OUR SERVICES IN DETAILS
We weren’t joking when we said our service is end-to-end.
Here is what’s included in your agreement when you join BCsystems.
Advice
Maintenance
Administrative
Financial
Levy arrears managment
Advice
Our technical strength is in our versatility and range of experience. To give you an idea of the range of experience of our strata team, these are some of the issues we have assisted clients with recently.
- Rebrand and relaunch a retail body corporate
- Change a body corporate name and branding to avoid a registered trademark dispute
- Tender caretaking/management rights agreements, interview candidates
- Assist bodies corporate to establish renovations policies
- Update and tailor by-laws
- Remove un-approved alterations
- Assist committees with approval conditions to document renovation work
- Change and grant exclusive use areas
- Assist with performance managing other contractors
- Audit and tender lift service agreements
- Correct fire doors installed improperly
- Manage significant building defects
- Procure interior designers and architects
- Upgrade buildings with Wifi and NBN connections
- Revamp security camera, intercom and access security systems
We are confident that any challenge that your committee faces, we can assist with. Whether that assistance means we do the work for your committee, or we liaise and put your committee in touch with the right experts – we are resourceful and can tailor our approach to meet those circumstances.
Bodies corporate have a regulatory role when it comes to owners, residents and occupiers within the scheme. The body corporate by-laws are effectively rules imposed on the site by a majority of the lot owners. The by-laws can be changed by a democratic voting process, and it is the committee’s task to enforce the by-laws.
Under the legislation, the first step in formal by-law enforcement is to issue a notice of contravention of a by-law (a breach notice). That by-law matter can be escalated from there to either conciliation and adjudication run by the office of the Commissioner for Body Corporate and Community Management, or the Magistrates Court. We find a successful approach is to collaborate with committees to adopt the following steps to deal with body corporate by-law contraventions:
- Issue a general reminder
- This approach can be effective if the issue is a gradual reduction in compliance by a large group of people. Often a short sharp reminder about the by-laws and the reason those by-laws exist is a great tool to bring compliance.
- Raise the issue directly with an offender
- This step is to bring the issue to the offender’s attention, as they may be unaware of the impact of their activities, or the by-laws which apply
- This step can be done by an on-site manager or caretaker, the committee, or by our office
- Issue a formal warning notice
- This step approximates the formal by-law contravention notice and contains much of the same content, however it can issued without first requiring a committee meeting. That means it can go out early and often the faster the intervention, the better the outcome.
- Formal warning letters are quite direct in language and bring immediate attention to the issue, and what the person must do to solve the contravention of the by-laws
- The letter also sets out the penalties for non-compliance and the next formal steps.
- Issue a by-law contravention notice
- There are two types of contravention notice, and the right one must be deployed in order to maintain the integrity of the body corporate’s position when it comes to further enforcement. Our team are knowledgeable about these types of notices and when to use each type of notice.
- The notice sets out the breach in clear terms and gives a compliance period
- If the notice is not complied with, the body corporate gains additional rights to progress the matter
- Departmental conciliation and adjudication
- In Queensland there is a special government department equipped to adjudicate body corporate disputes. This is a low-cost pathway to resolve disputes between lot owners, and the decisions of the adjudicator are legally binding on the parties.
- Our team understands this process and depending on the complexity of the legal argument and the by-law, can assist the committee with these applications and arguments/submissions directly, or can recommend engagement of a specialist solicitor in this field.
Sometimes disputes arise between body corporate lot owners and the committee, and other stakeholders. These disputes may be unrelated to the body corporate’s regulatory by-law function.
We can assist the committee to manage disputes by acting as an intermediary between parties in conflict, and also by facilitating discussion and resolution. Depending on the subject matter of the dispute, BCsystems is generally able to provide impartial guidance and support to bring disputes to a close.
