The First Meeting of an Owners Corporation.

The First Meeting with An Owners Corporation. Documents and Agenda Items That Must be Presented at the First Meeting

The first meeting of an Owners Corporation is a crucial step in the establishment of a well-functioning community of property owners and must be held within 6 months of the registration of the plan of subdivision. This meeting sets the groundwork for the management and administration of common areas including facilities. To ensure transparency, efficiency, and compliance with legal requirements, several key documents must be presented.

Below, we explain the essential documents and items that should be provided at this first meeting to comply with the Owners Corporations Act 2006.

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1. Proxies

A proxy for an Owners Corporation is a person appointed by a Lot Owner to attend meetings, vote on their behalf or act on the Committee.

As the initial owner is generally a Company, the Company must authorise an individual to act on its behalf.

Who can be a Proxy

A proxy can be another Lot Owner, a family member, a friend or a professional representative – a proxy does not need to be a member of the Owners Corporation.

Appointment of a Proxy

The appointment of a proxy must be in the prescribed form, authorise an individual to act on behalf of the Lot Owner (including the proxy’s name), specify the duration of appointment and include specific instructions about how the proxy should vote and be delivered to the Secretary of the Owners Corporation.

Scope of Authority

A proxy can be granted full authority to make decisions or restricted authority to vote only on specific matters and according to the instructions given by the Lot Owner.

Duration of Proxy Appointment

The proxy appointment can be for a single meeting, a specific period or ongoing (maximum 12 months). The Lot Owner can cancel or amend the proxy appointment at any time by notifying the Owners Corporation in writing.

Obligations

An individual acting as a proxy must act honestly, in good faith and exercise due care and diligence.

2. The Owners Corporation Register

The Owners Corporation Register should be presented, listing the Owners Corporation plan number and address, details of all Lot Owners, the name of the manager and contact details of the Manager, the total Lot liability and total entitlements and the liability and entitlement for each Lot affected by the owners corporation, the basis for setting the Lot liability and Lot entitlement, details of any notices or orders, details of any contracts, leases and licences entered into by the Owners Corporation and insurance policies taken out by the Owners Corporation.

This register ensures accurate communication and record-keeping within the Owners Corporation and must be kept up to date by the Owners Corporation.

As per the Owners Corporations Act 2006, it is a legislative requirement that the Owners Corporation register is provided at the first meeting of the Owners Corporation by the initial owner.

The Knight can assist with preparing the Owners Corporation Register.

3. Plan of Subdivision and all related building plans, planning documents and other relevant documents

These key documents provide clarity and compliance regarding the property’s structure and governance and typically include:

Plan of Subdivision

The Plan of Subdivision details the division of the property into individual Lots and common areas. It defines the boundaries, Lot entitlement and liability, the location of each unit or Lot, along with shared spaces such as gardens, driveways, or recreational areas and any easements on title. This document is essential for understanding the delineation between common and private property and how this impacts the responsibilities of the Owners Corporation and Lot Owners.

Building plans

Building plans are the detailed architectural drawing showing the design and layout of the Lots and buildings on the property which include floor plans, elevations, cross-sections and details of construction materials and methods which are useful for maintenance planning and understanding the shared facilities and structural details.

Planning documents

This includes the planning permit and any document that was provided to and endorsed by the relevant planning authority in order to obtain the planning permit required for the development. It may also include documents outlining any zoning requirements or conditions imposed by the planning authority or any amendments to the original planning permit. The planning permit is essential so the Owners Corporation can understand any obligations that are required to be satisfied as per the planning permit.

4. Owners Corporation Rules

A set of model rules automatically apply to all Owners Corporations which are set out in Schedule 2 of the Owners Corporations Regulations 2018.

The Owners Corporation additional rules outline the governing principles for specific aspects of the property. These additional rules regulate the use of common areas, noise restrictions, parking arrangements, and other community-related concerns. Presenting these additional rules at the first meeting ensures that all members are aware of their rights and obligations.

The approved Owners Corporation additional rules are generally registered at the Titles Office together with the Plan of Subdivision.

Additional rules should initially be prepared by a lawyer who specialises in the Owners Corporation sector. The Knight can then assist with reviewing the proposed Owners Corporation additional rules to ensure they align with best practices before lodging with the Titles Office.

5. Budget

The proposed budget for the first year of the Owners Corporation must be presented at the first meeting for consideration and approval. The budget outlines expected expenses for maintenance, insurance, and other operational costs for the Owners Corporation and reflects the Owners Corporation fees that will be paid by each Lot.

As per the Owners Corporations and Other Acts Amendment Act 2021, it is a legislative requirement that the initial owner must not propose an unreasonable and unsustainable budget of the Owners Corporation at the first meeting.

The Knight will assist with preparing a realistic budget for the first year by reviewing the plans and drawings to ensure all operational requirements and associated costs are captured and seek formal quotes from suppliers and contractors ensuring accuracy and transparency.

