General

Owners Corporations established by virtue of the Subdivision Act 1988 and administered under the Owners Corporations Act 2006 and Owners Corporations Regulations 2007 come into existence with the registration by Land Registry of a subdivision, which contains multiple titles to the property.

Legislation creating and governing the activities of Owners Corporations is at the State Government Department of Consumer Affairs Victoria.

The legislation provides a legal mechanism to administer the affairs of people with a common interest in the ownership of property, which has been subdivided into multiple allotments.

A home unit owner automatically becomes a member of the respective Owners Corporation at the time of settling ownership of an allotment. The Owners Corporation members are charged with a legal responsibility to:

  • Insure the whole of the property for full replacement value
  • Administer the finances and common funds of the group of owners
  • Administer the secretarial functions including the conduct of meetings of members, documentation of minutes and dealing with all correspondence
  • Resolve disputes involving members of the Owners Corporation and enforce the Owners Corporation rules

Rules

All owners corporations in Victoria have rules for the control, management, administration, use or enjoyment of the common property of the lot.

By special resolution, the owners corporation can make or change rules or decide to rely on the model rules set out in the Owners Corporations Regulations 2007. The rules cover matters including car parking, noise, pets, use of lots, dispute resolution procedures and behaviour of owners, residents or guests. All owners and residents must be given a copy of the rules before they move in.

Owners corporations can apply to the Victorian Civil and Administrative Tribunal to enforce rules and the tribunal can enforce penalties for breaches of the rules.

Rules must be recorded at Land Victoria to be enforceable.

Owners corporations can make rules for:
  • Health, safety and security
  • committees and sub-committees
  • management and administration
  • use of common property
  • use of and works to lots
  • design of lots
  • behaviour of persons
  • dispute resolution
  • notices and documents
  • the common seal

Model Rules

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.

A number of provisions of the Model Rules may be unsatisfactory for certain Owners Corporations, for example the dispute resolution provisions; metering of services, apportionment of costs of services and owner’s rights to install a locking or safety device. Furthermore, if there is existing Special or Additional Rules, they need to be compared with the Model Rules, to ascertain whether the existing Special or Additional Rules have covered all matters dealt with by the Model Rules, otherwise the Model Rules will apply.

Consideration needs to be given to whether or not the existing Special or Additional Rules (if any) or the Model Rules require an amendment by a special resolution.

Prescribed Form for Model Rules

Administration

Each Owners Corporation is required by law to conduct an Annual General Meeting if it raises and pays out money.

The members voting at the Annual General Meeting may appoint a committee to:

  • Administer the affairs of the Owners Corporation between Annual General Meetings
  • Approve a statement of income and expenses for the previous year
  • Consider and adopt a budget of income and expenses for the current year including the determination of contributions and levies payable by the members
  • Consider the appointment of a Owners Corporation Manager

The Owners Corporation may appoint a Professional Owners Corporation Manager under under section 119 of Owners Corporations Act 2006, Subdivision Act 1988, who will assist members of the Owners Corporation by undertaking these administrative responsibilities.

The Owners Corporation Manager does not exercise any power within the Owners Corporation other than those activities, which have been delegated by the members at an Annual General Meeting.

The specific duties of the Owners Corporation Manager are detailed in the Contract of Appointment, which should be executed by the Owners Corporation and the appointed Manager.

Specific details regarding the appointment of a Owners Corporation Manager can be obtained by contacting an SCA (Vic) member or accessing their web site.