Each body corporate in Queensland has its own community management statement (CMS). This is the document which first created the body corporate, and over time it is maintained and updated. This document contains important information such as the list of lots which are regulated by the body corporate, the lot entitlements, by-laws and exclusive use areas.
Unless you are an experienced hand, these documents can be very technical and not readily understandable. Our team are experts at working with them, understanding them, and know when and where action is required to make sure the documents reflect the operation of your body corporate scheme.
In addition to the CMS, the body corporate has registered survey plans which have a role in determining ownership extent, maintenance obligations and insurance requirements. Many schemes are also the beneficiaries or subjects of easements, which may apply both to land and to services on the land. It is important to read these documents in context at the right time when the committee is considering any work that may involve these documents.
Building management statements are separate to a body corporate, but both a BMS and a body corporate may apply to the same property. In general terms BMS are a collection of easements and sharing arrangements that approximate some functions of a body corporate but maintain independence of the properties that they cover.
This is a specialist area of body corporate administration and one in which BCsystems is highly skilled. Our business has dedicated subject matter experts on these topics, on whom our strata managers and committees can rely when necessary.
Maintenance
- Arranging quotes
- Issuing work orders
- Liaising with contractors during the maintenance work
Our strata managers are very experienced when it comes to body corporate building maintenance – from hot water systems, pools and air-conditioners to gutters.
When a maintenance issue arises, we are available to work with the committee to resolve the following questions:
Who is responsible for the maintenance – this can be complex and depend on the registration and titling structure of the body corporate, the location and nature of the infrastructure to be maintained, and the location and nature of the fault. What may be a body corporate responsibility in one unit is not necessarily repeated throughout your building.
If a lot owner is responsible for the maintenance – we can assist the committee by preparing advice to the lot owner directing them about the problem and their responsibility to make repairs. There are other enforcement paths available to the body corporate to ensure that maintenance is carried out by lot owners, and we can navigate those with your committee.
If the body corporate is responsible for the maintenance – it is generally not a simple quote and repair. Depending on the type of work, bodies corporate are subject to at least 3 different spending limit types – committee spending limits, major spending limits and improvement spending limits. We understand those, we know how to calculate those for your body corporate, and then we can navigate around them. Those spending limits and other legal limitations on committee powers informs our strata managers about the approval pathways required for each type of maintenance work – whether that be committee meetings, AGM, and what type of voting threshold must be achieved. It is very important to get this red-tape right, as the insurance protection for the committee members and the building may be put at risk if it is handled incorrectly. Our team will set out the pathway in clear terms and then can go about making those approvals happen.
We have a long list of trusted industry suppliers – on all types of maintenance. It can be challenging to find reputable contractors who are prepared to do work for body corporate clients. Our strata managers can provide your committee or building manager with the contact information and key referrals to get the right contractors looking at your job. Alternatively we can be involved more directly to arrange quotations/proposals directly with the suppliers.
When the work is of a technical nature (e.g. structural or fire engineering), we have contacts in those specialist industries. Those technical-based jobs are generally beyond the scope of most residential caretaking or facilities maintenance contracts, so they often fall back to the committee directly. We can shoulder that burden by arranging the right contacts at the right time, and putting together that process from identification through to resolution.
When it comes to large construction projects, project management is essential. The element that often makes construction projects run on time and on budget is strong project management. This is a specialist skill and unless your committee has an Engineer, Architect or Builder as a member, it is something best left to the professionals. The project manager can assist committees to produce scopes of work to make sure that tenders are provided on an apples to apples basis, and that the tenders cover the right work. Often large projects that require project management end up being less expensive because of the efficiencies and operational benefit brought by the project manager. Our strata mangers know the best project managers working in our industry and also where their skills are best deployed – from a large scale painting job to a staged building renovation, to technical issues like subsidence, concrete spalling etc.
Administrative
It may seem that the administrative functions of a body corporate or strata committee are low-risk and low-complexity, however that is an illusion. In such a regulated industry, it is crucial for a body corporate or strata committee to get these administrative functions right.
