Building Management Statements: What You Need to Know for Your Commercial Property

What is a Building Management Statement (BMS)?

A BMS is a formal agreement between the owners of individual lots within a shared development. It governs the interaction between different property types, such as commercial and residential components, and outlines responsibilities for shared infrastructure and facilities.

It is not a body corporate or a strata title scheme, and is not governed by those rules.

It is registered against the land as an encumbrance, and most be disclosed to buyers.

The Purpose of the BMS

The core function of a BMS is to provide a framework for managing shared areas and services (and costs). It sets out:

• Which owner is responsible for repairs, maintenance, and upgrades of common property;
• How decisions are made regarding shared infrastructure and common property; and
• How costs are divided among the lot owners.

What Will You Be Responsible For?

Each lot owner’s responsibilities are detailed within the BMS, the most common shared services or facilities covered by a BMS include:

• Car parks;
• Fire services;
• Lifts;
• Water and sewerage services and pumps;
• Access ways and foyers; and
• Insurance.

Who Manages the BMS?

A well-managed BMS will have a Management Group, made up of representatives from each lot owner. This group oversees all BMS obligations, including:

• Scheduling meetings;
• Resolving disputes;
• Maintaining proper records; and
• Approving and managing budgets for shared expenses

It’s essential to understand that a BMS is not a body corporate. While both manage shared responsibilities, they operate very differently. Unlike a CMS, there is no standard statutory form for a BMS and that means the site developer gets to determine what goes into a BMS, which can lead to inadequate provisions, missing information, and unfair outcomes for lot owners.

A BMS is a complex legal and practical document that requires careful attention. For some developments, like those involving volumetric lots, additional surveying advice may be necessary to fully understand what spaces and responsibilities relate to your lot.

Our team has extensive experience advising commercial and residential lot owners on their rights and obligations under Building Management Statements. If you're unsure about your responsibilities, contributions, or rights under a BMS, get in touch with us today.

Disclaimer: This advice is general in nature and is not intended to be legal advice.

If you would like legal advice, please call our office on (07) 5619 0440 and we would be pleased to assist you.