Many property owners don’t know their rights and responsibilities when it comes to living in an owners corporation or body corporate-managed building. While there’s plenty of information available on the internet, myths and ignorance often persist, and one of the biggest barriers to effective building management is apathy from lot owners. This can lead to mistakes by the owners corporation or body corporate, which can cost money and affect the quality of the building.
The five most common mistakes are:
- Allowing owners corporation or body corporate fees to go unpaid
When fees aren’t paid, the owners corporation or body corporate can’t conduct regular and important maintenance on the building and facilities. As these become rundown, the building becomes less attractive and, importantly, less safe. This can make it hard to rent apartments, and can affect the resale value.
- Keeping owners corporation or body corporate fees low or static
While lot owners may initially appreciate the savings that come with low or static owners corporation or body corporate fees, the net result will eventually be the same as allowing fees to go unpaid. Sooner or later, the capital works fund won’t have enough capital to conduct the works that needs to be done to keep the building looking and running well. As the building degrades, the ability to command high rents and purchase prices will similarly dwindle. Keeping these fees low isn’t in anyone’s best interests in the long term.
- Failing to enforce building rules or by-laws
Building rules and by-laws are primarily in place to govern building management, and are created to maintain the value of the property. These rules and by-laws may include what owners and tenants can have on their balconies, what pets are allowed, how facilities are to be used, and more. Failing to enforce these can result in a messy, damaged building that makes it hard to attract renters or buyers. It can also become difficult to enforce other rules and by-laws, since lot owners won’t appreciate the inconsistency.
- Late contractor payments
Late payment of contractor invoices can cost your owners corporation or body corporate money. There are usually discounts to be had for early payments while late payments usually attract a fee. Then there’s the risk that a preferred contractor or supplier will refuse to do any further business with your building because of consistent late or non-payment.
- Declining to employ a professional owners corporation manager
Many owners corporations and bodies corporate decide to self-manage which can have some benefits as long as everything is working well. However, if a problem arises, self-managed owners corporation and bodies corporate are at a disadvantage. It’s harder to resolve issues, manage legislative requirements, maintain continuity, and deliver a top-notch service for well-meaning volunteers. And, when an owners corporation or body corporate becomes dominated by a forceful personality, which often happens, things can spiral out of control quickly.
Make the switch today. To find out how the PICA Group can help your owners corporation or body corporate avoid these costly errors, contact us today.