- Organise insurance renewal quotes
- Pay insurance renewal
Insurance is one of the legal mandates for a body corporate committee. Depending on the nature and titling structure of the scheme, the body corporate must provide insurance coverage for the common property, and most often for all of the buildings and structures on the site.
Strata insurance is nothing like the relative simplicity of normal home insurance, or car insurance. The body corporate and strata insurers are insuring a large and complex risk type, with many additional covers. Our experience will help your committee get the right quotes and weigh those quotes having regard to the nature of your body corporate scheme, and the additional covers available. For example, it is not a requirement for the body corporate to provide any liability cover for its volunteer committee members – however that is something that most committees find invaluable as it offers protection from legal liability and risk for the duties and functions those committee members perform in a volunteer capacity for the benefit of their fellow lot owners.
Insurance premium payments are also subject to further regulation about committee spending limits, committee approval thresholds, and disclosure by way of an annual general meeting (AGM) motion. Our processes and documents ensure that the insurance renewal is managed in compliance with the legislation and that the body corporate is meeting its disclosure obligations to lot owners.
- Maintain the roll (lot owner database)
- Facilitate owner preferences for post or email
The body corporate roll (lot owner database) initially appears to be a simple process – the body corporate receives information about who owns the lots in the scheme.
The risk involved in the roll management is predominantly related to levy collection and financial obligations on lot owners. Under Queensland law the body corporate should be kept up to date by an owner of a lot about the lot owner’s status and contact information. In return the body corporate should rely on that information when collecting body corporate levies or contributions from that lot owner. If the body corporate does not expertly maintain its roll, that may jeopardise the body corporate’s ability to collect overdue levy contributions from lot owners or their mortgagees or purchasers through the court system.
It is a reality that some lot owners will fall into arrears that require the involvement of a mortgagee or solicitor to resolve, and that process can result in the body corporate taking possession (ownership) of a lot and then selling off that lot in order to recover a debt owed. That process naturally is complex and all elements must be in alignment for the courts to grant those types of orders. That means that the routine task of updating an owner’s email address or postal address can become a key question in a courtroom many years in the future.
We have designed extensive processes, checks and safeguards to give your committee confidence that when BCsystems is managing the body corporate roll on your behalf, we are updating the various fields based on the correct legal processes, and documenting all evidence in a way that can be later relied on. It is not a challenge that occurs often, but when this does occur for a body corporate scheme, often many tens of thousands of dollars of lot owners’ money is dependent on the compliant and accurate management of the body corporate roll.
- Keep all records in a searchable format
- Facilitate record inspections for disclosure purposes
The body corporate is regulated about the keeping and disclosure of body corporate records, which includes routine correspondence. Effectively any document produced by the body corporate or in connection with its administration or management must be kept on record for a prescribed timeframe, and during that timeframe must be available to be searched or inspected.
This means in practice that when your committee or lot owners send emails, we capture and store those emails so that your body corporate can comply with thise legal requirement.
The purpose of this disclosure requirement is a consumer protection for lot owners and prospective purchasers in body corporate schemes. When a purchaser buys into a body corporate scheme they take over responsibility for their own lot, and also responsibility to pay the body corporate levies and meet the body corporate’s obligations.
There is an established searching industry which involves solicitors, purchasers and specialist search-agents who travel to body corporate management offices to access these records and provide reports on each body corporate for prospective purchasers. Getting this right is crucial – if the records are not kept accurately or completely the search agent will often report back to a prospective purchaser that the scheme should be avoided. For that reason we ensure that your records are kept in a way that is best-practice for disclosure requirements – so that this is not a roadblock to the transaction of properties in your scheme, maintaining your scheme’s lot values.
