Buying a unit or apartment is different from buying a house, and the main difference is the body corporate. But what is a body corporate? This slideshare gives some history of how they evolved and what they are.

1. What is a body corporate?

2. Most people hear “body corporate” and think of the towers that dominate our city skylines

3. But not all high rises are body corporates and body corporates come in all shapes and sizes

4. To understand what a body corporate is it helps to understand how strata titling evolved

5. Apartments have been around a long time. The Egyptians and Romans used them to house the poor

6. Each building was owned by one person, what we would call a slumlord

7. Eventually land became more scarce and certain areas more exclusive

8. Apartment buildings for the upper middle class began to appear … but they could still only be rented, not purchased

9. Unless you bought the whole building

10. It’s a question of ownership. To be sold a property must have a title

11. Property titles are created by subdivision; selling off pieces of a large block individually

12. But you cannot subdivide a building

13. Instead some buildings became companies. Ownership was transferred via shares

14. But, with shares as collateral, less can be borrowed

15. Apartment ownership remained only for the “well-to-do”

16. To achieve higher density more people needed to be able to buy

17. In 1961, in Sydney, Australia, strata titling evolved as a way to sell apartments individually

18. A strata titled building has two parts: the lots and the common property

19. Each apartment, or lot, has a Title so ownership may be transferred

20. And the common property is held in trust by a new entity to benefit every lot owner

21. The body corporate is the entity that owns the common property

22. And all the lot owners are members of the body corporate

23. They are jointly responsible for the common property

24. Acting within strict rules and regulations designed to protect every lot owner’s interests

25. Now days strata titling is used for all sorts of property structures throughout Australia and the world

26. Legislative requirements change from place to place but the overall concept remains the same

27. A body corporate is an entity that holds and maintains the common property in a building or scheme

28. And the combined lot owners share the responsibilities for the body corporate

29. When you buy a unit you also take on a portion of the responsibility for the common property

30. Which is why savvy investors find out what they’re getting into … but that’s another story