Body corporate and sectional title basics
Whether you were just elected trustee or you own a unit and want to know your rights, sectional title runs on a handful of rules that nobody explains until something goes wrong. Here they are, in plain words, for trustees and owners alike.
What a body corporate actually is
A body corporate is not a company anyone registered. It comes into existence automatically under the Sectional Titles Schemes Management Act the moment the first unit in a new scheme is transferred to someone other than the developer. From that moment every owner in the scheme is a member; you cannot join, resign or opt out. The body corporate owns the levy fund, insures and maintains the common property, and acts through trustees the owners elect. Trustees carry real duties: they must act in the scheme's interest, keep proper records, and can be held accountable for decisions taken outside their powers.
The compliance duties every scheme carries
- CSOS registration: compulsory for every community scheme, no exceptions for small ones. Schemes also collect and pay over a CSOS levy from owners; the amount follows a formula tied to levies, so it varies by scheme and unit.
- Annual financial statements and audit: the body corporate must prepare financial statements every year, and as a rule they must be audited. The audited figures go to the owners at the AGM.
- The AGM: an annual general meeting must be held every year to approve the financials and budget, set levies and elect trustees. Skipping it does not make it optional; it makes the scheme non compliant.
- Insurance to replacement value: the scheme must insure the buildings for what it would cost to rebuild them, not their market value, and the valuation should be revisited regularly. Underinsurance lands on the owners when disaster strikes.
- Two levy funds: schemes must budget for both day to day running costs and a reserve fund for future maintenance, backed by a maintenance plan.
Rules, and who approves them
Every scheme runs on two rule sets: management rules, which govern how the body corporate itself operates, and conduct rules, which govern day to day living such as pets, parking and noise. Schemes can amend rules, but the amendment only becomes binding once the owners pass it with the required majority and CSOS approves it. A rule that was voted on but never filed with CSOS is not enforceable, which is one of the most common surprises in scheme disputes. Before enforcing or fighting a rule, ask for the CSOS approved version.
Disputes go to CSOS, not straight to court
Levy disagreements, noisy neighbours, trustees refusing access to records, unfair rule enforcement: these go to the Community Schemes Ombud Service first. It is inexpensive, designed for ordinary owners without lawyers, and its adjudication orders are enforceable like court orders. Running to court first usually gets you sent back with a costs lecture. Put the complaint in writing to the trustees or managing agent first, keep the paper trail, and escalate to CSOS if it goes nowhere.
Frequently asked questions
What exactly is a body corporate?
It is the legal entity that comes into existence automatically under the Sectional Titles Schemes Management Act the moment a unit in a new scheme is transferred to someone other than the developer. Every owner is a member automatically; nobody joins or resigns. It owns the levy fund, maintains the common property and acts through elected trustees.
Must our scheme register with CSOS?
Yes. Registration with the Community Schemes Ombud Service is compulsory for every sectional title scheme, and schemes also pay a CSOS levy collected from owners along with the ordinary levy. The amount is set by a formula linked to levies, so it differs from scheme to scheme. An unregistered scheme is non compliant even if nobody has noticed yet.
Can trustees just change the conduct rules?
No. Rule changes must be passed by the owners in a general meeting with the required majority, and then approved by CSOS before they have any force. A rule the scheme enforces but never filed with CSOS is not binding, which surprises many trustees mid dispute.
I have a dispute with my body corporate. Do I need a lawyer?
Usually not, and usually not a court either. CSOS exists precisely for community scheme disputes: levies, rules, nuisance, access to records, trustee conduct. Applications are inexpensive, the process is designed for ordinary people without legal representation, and adjudication orders are enforceable. Courts are the last resort, not the first.
Scheme not registered, or drowning in CSOS admin?
We handle CSOS registrations and compliance for schemes and managing agents, at a fixed price with everything in writing.
CSOS supportKeep exploring
Per the Sectional Titles Schemes Management Act and the CSOS Act. Scheme rules, levy formulas and thresholds change and differ by scheme; confirm specifics with CSOS or your managing agent. Free tools are estimates. Packs are templates and guidance, not legal or financial advice.