Strata Development Set Up – FAQ
Strata Management Group’s dedicated Business Development department have the industry experience and body corporate knowledge to successfully assist developers with the establishment of new strata-title projects.
Our expert team have addressed a number of frequently asked questions regarding the strata development set up process below.
What is the process?
A body corporate is created when land is subdivided and titled appropriately for the development of apartments, townhouses and some industrial, retail and commercial complexes.
Most Developers will prefer to create off the plan sales contracts. Accordingly, the majority of consultancy work required to create the associated disclosure material is completed before the first turn of soil.
Our Development Managers will work alongside your key consultants to organise all Body Corporate documentation required to be disclosed to perspective purchasers within the sales contracts. To meet your statutory obligations, an accurate disclosure statement must be attached to contracts of sale.
Disclosure Statements comprise of:
- All plans including Survey, Exclusive Use and Service Location Diagrams;
- Proposed Administration and Sinking Fund Budgets – amount of annual contributions expected to be payable;
- Proposed Community Management Statement (CMS) including Entitlements for each lot;
- All management and service agreements required to be entered into by the body corporate including but not limited to;
- Body Corporate Manager, Management Rights (Caretaking and Letting), Embedded Networks (bulk electricity, hot water and gas), waste removal, storm water maintenance etc.
- Details of all body corporate assets.
In order to setup a Body Corporate the below general process is usually followed:
- Initial project feasibility and strata titling;
- Council development approval process – DA is sought and granted;
- Engagement of Development Consulting Team – Developer / Project Manager, Solicitor, Surveyor and Body Corporate Development Consultant;
- Preparation of all required document for off the plan sales contracts;
- Building works commence;
- Arranging of critical reports and documentation;
- Practical Completion is achieved;
- Body Corporate consultant seeks proposals for the schemes insurance policy on developers behalf and places cover – Please note, the Developer is responsible for paying for the first year’s insurance;
- The Community Management Statement (CMS) is registered at Titles Office;
- The Body Corporate holds the First Extraordinary General Meeting – as the Developer holds ownership of all lots at this meeting, they are able to approve all documentation as disclosed to perspective purchasers in the Disclosure Statements;
- Body Corporate consultant finalises scheme load on and generates levies and certificates for settlements;
- Settlement of sales contracts occurs;
- Appointed Body Corporate Managers commences daily management of the scheme;
- Body Corporate calls the First Annual General Meeting (AGM) within two months of one of the following – more than 50% of lots have settled or 6 months after the registration of the scheme; and
- Developer documentation hand over – by the first AGM the developer is required to provide the body corporate with a number of key documents, reports and records such as all building plans, certifications, warranties, common property keys, maintenance and instruction manuals, compliance reports (sinking fund forecast, insurance valuation and fire), common seal etc.
The time it takes to complete the above list can be anywhere from 18 months to 3 years depending on the size of the project.
Once our office has been engaged as the Body Corporate Consultants we immediately get started on working with you to get a full understanding of the scheme. The more we understand the scheme the easier it is for our office to put together a practical and accurate budget. It is important that the budgets set are not only marketable for you during the sales process but are also realistic for the eventual lot owners.
How much will it cost for SMG to setup my scheme?
Strata Management Group offers a complete strata development consultancy service including assisting with the set up and establishment of any scheme FREE OF CHARGE.
As there is no set up fees we ask that at the first General Meeting of the Body Corporate, SMG be appointed to manage the scheme under a three (3) year agreement.
What experience does Strata Management Group have?
The Business Development team at Strata Management Group have worked with some of Australia’s leading Developers.
We have assisted with providing practical solutions in the establishment and set up of a wide range of strata projects including:
- Small Duplexes
- Apartment Complexes
- Residential High-rise Schemes
- Mixed Used and Layered Schemes
- Commercial and Industrial Projects
- Master Planned Communities
Our office has received some great feedback and we encourage you to read some of the testimonials other developers have written about our service delivery.
Whatever the size of your scheme and whatever the time frame we are available to assist you with your project now!
Exactly how can you help?
Strata establishment is often a time consuming and complex task. Our experienced Business Development team work to ensure that your new body corporate development is set up efficiently via proven processes and procedures. We can provide practical advice on best practices and assist in ensuring that your project is compliant with the relevant body corporate legislation.
Our aim is to make the experience as smooth and easy as possible so you can focus on other important aspects of the development such as getting your project completed on time and on budget.
SMG can help throughout the development process and offer a number of consultancy, establishment and managements services such as –
- Initial Review of Proposed Sub-Division – titling strategy;
- Draft Proposed First Year Budget – for inclusion in disclosure statements;
- Draft Preliminary Lot Contribution Entitlements Schedule – for inclusion in disclosure statements;
- Review Community Management Statement (CMS) and By-Law Recommendations – working alongside surveyors, solicitors and relevant consultants;
- Arrange Critical Documents and Reports;
- Arrange Insurance Policy and Cover at Practical Completion (PC);
- Hold First Extraordinary General Meeting (EGM) – ensuring obligations under the sales contracts are tabled and approved;
- Produce Levy Statements and Disclosure Statements – at no cost to the original owner; and
- Body Corporate Management – providing administrative services to the body corporate as per the SMG agreement.
You will benefit from knowing that when you have sold all units at the complex; your purchasers will be looked after by a competent Body Corporate Manager.
When do we need to start talking?
The sooner you contact our office the better.
Our team is dedicated to fully understanding your project and its requirements. If you are only in the project feasibility stage of your strata development or if Development Approval (DA) is yet to be received from Council; our team are available to help and can provide initial advice and/or walk you through the development process.
Who should form part of my consultancy team?
To effectively set up a new strata-titled scheme we suggest that you engage the following key team consultants as a minimum.
- Body Corporate Manager (SMG) – to provide proposed Administration and Sinking Fund budgets for your first year, draft Schedule of Lot Entitlements and hold the first EGM;
- Surveyor- to provide your survey plans, exclusive use plans and service location diagrams; and
- Solicitor – to draft and submit your first Community Management Statement (CMS) and sales documentation.
Strata Management Group has the ability to manage and liaise with your consultancy team to ensure that all deadlines are met for the successful roll out of your project.
What are Management Rights (Caretaking and Letting Agreements) and do I need them?
Depending on the size of your proposed development you may want to consider investigating the possibility of creating and selling the management rights for the scheme.
The management rights for the scheme can consist of the Caretaking and Letting Agreements.
- Caretaking Agreement – indicates the duties the Caretaker is required to complete around the complex on a daily, weekly or monthly rate, and the annual remuneration.
- Letting Agreement – provides the Caretaker of the scheme the ability to conduct a letting business from the scheme.
The arrangement of this documentation is not required for all schemes. An alternative to the above is the engagement of a Facilities Manager or Building Manager.
What happens with regards to insuring my scheme?
As the Original Owner (developer) you have a statutory obligation to ensure that an insurance policy is in place once the body corporate is established covering the first year. Our office can assist you with obtaining an insurance policy at the most cost effective premium possible.
Interested in changing Body Corporate Managers or need assistance with your new project? Click here to receive a comprehensive proposal tailored to suit the needs of your strata titled scheme.