6. Insurance Policy Details & Valuation

Adequate insurance coverage is a legal requirement for Owners Corporations where multi-level developments must take out reinstatement and replacement insurance for all buildings on the common property, public liability and other required coverage in relation to the property. Members should be informed of the extent of the coverage and any premiums payable.

Insurance Policy

As per the Owners Corporations Act 2006, it is a legislative requirement for the initial owner to provide any insurance policies in force in relation to the property.

Insurance Valuation

As per the Owners Corporations Act 2006, it is a legislative requirement for an Owners Corporation to obtain a valuation every 5 years which ensures that the Owners Corporation reinstatement and replacement value coverage is adequate.

As part of the first year budget for an Owners Corporation, The Knight recommends including a budget item for obtaining a valuation. This valuation is essential for determining adequate insurance coverage and ensuring compliance with legislation.

7. Maintenance Plan (Long Term Maintenance Plan)

A long-term maintenance plan provides an overview of the long-term maintenance needs of a building or property managed by the Owners Corporation which covers major capital items for repair and replacement over the next 10+ years. This document outlines the present condition of the major capital items, expected costs and timeline for repair and replacement.

As per the Owners Corporations Act 2006, it is a legislative requirement that all Tier 1 and Tier 2 Owners Corporations (51+ Occupiable Lots within an Owners Corporation) prepare and approve a maintenance plan. However, all Owners Corporations, no matter the size, would benefit from having a long-term maintenance plan to keep the property in a good state of repair and avoid any substantial special levies.

As per the Owners Corporations Act 2006, it is a legislative requirement for Tier 1 and Tier 2 (>51 occupiable Lots) Owners Corporations that a maintenance plan is provided at the first meeting of the Owners Corporation by the initial owner.

The original project quantity surveyor may be best placed to assist the initial owner to prepare a Maintenance Plan to provide at the first meeting of the Owners Corporation, alternatively, The Knight can recommend consultants who can prepare a Maintenance Plan.

8. Appointment of the Committee and Office Holders

At the first meeting of the Owners Corporation, the Committee and Office Holders are appointed to establish its governance structure and to assist the appointed Owners Corporation Manager with decision making..

The appointment of Office Holders includes the appointment of the Chairperson and Secretary of the Owners Corporation.

As per the Owners Corporations Act 2006, it is a legislative requirement that if an Owners Corporation has 10 or more Lots that the Owners Corporation must elect a Committee at each Annual General Meeting and the members of the Committee must appoint a Chairperson.

As per the Owners Corporations Act 2006, a Committee of an Owners Corporation must have at least 3 members and not more than 7 members.

As per the Owners Corporations and Other Acts Amendment Act 2021, it is a legislative requirement that the initial owner must not vote on any resolution that relates to a defect in or on a building on the Plan of Subdivision.

9. Contracts, Leases and Licences binding or benefiting the Owners Corporation

These documents are critical for understanding ongoing obligations, entitlements and arrangements which may include the following:

Contracts

Contracts may include:

Maintenance and Service Agreements for ongoing services such as cleaning, landscaping, security, waste management or maintenance of shared facilities (e.g. lifts, pools or building management and/or concierge services);
Utilities and Essential Services with utility providers (electricity, gas, internet, telephone, water) for common property areas; and
Owners Corporation Management Agreement to appoint a third party to manage and oversee the administrative and operational responsibilities of the Owners Corporation.
As per the Owners Corporations Act 2006, the following legislative requirements apply to the initial owner:
- the initial owner must not be appointed as the Manager of the Owners Corporation;
- the initial owner must not receive any payment from the appointed Manager;
- the initial owner must disclose any relationship with the Manager and any immediate or future financial transactions that will arise or benefit the initial owner; and
- the appointment of a Manager must not exceed 3 years.
- The Knight will prepare its management agreement for consideration and acceptance by the initial owner.

The Knight will assist with procuring the above contracts and agreements from suppliers and contractors who are competitive, reputable and commit to safe work practices in addition to meeting any obligations as per the installation warranties. We also ensure that the contracts and agreements align with the first year Owners Corporation budget to ensure transparency and correct allocation of funds between multiple Owners Corporations (if applicable).

Leases

Leases may include:

Common Property Leases where parts of the Common Property (i.e. car parks, retail spaces or recreational areas) are leased to third parties; and
Exclusive Use Areas granting exclusive use of certain areas, such as rooftop spaces or storage units, that are part of the common property.
As per the Owners Corporations Act 2006, it is a legislative requirement that the initial owner must not designate as a private Lot what normally would be common property or services.

Licences

Licences may include the following:

Access Licences granting third parties to access the property for specific purposes, such as maintaining equipment;
Use Licences allowing the use of common property facilities for external or commercial purposes such as retail outdoor seating licence; and
Shared Facility Licence granting third parties to allow use to share facilities or infrastructure.

It is strongly recommended that the initial owner consults with their legal team regarding any contracts, leases and licences binding or benefiting the Owners Corporation as the legal professionals can assist in the preparation, review and verification of these documents, ensure they are compliant with legal requirements and serve the long term interests of the Owners Corporation.

