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For new bodies corporate, the initial instalments are set at the inaugural general meeting, and then later confirmed at the first annual general meeting. These instalments are set in line with the budget for the body corporate, and are usually equal instalments.
This budget is generally included in the disclosure material provided by the developer under the contract of sale for the off-the-plan sale of the lots. The developer may pay a portion of the instalment for the period of time that the developer owns the lot prior to settlement with the purchaser. This is generally done by an adjustment upon settlement of the lot.
Once settlement has occurred the payment of the contributions becomes the responsibility of the new owner of the lot. This responsibility will exist even though the new owner has not moved in, or may be waiting for the construction of the lot or for part of the common property to be completed. If the body corporate has reduced expenses because dwellings or the common property are not complete, then this may be reflected in the budget. Owners will not be entitled to a rebate or amnesty from the body corporate contributions. There may be a reduction in the body corporate budget for the first period. However, a reduction in the budget may not be significant because most body corporate financial commitments are fixed or relate directly to the number of lots in the scheme. Budgets are neither a commitment nor an authorisation to spend money in a particular way during that particular period. It is prudent financial management to include expenses even though the timing of those expenses may not be fixed. Sufficient funds must be collected to ensure that the long-term interests of the body corporate are protected.
