Definitions of common terms

Body Corporate Definitions of Common Terms provide Peace of Mind for both current and potential investors.

Unit

A unit is what each owner possesses. It will normally be a physical structure (such as an apartment or carpark), but can be simply an area of surveyed space within which improvements may or may not exist.

Levy

A levy is the share which each owner pays towards the Body Corporate’s annual budget. The timing of payment of levies and the amount of levies are fixed by the Body Corporate, usually at the annual general meeting (AGM).

Unit entitlement

The Act provides that the share of the Body Corporate expenses each owner pays is calculated by unit entitlement. This is the comparative value of each unit in comparison to all other units in the complex, and is initially assessed by a valuer at the time the unit title plan is deposited. The new Act brings a potential new method of calculations being “Utility Interest” (see below).

Utility interest

The new Act recognizes unit entitlement is not always an appropriate measure of cost allocation. Provisions exist for costs to be allocated by utility interest, which is the relevant benefit the expense item delivers to individual owners (e.g. ground floor owners may not be required to contribute to lift costs).

Unit plan

The depositing of the unit plan with Land Information NZ is what forms the Body Corporate. The plan defines the units, accessory units (such as carparks and storage units) and the common areas. It may also define future development units.

Budget

Every year at the AGM, proprietors approve the expense budget for the coming year. It is the expense budget which forms the basis for assessing the amount of each owner’s levy for the year. BBMS can assist with preliminary budgets for your Body Corporate or committee, however approval of the final budget is a decision made by the owners at the AGM.

Utilities

It is not uncommon for large complexes to have one water or power meter. Check meters to measure consumption per unit may also exist. The Body Corporate can allocate costs to units based on check meter readings.

Insurance

The Body Corporate is responsible for placing full replacement insurance cover for the buildings and improvements. Additional covers which are generally obtained include public liability, landlord’s fittings and fixtures, loss of rents from an insurable event, alternative accommodation for owner occupiers, statutory liability, office bearer’s cover and construction cover for internal works or refurbishment.

Annual general meeting

Each year the Body Corporate must hold an annual general meeting, which meeting determines the financial position and direction of the Body Corporate. Issues arising between annual general meetings may be discussed and resolved at extraordinary general meetings. The committee will determine the timing of AGMs and EGMs.

Committees

Each Body Corporate must have a committee which is responsible for running the Body Corporate between general meetings. How owners are elected to the committee is provided for in the Body Corporate rules.

Contractors

A full suite of contractors is available on a 24/7 basis. BBMS has been able to negotiate very reasonable rates with a number of collaborative contractors. Any discounts are passed on in full to the Body Corporate.

Accounting systems

Most BS Secretaries will havea customised management software system. Accounts are presented to owners prior to any general meeting. These should include a balance sheet, income vs expenditure, aged proprietors, aged creditors and a detailed expense activity report.

Insurance

Most BC’s will have full insurance to comply with the Unit Titles Act and this is normally arranged and facilitated for all Body Corporates through a competitive process by the BC Secretary. Insurance valuations when required are obtained from independent valuers.

Costs

A levy is the share which each owner pays towards the Body Corporate’s annual budget. The timing of payment of levies and the amount of levies are fixed by the Body Corporate, usually at the annual general meeting (AGM).

Special services

Every complex is different, and where services over and above the standard services are requested by the Body Corporate (such as dealing with remedial works), https://www.villeroy-boch.com/fileadmin/picdb/online/valium.html
BBMS have the knowledge and expertise to support and advise owners. No additional fees are charged for the one-off services without the prior approval of the Body Corporate and ongoing changes maybe agreed depending on the addition work involved.

service-footer