Keep records for the duration required by law
In addition to the interested party disclosure rules, the body corporate must also keep other records like a business. For example, the financial statements and invoices of a body corporate must be maintained for a regulated period. All bodies corporate must lodge income tax returns, and in addition must lodge business activity statements if the scheme is registered for GST. In those cases there is an additional requirement imposed by the Australian Taxation Office (ATO) about the keeping of records which are relevant for the justification of those tax activities.
BCsystems is aware of these requirements and automatically complies with them on behalf of your body corporate.
Receive notices served on the body corporate by authorities
Bodies corporate are separate legal entities, like a normal company. Bodies corporate are registered with an Australian Business Number (ABN) and generally are registered with the Australian Securities and Investments Commission (ASIC).
Bodies corporate must also maintain registered office address, and this is the address used for the issuing of statutory notices (e.g. the annual land valuation notice), tax information, and any other notices served formally on the body corporate.
For BCsystems managed properties, the BCsystems office address is used for this service of notices purposes. This ensures that we receive that important correspondence and we can ensure that your committee sees it quickly. This is much better than having body corporate mail dropped into the body corporate letterbox on-site, which may not be checked every day.
Financial
Body corporate funds in Queensland are not held in trust accounts. Best practice in our industry is for all money collected by the body corporate (e.g. levies, sinking fund balance and other payments) to be collected into an account in the body corporate’s legal name.
When clients of BCsystems pay levies to their body corporate, that money does not enter BCsystems banking accounts – the money goes straight to each body corporate and is held separately. BCsystems senior staff operate those bank accounts in a way that is transparent and managed under the supervision of our Financial Officer.
This method of operation of the bank accounts of the body corporate means that the insurance coverage which provides cover for fidelity guarantee over bank deposits is maintained.
Every transaction in and out of the body corporate accounts is recorded at the time of making the transaction. We use advanced industry specialist software which records all incoming levy payments against the payer, and allocates expense payments in real time. This enables BCsystems to provide online access to the body corporate financial statements to committee members 24 hours a day, 7 days a week. The financial are updated in real time and update online every evening, to give certainty to the committee about the financial position of the body corporate.
At the end of each financial year, we provide a full set of financial accounts – balance sheet and statement of income and expenditure for the administrative fund, insurance fund and sinking fund.
Depending on whether or not the body corporate has elected to have the accounts independently audited, we will make that financial statement and the supporting documentation available to the expert strata auditor so that they can prepare an audit report to confirm the validity of the financial statements.
Each year the body corporate must raise incomes to its funds by way of levies. The levies are calculated having regard to the balance of the administrative and sinking funds, and adjusting for the anticipated costs to those funds in the coming year. It is technically the committee’s responsibility to set the budget, and then propose that budget to the annual general meeting (AGM) each year for confirmation by the lot owners.
BCsystems produces a clear and readily understandable draft budget each year, and then works with your committee to finalise that budget before the AGM. We will take care of the baseline costs (for example calculating any applicable CPI increases on your external service contracts), and your committee can then work from that base to decide what projects need to be funded in that year. Our strata managers have strong financial acumen – if you tell us your committee intends to spend $50,000 on the pool – we will enter that into your budget and can advise in real time the impact on levies, fund balances and future years.
- Issue levy notices to lot owners
- Receipt and bank levies paid by owners
Once the levies are determined at the AGM and approved by owners, BCsystems issues levy notices to each lot owner. There are regulations around the timeframe for issuing levy notices – the periods which they cover and the notice period required before the levy notice becomes due. Levy notices are important for the cash-flow of your scheme, and our managers are conscious of maintaining your cash-flow in any decisions around setting budgets and levies.
In addition to receipting and banking levy payments using the various payment methods available, we also facilitate 24/7 online access to a levy statement for each lot owner. This means that the lot owners in your scheme can access their payment history, current balance and future notices without needing to contact us during business hours.
