A developer is the person that put your building project together.
This can be a very different person from the builder who built your building.
The builder is the one who physically put up the structure of your complex.
The developer is the one who bought the land, engaged the architect, organised for the building to be erected, negotiated the sales and so forth.
Sometimes the developer is also the builder if they did their own construction.
Until the first unit is transferred, the entire project belongs to the developer.
Once the first unit is transferred to a new owner, the developer ceases to own the building and the body corporate comes into being.
At that stage the developer becomes just another owner.
Another person will own one unit and the developer may own so many units.
The developer may also own what is known as a right of extension, which is the right to build so many more units on the same site.
What it really means is that from that date the body corporate comes into existence and it becomes responsible for running the building in place of the owner.
It must put together a budget and levy for running the building and receive the levy each month from the owner of each unit and pay the accounts on behalf of the building out of the money it received.
The developer must pay levy just like every other owner on each of the units that he still owns.
Importantly, the developer is no longer responsible for running the body corporate.
So, for example, if the developer was responsible for paying the cleaners’ wages before the first transfer took place, after that the body corporate takes over that responsibility.
The body corporate does not get involved with disputes between individual owners and the developer.
For example, if an owner is unhappy about the quality of painting inside his flat, he must deal with the developer directly.
The body corporate only looks after the maintenance of the outside of the scheme while the owner must look after the inside.
At the very first meeting of the body corporate, the developer must account for all the money that has been paid and hand over a full set of building plans, and all contractors’ contact details, copies of guarantees which are then passed over to the body corporate.
- Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant.