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Body Corp Myths – Duplexes and other small unit complexes

“There Is No Body Corporate” and Other Myths About Duplexes

Out of a total of 42,948 different body corporates in Queensland 30,211 have fewer than six lots. That’s 70% of all strata schemes in Queensland.

And the vast majority of that 70% will be made up of duplexes, the humble two-lot dwellings that dominate our suburbs.

By now you may have already spotted the most common myth about duplexes: if the majority of body corporates are duplexes, ergo, duplexes have body corporates.

“But, my agent / the seller told me there was no body corporate” is a common cry heard all across Queensland when lots settle and the new owner actually gets to chatting with the neighbours.

Myth #1 There is no body corporate

It is true that not all duplexes have body corporates, and, if you bought a duplex it is possible that there is no body corporate.

But, it’s actually quite uncommon that someone buys a ‘duplex’.

A duplex is a pair of dwellings on one block of land. What most people actually buy is one half of a duplex.

It’s the process of strata titling that allows the two dwellings on the one block to be sold to separate owners. And, that process of strata titling is what creates the body corporate.

So, if you bought one half of a pair of duplexes there is most likely a body corporate.

Myth #2 The body corporate is not active

I’ve actually said this myself from time to time but it is incorrect. A body corporate is not like a house or a car, something that sits idle until someone chooses to use it.

Body corporates are entities, entities subject to some pretty expansive legislation.

Whether or not the lot owners choose to act on behalf of the entity, or comply with the legislation for that matter, doesn’t in any way impact the validity of the entity.

Meaning there’s no process of re-activation a body corporate needs to go through before the rules and regulations apply. They always apply.

There is no policing body for body corporates however, and the only people affected by it are its members, the lot owners. But, at any time, either lot owner can complain to the adjudicator and force compliance with regulations.

What we really mean when say the body corporate is “inactive” is that meetings are not held and levies are not issued.

Myth #3 There are no body corporate records

Duplexes are a grey area for me because of the many thousands of strata searches I’ve done only a handful have been of duplexes, and almost all of those were new.

Until recently duplexes were registered under either a small schemes or standard module regulation which requires developers to provide certain documents to the body corporate as part of the development process.

Consequently body corporate records do exist in the same format as every other body corporate.

In practice for most duplexes meetings are not held, levies are not issued and there are no bank accounts so the very idea there may have ever been records let alone a body corporate becomes somewhat of a, well, a myth.

Myth #4 Bummer, there is a body corporate

For a lot of people the idea that there might actually be a body corporate for their duplex is crushing.

But it really doesn’t need to be.

The whole point of body corporate legislation is to offer a framework within which people can invest and live together, because, you know, people!

If we could all just get along there would be no need for all that legislation.

Having a body corporate doesn’t need to be an issue for duplex lot owners. All that’s required is communication, a willingness to work together and the ability to pay your half of whatever expenditure comes up, which in most cases is half the insurance policy.

If the two lot owners can negotiate and resolve any issues between themselves, excellent, even if there’s no record of that.

For some people though, that’s a challenge, which is why there is legislation to help lot owners with poor investment partners.

photo and article credit: mybodycorpreport.com.au blog by Lisa 2014 – yagodiaz via photopin cc

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What to know when you’re buying a home

When you’re buying a home there are a few things that you need to consider so that you get the best bang for your buck.

First of all, you need to look at the prices. Are you buying because you genuinely want to or are you buying because of hype? Of course it’s hard to predict property prices, however when you do buy you really need to weigh up if your budget can sustain the mortgage repayments rather than buying because you are worried about the market. You should only buy if you can afford to.

To determine that, we recommend that you use a mortgage calculator to figure out if you can afford the repayments. It’s always best to calculate your theoretical payments based on the higher end. If the interest rate is 5%, then we recommend that you calculate your repayments on 8% to allow for fluctuations in the market.

Interest rates are determined by credit scores, and the worse your credit score the higher your rate. It’s best to spend at least a year or two saving, and building up your credit score prior to applying for a mortgage. That will put you in a good position to get the best mortgage rate possible.

To avoid disappointment, once you know your credit score is up to scratch, apply for a pre approved mortgage. That will give you the chance to look at properties safe in the knowledge that you have the finance available to make the purchase. It will prevent disappointment at auction and allow you to comfortably bid.

When you are looking, and you know your price range and your total budget, scour the neighbourhoods that you’d consider living in. Work out if you could see yourself living in that neighbourhood. Find out the amenities. Determine if the neighbourhood will suit your lifestyle. There would be nothing worse than buying a home and then later discovering that it’s not right for you. Take photos during your hunt so you can refer back to them and aren’t caught out making an impulse decision.

With these tips you should find it easy to locate your ideal home and will be in a position to snap it up when you do.