- Facilitate easy online invoice approval
- Pay creditor invoices
Bodies corporate are becoming increasingly complex, with a multitude of contractual and quote/accept obligations to suppliers and contractors. From the routine costs (e.g. electricity, income tax, water charges), through to one-off creditor payments such as stage payments on large construction or refurbishment projects.
Our systems facilitate online invoice approvals by one or more committee members – that can ensure that no creditor invoices are paid until they have been viewed and electronically signed by one or more committee members. Many schemes use this system to have the on-site manager or caretaker approve the invoice first, before it is sent to the Chairperson or Treasurer for final authority. Like our other systems, this one is 24/7 accessible and provides a history of approved invoices at the click of a button.
The financial statements and invoices of a body corporate must be maintained for a regulated period. All bodies corporate must lodge income tax returns, and in addition must lodge business activity statements if the scheme is registered for GST. In those cases there is an additional requirement imposed by the Australian Taxation Office (ATO) about the keeping of records which are relevant for the justification of those tax activities.
BCsystems automatically maintains your financial records in electronic and paper form so that they can be disclosed if required.
- Dealing with the ATO on your behalf
- GST registration/deregistration
- ABN and Tax file number registration
- Lodgement of business activity statement (BAS)
- Lodgement of instalment activity statement (IAS)
- Lodgement of income tax return
Bodies corporate are treated like businesses by the Australian Taxation Office (ATO) for tax purposes. Though subject to special rules, bodies corporate pay income tax on investment and other incomes, and may also be subject to a requirement to register for Goods and Services Tax (GST).
If GST registered, the body corporate must lodge Business Activity Statements (BAS) and clear GST received to the ATO. Most of our BCsystems clients are registered for GST, so this is something which for our team is routine. We understand the complexities and special rules around non-profit organisations and body corporate schemes, to make sure that your tax obligations are being met.
It is also possible for a body corporate to have employees (instead of contractors). In that case the body corporate acts as an employer and has additional income tax obligations as they relate to the employees. That means things like PAYG tax withholding, superannuation clearing and Instalment Activity Statement (IAS).
Preparing your books to be audited
As a consumer protection mechanism, the body corporate legislation requires that each year the body corporate financial statements are audited, unless the body corporate passes a special resolution to skip the audit. Some committees have a policy to audit every year, or every 2 or 3 years, depending on their personal involvement and knowledge of the financials.
Our financial management services are transparent and best-practice, which assists to reduce the cost of the independent auditors for our clients. During the audit process we undertake background work to prepare audit files to assist the auditor to undertake their work.
Some costs which are initially paid by the body corporate are able to be recovered from lot owners. The most common of these costs is costs in connection with the recovery of levy debts, which BCsystems automatically on-charges to each lot which is in levy arrears.
Other costs come from time to time, for example insurance excess costs. In those situations BCsystems can charge special invoices to each lot to have the body corporate recover those costs, and we follow up payment similar to a levy notice.
Levy arrears management
- Levy arrears collection
- Engagement of solicitor for debt recovery
Our levy arrears collection process is:
- Clearly defined
- Transparent for all parties
- Cost neutral to the body corporate
- Very effective
Levy collection is a very important part of body corporate management, and one that we take very seriously. We have a dedicated team member who only deals with levy arrears, which is why our clients have industry-leading low arrears rates.
Over 25 years we know that most levy arrears are caused by simple mistakes like an owner forgetting to advise the body corporate of a change of address or change of property manager.
We have designed our arrears process and policy to recognize that common cause and we do that by:
- Monitoring email bounce-back and returned mail to identify early if any owners have changed their details and not told us
- Contacting owners by phone/email to request updates throughout the year
- Facilitating easy online details updates
The costs associated with our collection steps are automatically charged to the lot owner in arrears.
Where the arrears issue is significant and a solicitor is required, we have a panel of body corporate levy debt collection specialists who do that work effectively and at a low cost. The costs charged by the solicitor are also incorporated into the debt for the lot owner, and the solicitor automatically recovers their own costs as part of the collection process.
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