, but some do. Once again they will have been set up with a body corporate.
  3. Flats, which will never have a body corporate because the owner not only owns the apartments but also the driveway and yard.
 
In a lot of smaller schemes where there are only 2 or 3 units (though we have seen this even with 6 units) the owners don’t worry about the body corporate and operate as if it doesn’t exist. They will often say there isn’t a body corporate. Their reason for them saying this is that they don’t hold meetings, no levies are payable and the body corporate doesn’t do anything.
 
However once a body corporate is established there will always be a body corporate. It is possible to re subdivide a unit complex and create individual properties, but this is very expensive and we have never seen it done due to the cost and minimal benefit.

So when someone says there is no body corporate, what they are really saying is "there is no operating body corporate". There will be a community management statement which governs the body corporate but there won’t be any bank accounts or other documentation like minutes of meetings.

It is a lot harder to sell a unit without an operating body corporate. As it is easy to get the body corporate back up and operating we recommend doing this before listing it for sale.

We are currently doing this at the moment for some of our clients. All it involves is obtaining a copy of the community management statement and doing minutes of meeting for the AGM. The minutes can be set up as a precedent so they can use them every year.

For further information please contact us.