Owning in a Victorian owners corporation: the basics

What an owners corporation is

When land or a building is subdivided into separately owned lots with shared common property — hallways, driveways, gardens, a roof, a lift — the plan of subdivision creates an owners corporation (the older term "body corporate" is still heard). Every lot owner is automatically a member; there's no opting in or out. It's a legal entity: it holds money, insures the common property, enters contracts, and makes decisions that bind all owners.

Many owners corporations appoint a professional owners corporation manager to handle the administration; smaller ones often run themselves. Either way, the decisions belong to the owners and their committee — a manager administers, it doesn't rule.

Which rules apply to your owners corporation

Every Victorian owners corporation runs under the Owners Corporations Act 2006. What differs is your tier. Since December 2021, owners corporations are sorted into five tiers by the number of lots, and the tier sets how much the corporation has to do:

• Tier 1 — more than 100 lots
• Tier 2 — 51 to 100 lots
• Tier 3 — 10 to 50 lots
• Tier 4 — 3 to 9 lots
• Tier 5 — 2-lot corporations, or ones that only cover shared services

Bigger tiers carry more obligations — audited or reviewed financial statements, maintenance plans and funds, a mandatory committee. Tier 5 corporations are exempt from a long list of requirements, right down to not needing a chairperson or secretary. Working out your tier is just a matter of counting the lots. (Owners corporations are created under the Subdivision Act 1988; your plan of subdivision shows yours.)

Who runs it: the committee

An owners corporation with 10 or more lots must elect a committee at each annual general meeting; smaller corporations can elect one but don't have to. A committee has at least three members and, by default, up to seven — a number the owners can lift to a maximum of twelve by ordinary resolution. The committee appoints a chairperson and a secretary. Where a corporation has no committee, the owners must still elect a chairperson.

The committee handles day-to-day decisions — routine maintenance, spending within the budget, enforcing the rules — and its resolutions count as decisions of the owners corporation. Members must act honestly, in good faith and with due care, disclose any conflict of interest, and decide things collectively; no office-holder, the chairperson included, can make unilateral decisions.

Where your fees go

Owners fund the corporation through fees (Victoria's term for levies), set at the AGM in line with the budget. Annual fees cover recurring costs like insurance, cleaning and routine repairs; special fees cover one-off larger costs. Larger owners corporations must also keep a maintenance plan and maintenance fund, so major long-term works are provided for in advance rather than landing as a shock; smaller tiers can choose to.

The meetings

An owners corporation that's required to must hold an annual general meeting each year, covering the finances, insurance, fees, the committee election and owner motions. Special general meetings can be called during the year for decisions that can't wait, and the committee meets through the year for operational matters (it can also make decisions outside meetings by ballot). Very small and services-only (Tier 5) corporations are exempt from some of these meeting requirements.

Most decisions pass by an ordinary resolution — a simple majority. The weightier ones need a special resolution, a much higher bar.

Your voice as an owner

Owning a lot gives you more than a vote once a year:

• Get an item on the agenda. You can ask for a matter to be placed on the agenda of the annual general meeting, so all owners vote on it.
• Call a special general meeting. Owners can require a special general meeting to be convened when something can't wait for the AGM.
• Use the grievance procedure. Every owners corporation has an internal dispute-resolution (grievance) process, and a grievance meeting must be held within 28 days of a dispute being raised.

When things go wrong

Disputes happen — over noise, pets, rules, maintenance, or how a decision was made. Raise it directly first, then through the corporation's internal grievance procedure.

If that doesn't resolve it, Consumer Affairs Victoria can assist and conciliate, and unresolved matters go to the Victorian Civil and Administrative Tribunal (VCAT), which can make binding orders.

The thread running through all of it

Whatever the decision — a fee, a rule, a big repair — what protects owners years later is the record of how it was made: what was decided, on what information, and by whom. That matters most with maintenance spending, where the quotes and the reasoning tend to live in someone's inbox and vanish when a manager or committee changes over. Building that record properly — and keeping it with the property rather than with whoever happens to be managing it this year — is the idea behind StrataTrade.