Property Investment
Guide to residents' associations and body corporates
Learn what the main difference is between the two, and what each will cover in terms of your investment property.
Property Investment
4 min read
Author: Scott Collings
Qualified builder. 6 years’ experience building + 6 years project managing residential developments.
Reviewed by: Brittany White
Licensee (Eligible Officer) and Team Leader for Opes Property
When you buy a townhouse in a new development you also agree to follow a set of rules.
These might cover where you park your car, what colour you paint your fence, or changes you can make to your home.
These are often referred to as the Residents Society Constitution.
But what if you don’t like those rules? Can you change them? And, who sets them?
In this article you’ll learn how residents’ societies create their constitutions. You’ll also learn why they exist and what options you have if you don’t agree with the rules.
Residents’ society rules can limit what you do with your townhouse. You may be able to change them later, but don't buy a property assuming you can.
When a developer builds a new set of townhouses they and their lawyer usually create the constitution before the homes are built.
These rules help keep the development looking good and protect shared spaces. They make sure owners look after their properties.
They also help the developer finish building.
That’s because townhouses are often built in stages; some people may already be living there while other homes are still being built.
The developer needs to make decisions about things like shared driveways without owners holding up the work.
There are two common ways these rules are set up:
| Residents’ society | Residents’ association | |
| Where are the rules written? | In a document called a constitution | In legal rules called land covenants |
| Can they change later? | Yes, if enough owners vote for a change | Sometimes, depending on the rules |
Here are some common examples:
| Rule | What it means |
| Parking | You may not be allowed to park in your driveway |
| Fences | You may need permission to change the colour |
| Home changes | You may need permission to build a deck or change the outside of your home |
| Washing | You may not be allowed to hang washing over your balcony |
| Rubbish | You may not be allowed to leave old furniture in shared rubbish areas |
| Noise | You may need to keep noise down at certain times |
If you buy a property using the Opes Wealth Pathway, you’ll get the proposed rules before you invest.
That means you can check them with your lawyer before you agree to buy the property.
You can ask the developer to change rules you don’t agree with before buying. But, according to Danli Ge, Managing Director of Care Body Corporate Ltd, they are unlikely to agree.
That’s because the rules apply to the whole development, not just one buyer.
So let’s say some buyers have already bought properties in a development. You ask the developer to change the rules. The developer then has to get permission from the other buyers.
Changing them could also mean extra costs or delays, especially if the council has already approved the plans.
Some developers also have extra voting power while they’re still building.
This means they can make certain decisions without owners stopping them, although that extra power doesn’t necessarily last forever.
Owners can often change the rules once the developer has finished building and given up any extra rights.
But how you change the rules depends on how the development is set up.
| Residents’ society | Residents’ association | |
| Can owners change the rules? | Yes, through a vote | Sometimes |
| What does it take? | Often 75% of votes cast must agree | Depends on land covenants |
For residents’ societies, Danli says most constitutions she’s worked with need 75% of votes cast to agree to a change.
That doesn’t mean 75% of all owners.
For example:
| Example | Number |
| Total owners | 100 |
| Owners at the meeting | 40 |
| Votes needed to approve a change | 30 |
If all 40 owners vote only 30 need to agree.
This assumes enough owners attend for the meeting to count. Any change must also follow the society’s rules and the law.
So, while you may be able to change the rules later, there’s no guarantee enough owners will agree.
If you decide to take the law into your own hands and break the rules anyway … you may be asked to fix the problem or face a fine.
For example, if you paint your fence bright pink without permission, you might have to repaint it.
Danli has seen a document that threatened fines of up to $1,000 a day for an ongoing problem.
But that doesn’t mean the fine can automatically be charged; it must be allowed under the law.
Although management companies often try to sort out problems with owners before taking further action.
Ask your lawyer to check these six things:
| What to check | What to ask |
| Parking | Can I park in my driveway? |
| Changes to your home | Can I paint my fence or build a deck? |
| Shared costs | How much will I need to pay? |
| Developer control | When does the developer give up extra rights? |
| Breaking the rules | What happens if I don’t follow them? |
| Changing the rules | Can I change the rules later? |
Your lawyer can also ask the developer about rules you don’t agree with,
but they can’t simply change them for you.
Rules aren’t always a bad thing. While they might stop you painting your fence pink … they also stop your neighbour painting theirs yellow.
So, these rules can help keep a development tidy and shared spaces looked after.
But they can also limit what you do with your home.
And while you might be able to change some rules later, you’ll usually need other owners to agree.
So, ask yourself whether you’re happy to live with the rules as they are.
And don’t buy a property assuming you can change the rules later.
Qualified builder. 6 years’ experience building + 6 years project managing residential developments.
Scott has a background in construction. He progressed from a qualified builder to roles in project, construction, and finally development management. He brings this experience to his role as Opes' Property Development Liaison Manager, making sure investors can access high-quality properties.
This article is for your general information. It’s not financial advice. See here for details about our Financial Advice Provider Disclosure. So Opes isn’t telling you what to do with your own money.
We’ve made every effort to make sure the information is accurate. But we occasionally get the odd fact wrong. Make sure you do your own research or talk to a financial adviser before making any investment decisions.
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