If you are buying a new home and it happens to be in a townhouse, an apartment or a block of units, chances are you will automatically become part of the owner's corporation responsible for the property. Usually, when such buildings or lands are subdivided, it becomes necessary to provide for the shared ownership of common property, which typically includes areas such as fences, gardens, walls, lifts, pathways, stairs and driveways. Management of all the common areas of the entire property then becomes the role of the lot or unit owners who share those areas, and this is where owner's corporations comes into play. If it's your first time buying a unit, a townhouse or an apartment, dealing with your owner's corporation can be quite complex. Therefore, here are a few things you need to know about these corporations.
There are a number of tasks that owner's corporations perform. However, their principal role is usually to handle administrative duties in ways that are beneficial to all the members. Some of these duties include resolving disputes amongst members, maintaining the common areas, including the management of costs of any repairs made and even creating and enforcing rules to govern the property. These rules pertain to security concerns, noise levels, the use of the common areas and conflict resolution among others. As a member of the corporation, you have some level of authority in matters concerning how the entire property is run. Therefore, understanding your responsibilities will help ensure your interests are represented and that no one oversteps their boundaries.
This is your share of ownership of the property (common property), and it determines your voting rights. Voting is essential because it's how decisions are usually made. It is important to understand that, for most owner's corporations, votes are usually based on lot entitlements. This basically means that if you own more than one unit or lot, then you have more than a single vote, and if you are in a partnership in one lot, you only have a single vote.
In conducting the administrative duties mentioned above, your owner's corporation will incur some expenses. For this reason, lot liabilities represent the share of these expenses that every lot owner has to pay. This means you will pay some fees or levies after an agreed period. Some of these include administrative fees to cater for the everyday running of the corporation, special levies for insufficient funds or unexpected expenditure from things as new windows and roof repairs, and sinking fund fees for long-term maintenance such as general repairs. It is important that you pay the required fees to avoid penalties or being denied your right to vote when decisions are being made. This is why you need to make an effort to attend meetings or contact the corporation directly in case you can't make to meetings to be aware of any new or extra fees or charges.
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