Types of Records that Owners Corporation Keep

Owners corporations, or body corporates, play a critical role in managing the collective interests of property owners in a strata scheme. They are responsible for maintaining various types of records that aren’t only legally mandated but are also necessary for effective strata management. Moreover, access to these records promotes transparency and accountability to all owners. 

Today, we will outline the different types of records that owners corporations must keep and further record keeping requirements. This article will also highlight the legal requirements and practical implications of keeping these owner corporations’ records for a required period. 

Strata Roll and Owner Details

The strata roll is a foundational document for any owners corporation. It includes vital information such as the names and addresses of all lot owners, the strata plan number, the address of the property, and details about the units’ entitlements. The strata roll serves as the primary database from which the owners corporation can communicate with the lot owners and manage the strata scheme effectively.

Meeting Records

Owners corporations must keep detailed records of all meetings, including notices, agendas, minutes, and resolutions passed during general and committee meetings. These documents provide a transparent trail of decisions and actions taken by the body corporate, ensuring all strata property owners or members are informed and that crucial decisions are traceable and accountable.

Record keeping of voting papers and proxies should also be kept for at least a year after the ballot or vote is taken.

Financial Records

Financial transparency is critical in strata property management. Owners corporations must maintain comprehensive records of all financial transactions, including consecutively numbered receipts, statements of deposits and withdrawals, financial statements, GST records, and any other related documents. These records should be detailed and transparent because they can be vital when preparing accurate financial reports for audits and financial reviews.

Correspondence and Communications

Taking down all correspondence sent and received by the owners corporation—including emails and letters—is critical. With a clear record of all interactions between the owners corporation, lot owners, and third parties, body corporates can easily resolve disputes or clarify past actions.

Records of Rules and Regulations & Other Legal Documents

The by-laws or rules of the strata scheme are critical documents that govern the conduct and responsibilities of the lot owners and the owners corporation. Keeping records of these body corporate rules, including any amendments, is essential for rule enforcement and for new or prospective owners to understand their obligations. 

This record category also includes building contracts, planning permits, section 173 agreements, and any court or tribunal notices. These documents can be instrumental in legal compliance and operational reference.

Insurance Policies and Claims

Body corporates must keep track of all owners corporation insurance policies, including coverage details and claims. They should also put maintenance activities related to the common property on file, detailing the warranties, contracts and particular repair jobs performed on common areas. The owners corporation insurance records help manage the risk and upkeep of the property effectively.

Owners Corporation Certificates

Copies of all owners corporation certificates issued should be well-retained. These certificates are usually necessary during the conveyancing process when properties are being sold. That’s because they provide a snapshot of the strata scheme’s financial and administrative state. Often, they include crucial details like strata fees, insurance, maintenance plans, and any outstanding legal matters. 

Owners Corporation Register

The owners corporation register is an essential document summarising all the activities, undertakings, and memberships. The register must contain either a hard copy or an electronic record of various important information, including the owners corporation plan number and address, the name and address of each lot owner, the manager’s name, registration number, and contact details, the lot entitlements for each lot, and the basis for the setting of lot liability if entitlement is available. 

Additionally, the register should include the date and details of each amendment made to the body corporate rules, as well as the details of contracts, leases, insurance policies and licences entered into by the owners corporation. 

How Long Should Owners Corporations Keep Their Records?

An owners corporation must keep various types of property, financial, and legal records for specific durations as mandated by law. Here are the key requirements:

• Voting papers and ballots: These should be retained for at least a year after a ballot or vote is taken.
• All other documents: Generally, owners corporation records should be kept for at least seven years. These include financial records, meeting minutes, correspondence, contracts, and legal documents.
• Permanent records: Body corporates must retain certain documents for the life of the building. These include the plan of subdivision, minutes of annual general meetings, building permits, building plans and specifications, building contracts, planning permits, section 173 agreements, builders insurance certificates, and occupancy permits.

What are the Consequences of Not Retaining Records for the Required Period?

Failure to retain crucial owners corporation records for the required period can have several significant consequences. These include:

Legal and Regulatory Penalties

Body corporates may face fines, penalties, or other sanctions from regulatory bodies for failing to comply with record-keeping requirements. This is because such requirements are often mandated by law or regulation to ensure transparency, accountability, and the ability to audit or review actions taken by the entity.

Difficulty in Defending Legal Claims

Without proper records, an owners corporation may find it challenging to defend itself in legal disputes. Records serve as evidence of the corporation’s actions, decisions, and compliance with laws and regulations. 

Complications in Financial Management and Auditing

Accurate and complete financial records are crucial for effective financial management, planning, and auditing. Failure to retain financial records for the required period can lead to difficulties in auditing, inaccuracies in financial reporting, and potential issues with tax authorities.

Loss of Institutional Memory

Records are an essential part of a body corporate’s institutional memory, providing a historical account of decisions, actions, and events. Not retaining records can result in a loss of this memory, making it difficult for the body corporate to learn from past experiences or understand the rationale behind previous decisions.

Damage to Reputation

Non-compliance with record-keeping requirements can damage an owners corporation’s reputation among stakeholders, including members, clients harming customer relationship management, and regulatory bodies. It may raise concerns about the corporation’s commitment to transparency, accountability, and good governance.

Operational Inefficiencies

Without access to past records, a body corporate may face operational inefficiencies due to the inability to reference previous decisions, contracts, or actions that could inform current practices. Non-compliance also increases the risk of undetected fraudulent activities and errors that can lead to financial losses.

Difficulty in Decision-Making

Inadequate records can make it difficult for the owners corporation to make informed decisions. Critical information may be missing, leading to decisions based on inaccurate and incomplete data and resulting in adverse outcomes.

Wrapping Up

Want to learn more about keeping owners corporation records? Don’t hesitate to get in touch with us. Here at ACE Body Corporate Management, we have years of experience in body corporate management. We can help you understand owners corporations better and make your investments more worthwhile with our strata services.