Quite simply, an Owners Corporation manages all dealings of the common property of a residential, commercial, retail, industrial or mixed-use plan of subdivision.

When a plan of subdivision is registered with Land Victoria an Owners Corporation is created. The person that owns the Lot within a Plan of Subdivision becomes a member of the Owners Corporation.

Quite simply, an Owners Corporation manages all dealings of the common property of a residential, commercial, retail, industrial or mixed-use plan of subdivision.

When a plan of subdivision is registered with Land Victoria an Owners Corporation is created. The person that owns the Lot within a Plan of Subdivision becomes a member of the Owners Corporation.

An Owners Corporation Committee is a group of between three (3) and seven (7) members (or up to 12 if resolved by Ordinary Resolution) who are appointed each year at the Annual General Meeting.

The Committee governs management of the Owners Corporation until a new Committee is appointed at the next Annual General Meeting. In most cases, the Owners Corporation delegates powers to the Committee of Management to make decisions about the building’s day-to-day operations.

An Owners Corporation with ten or more Lots must elect a committee at each Annual General Meeting. The Knight recommends a Committee of Management be appointed regardless of the size of the Owners Corporation, and that the maximum number of Committee members be limited to seven.

In larger properties, the Owners Corporation may choose to employ a Building Manager to assist with the building’s day-to-day operations. The Building Manager communicates with the Committee and Owners Corporation Manager to report all issues they encounter during their daily activities.

The role of an Owners Corporation Manager is to ensure that the Owners Corporation operates effectively and meets all legislative requirements. A professional and experienced Manager should be appointed to this role. The Manager is responsible for the Owners Corporation’s operations. This includes regularly communicating with the Committee, providing advice and direction, and completing various tasks. If a Committee is involved, it is critical for the Manager to work closely with its members, in order to properly understand how the Committee wants the Owners Corporation managed.

The management and conduct of Owners Corporations is essentially governed by the Owners Corporations Act 2006, Subdivision Act 1988, associated Regulations 2007, Model Rules, Standard Rules and other Rules (as determined by each Owners Corporation).

All Owners Corporations have rules for the purpose of controlling, administering, managing, using and/or enjoying common property and Lots. If an Owners Corporation doesn’t make its own rules, a set of model rules outlined in the Owners Corporations Regulations 2007 will apply.

Whilst an owner will receive the rules at the time of the purchase of a Lot, by law, each and every tenant must receive a copy of the rules at the time they move in. Owners Corporations collectively and owners individually can apply to VCAT to enforce rules and the tribunal can impose penalties for breaches of rules (refer to Part 10 and 11 of the Owners Corporations Act 2006 respectively).

We actively seek to resolve any complaints and disputes however in the instance where there are pending issues, they must be presented to the Owners Corporation in writing.

According to The Owners Corporations Act 2006 the Owners Corporation must have an internal dispute resolution process to handle complaints about breaches of the Rules, Act and/or Regulations. This must be sited prior to the Owners Corporation making an application to VCAT in the event the complaint cannot be resolved.

As an individual and as a member of the Owners Corporation you have the right to make an application directly to VCAT. VCAT has the authority to impose penalties for breaches of rules and make a wide range of other orders.

A building requires regular upkeep and long-term commitment, which optimises your asset. Maintenance plans have several benefits including reducing the likelihood of having to raise special levies to cover major works, equalizing maintenance contributions between new and old owners and well-funded Owners Corporations that plan for the future are more attractive to potential purchasers.

An Owners Corporation maintenance plan covers a number of items, which include:

• Major capital items for repairs and/or replacement over the next 10 years
• The present condition of those items
• When the items or components will need to be repaired or replaced
• The estimated cost of their repair and replacement
• The expected life of those items or components once repaired or replaced.

An OC with more than 50 lots must prepare and approve a maintenance plan. OCs under 51 lots do not have to prepare a maintenance plan but may do so.

We highly recommend that all Owners Corporations have a maintenance plan that identifies maintenance requirements.

An Owners Corporation Certificate must be attached to the Section 32 statement of the contract of sale. All Owners Corporations in Victoria are required to prepare and supply a certificate within ten business days to anyone who applies in writing and pays the relevant fee for the requested certificate. The Owners Corporation Certificate must include specific information and have relevant documents attached.

Levies are a critical part of ensuring you protect the value of your property. The Levies must be determined and administered by the Owners Corporation with the levy notices being issued on a regular basis. There are 4 types of Levies:

• Annual Operating Levy
• Maintenance Plan Levy
• Capital Project Levy
• Special Levy

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