As per the Owners Corporations Act 2006, it is a legislative requirement that if the initial owner enters into a contract that relates to the Owners Corporation and benefits the initial owner, the term must not exceed 3 years in duration, unless the term is in a contract that is a hotel and resort management contract.

As per the Owners Corporations Act 2006, it is also a legislative requirement that any contracts, leases and licences binding on or benefiting the Owners Corporation is provided at the first meeting of the Owners Corporation by the initial owner.

10. Building Maintenance Manual

The building maintenance manual is an essential document which acts as a reference for the Owners Corporation to ensure critical maintenance is carried out to all equipment located on common property.

As per the Owners Corporations Act 2006, it is a legislative requirement that the building manual is approved by a relevant building surveyor under section 41B(1) and 44A of the Building Act 1993 and provided at the first meeting of the Owners Corporation by the initial owner.

As per the Building Act 1993, the relevant building surveyor must give a copy of an approved building manual to the applicant for the occupancy permit at the same time the relevant building surveyor issues the occupancy permit to the applicant. As per the Owners Corporations Act 2006, it is a legislative requirement that the building maintenance manual is provided at the first meeting of the Owners Corporation by the initial owner.

11. Asset Register

An asset register is a comprehensive record of an Owners Corporation’s assets. It provides detailed information about each asset, enabling efficient tracking, management and reporting. The purpose of an asset register is to ensure that assets are used effectively, properly maintained and accounted for.

An asset register generally includes information such as an asset’s name and description, serial number, make & model, location, purchase details and maintenance records.

As per the Owners Corporations Act 2006, it is a legislative requirement that an asset register is provided at the first meeting of the Owners Corporation by the initial owner.

12. Copies of Warranties

Copies of warranties are essential for the Owners Corporation to understand the terms and conditions of a warranty provided by suppliers for equipment or services installed on common property.

This ensures that the Owners Corporation can follow the terms and conditions of a warranty so that the Owners Corporation does not void the warranty.

As per the Owners Corporations Act 2006, it is a legislative requirement that the Owners Corporation is provided with a detailed list which identifies the names of companies, trades or suppliers who have provided a warranty or guarantee for any equipment and services installed on common property as well as copies of all warranties and guarantees at the first meeting of the Owners Corporation by the initial owner.

It is also a legislative requirement that any warranty or guarantee must be assigned to the Owner Corporation if the warranty holder is the sole beneficiary of the terms of the warranty and where a warranty is capable of being assigned to the Owners Corporation.

13. Copies of any specifications, reports, certificates, permits, notices or orders

These documents are essential for the Owners Corporation to ensure transparency and compliance with legal requirements.

These documents typically include:

Specifications

This could include any plans and designs of the property, including architectural drawings, engineering specifications, and any other relevant construction details.

Reports

Reports could include building inspection reports, soil testing reports and any environmental assessments conducted during the construction phase or structural integrity or defect reports (if applicable).

Certificates

Certificates are vital to ensure the Owners Corporation complies with their requirements.

Certificates include documents such as:

Occupancy permit certificate and certificate of final inspection;
The practical completion certificate issued to the Builder to understand the expiration of the defects liability period;
Certificates of compliance for essential services such as plumbing, electrical and fire safety systems; and
Certificates of warranty for building materials or systems like lifts, HVAC or other major installations.

Permits

This could include planning and building permits issued by the local council or relevant authorities or permits for specific systems, such as lifts, swimming pools and/or spas, or solar panel installations.

Notices or Orders

Notices could include any notices from local councils or authorities related to the property such as planning amendments, zoning changes or compliance notices.

Orders including any orders issued for rectification for minor or stop works, emergency orders or other legal notices that might affect the Owners Corporation.

As per the Owners Corporations Act 2006, it is a legislative requirement that copies of any specifications, reports, certificates, permits, notices or orders are provided at the first meeting of the Owners Corporation by the initial owner.

Providing these documents ensures that the Owners Corporation has a complete understanding of the property, its compliance status and any ongoing obligations or issues requiring attention.

14. Legal and Regulatory Documents

Any relevant laws, regulations, or codes of conduct governing the operation of Owners Corporations in the jurisdiction should be made available, such as; the Owners Corporations Act 2006 and its Regulations and the Subdivision Act 1988 and its Regulations. These documents provide members with a clear understanding of their legal obligations and rights.

As per the Owners Corporations Act 2006, it is a legislative requirement that a copy of the Owners Corporations Act 2006 and the Regulations and the Subdivision Act 1988 and the Regulations are provided at the first meeting of the Owners Corporation by the initial owner.

The Knight holds copies of the relevant laws and regulations that govern an Owners Corporation.

Conclusion

Providing these documents at the first meeting of an Owners Corporation sets a strong foundation for effective Owners Corporation management and fosters trust among members. Ensuring that the Owners Corporation has access to these important documents promotes transparency, efficiency and maintenance compliance for the benefit of the Owners Corporation and reputation of the project development team. By adhering to these guidelines, the Owners Corporation can establish a framework for a harmonious and well-managed community.

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