Owners Corporation Law > Governing Legislation & Regulations

New laws have significantly changed the landscape for the one in four Victorians who own or occupy property in more than 65,000 owners corporations in Victoria.

The Owners Corporations Act 2006 [the Act] commenced on 31 December 2007. Coinciding with the commencement and change of terminology, IBCMV has changed its name to Owners Corporations Victoria [OCV]. OCV, the peak body which represents more than 80% of all professional owners corporation managers, managing 250,000 lots, has worked with the Victorian Government during the preparation of the new laws and is pleased that the Government has accepted many of its recommendations.

The new regulatory regime aims to improve transparency and financial accountability in the management of owners corporations and we welcome new dispute resolution provisions, but more onerous regulatory compliance will result in higher costs to be borne by owners.

With 65,000 owners corporations and 500,000 lots in Victoria, about 1,000,000 Victorians or 1 in 4 people are living in or affected by owners corporations.

Owners corporations play an important role in maintaining property and sustaining residential property values in Victoria.

Owners corporations comprise of residential properties ranging from 2 units in a suburban street to many hundreds of units in an urban tower block. Owners corporations also encompass commercial, retail, lifestyle resorts, retirement villages, car parks, storage facilities, industrial and, increasingly, mixed developments with more than one form of development.

This legislation represents a huge shift in public policy and completely changes the rules we’ve been working under for a generation. Under the new Act, the term Body Corporate is replaced with Owners Corporation. The name change is the least of the amendments. Owners corporations now have more legal responsibilities for matters including financial management, record keeping, dealing with complaints and meeting procedures.

Owners Corporation Managers deal with:

Managers are now required to be registered and it is an offence to carry out any function as the manager for fee or reward unless the person is registered under Part 12 of the Act.

The committee now becomes the executive of the owners corporation and acts as the owners corporation between general meetings. A committee has all the powers and functions that may be delegated by the Owners Corporation save for those requiring a unanimous resolution or a special resolution or where the Owners Corporation has otherwise determined must be decided by ordinary resolution at a general meeting

The model rules prescribed by the regulations apply if there are no rules. If there are existing registered special or additional rules then if the model rules provide for a matter and the existing rules of the Owners Corporation do not then the model rules will now apply.

Prescribed Owners Corporations include a development with more than 100 lots (separate Owners Corporations for storage lots, car parking lots and accessory lots are included in the lot total) or total annual fees exceeding $200,000 and must have a 10 year maintenance plan, have financial statements audited, and obtain valuations for insurance purposes .

There is a 3 tier system for dispute resolution - Internal, CAV and Victorian Civil & Administrative Tribunal [VCAT]. The internal dispute resolution procedure is prescribed both in Part 10 under the Act and in the model rules. Notice of 28 days and a final notice of a further 28 days must be given to rectify breaches or failure to pay fees and charges.

An owners corporation certificate is required to be attached to the Section 32 statement of the contract of sale.

An owners corporation is required to have a register of important information, and has 9 months from commencement to establish its owners corporation register.

Under the Act there is now available from Consumer Affairs Victoria [CAV] the Approved Forms and Notices, such as Fee Notices for example.

A Guide for owners corporations has been developed by CAV - "Owning, managing and living in a unit or apartment: Guide to owners corporations". Printed copies are available or you can download it from the CAV web site.

CAV also have on their web site a range of fact sheets that provide information and sample documents about running an owners corporation.

Following strong representations from OCV, the Fair Trading and Consumer Acts Further Amendment Bill 2007 received Royal Assent on 11 February 2008. So the amendments mean a new version of the Owners Corporations Act 2006 was effective as of 12 February 2008. OCV has been working hard to represent the needs and concerns of its members as well as the interests of owners and occupiers alike. OCV is grateful to the Minister, Consumer Affairs Victoria and to Members of the Parliament of Victoria for the opportunity to express its view and make recommendations as the primary stakeholder representing the needs of its members - professional Owners Corporations managers - as well as the interests of consumers

The important changes that OCV recommended and has successfully lobbied for include allowing a manager to act as chair of a general meeting, and as secretary to ensure proper and effective conduct of meetings and proxies/ballots. Despite strong representations from OCV, the Owners Corporations Act 2006 did not initially recognise the important role of professional managers in the smooth and consistent running of Owners Corporations.

Another important change is the varying of the owners corporation certificate fee structure to setting a maximum fee rather than the prescribed fee. The change allows an Owners Corporation to determine the fee payable up to the prescribed fee - $150.00. OCV did not support this amendment, which requires each Owners Corporation to set a fee not exceeding $150.00. It believes this introduces unnecessary complexity. It predicts that instead of the anticipated range of fees set based on cost recovery, the vast majority of Owners Corporations will set the maximum fee.