Can a strata insurance premium increase be charged to the affected lot after an arson attack?
Page 8 | Strata Insurance Solutions
If owners have not properly maintained their balconies, are all owners required to contribute to repairs?
Page 10 | Tisher Liner FC Law
Can owners lodge a complaint about smoke drift before new smoking by-laws are adopted?
Page 22 | The Knight
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Incidence of pedestal paving hiding water issues
What is the incidence of pedestal paving hiding water issues beneath?
The success of pedestal paving depends on elements beneath, including drainage, falls to substrates, membranes and upturns.
Pedestal paving has become more popular in the past 5-10 years, and our experience with water issues beneath is varied.
There is no specific Australian Standard yet that covers the paving installation. Therefore, installations rely on manufacturer recommendations combined with other standards such as waterproofing and drainage.
The success very much depends on elements beneath, including drainage, falls to substrates, membranes and upturns.
It can be a very effective product. I have seen some very good installations and some bad ones that have failed.
In instances where the substrate was incorrectly installed, issues have been undetected because they are not visible and difficult to access.
It is very difficult for building inspectors to check the substrate during a post completion inspection without lifting pavers. That becomes very time consuming and expensive for owners. For this reason, it can be a problematic area to regulate.
More often, I have seen blocked drainage due to build up where leaf and/or debris has fallen between joints.
Pedestal paving needs to be on a maintenance schedule where specific pavers are lifted above drainage points routinely so the paving can be inspected and cleaned.
Bruce McKenzie | Sedgwick bruce.mckenzie@au.sedgwick.com
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REPAIR SOLUTIONS
• Emergency make safe
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Can a strata insurance premium increase be charged to the affected lot after an arson attack?
After an arson attack on one shop, our complex’s commercial strata insurance premium will rise. The insurer advised that the increase is specifically due to the arson attack. Can the increase be passed onto the affected lot?
Generally, increased insurance costs must be shared across all lot owners as part of the general obligations of the owners corporation.
In Victoria, Section 23A(3)(a) of the Owners Corporations Act 2006 provides that an owners corporation may levy a lot owner a fee to cover the cost of an excess amount or an increased insurance premium, but only if the claim was caused by:
• a culpable or wilful act, or
• gross negligence of the lot owner, their lessee, or their guests.
In this instance, while you acknowledge the insurer has attributed the premium increase to the arson attack affecting one of the shops, Section 23A(3)(a) only takes effect where the arson (or other event leading to the claim) can be directly linked to the culpable or wilful act or gross negligence of a person in one of the categories above.
Unless the arsonist can be clearly identified as being the lot owner, their lessee, or their guest— and further, that their conduct meets the legal threshold of being culpable, wilful, or grossly negligent—the provision would not apply.
This is a high bar to meet, and mere suspicion or general attribution of risk would likely be insufficient to justify levying the increased premium to that specific lot.
Therefore, unless clear and admissible evidence exists linking the arsonist to one of those parties and showing the necessary level of fault, the increased insurance costs must be shared across all lot owners as part of the general obligations of the owners corporation.
Mention this offer when requesting a quote from us, and we will provide a discount off our standard fee for service of $250 (GST Inc) for buildings with 10-25 lots or $500 (GST Inc) for buildings with more than 25 lots for the first year you insure with Strata Insurance Solutions.
To redeem this offer email a copy of your current policy schedule to Strata Insurance Solutions within 1 month of the publication of this magazine. Your policy can expire any time in the next 12 months. However we can only provide quotes 30 days prior to the expiry of your policyif your policy is not due now, we will schedule a quote at the appropriate time. To ensure we apply this offer to our quotes, please specifically mention you would like to redeem the "LookUpStrata Special Offer".
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If owners have not properly maintained their balconies, are all owners required to contribute to repairs?
A third of the apartments in our block have balconies with significant damage. If owners have not properly maintained the balconies, are all owners required to contribute to the repairs?
Six of the 18 apartments in our building have substantial damage to the concrete floor of their balconies, while the remaining balconies have cosmetic damage.
On the strata subdivision documents, balconies do not appear to be common property. However, the owners corporation (OC) has billed all owners for repairs to the affected balconies.
When I contacted the owners corporation manager, they stated that owners are individually responsible for maintaining the internal aspects of their properties but are jointly responsible for maintaining the external aspects. The repair invoice suggests that internal work will be performed.
Additionally, in previous meeting minutes, the strata manager mentioned that owners must ensure balcony drainage holes are kept clear and the waterproofing membrane is monitored to prevent water from egressing onto the common property. Does this imply owners contributed to the damage by failing to maintain their balconies?
If so, why are owners with structurally sound balconies— who maintained their internal aspects — required to share the cost of these repairs equally?
It is unusual for the slab under a balcony to be private lot property.
It is difficult to provide an answer without seeing the plan of subdivision. It is unusual for the slab under a balcony to be private lot property. Normally, it is common property. If it were common property, the structural slab would generally not be subject to the benefit principle
If the slab is not common property but rather private lot property, the private lot owner will be responsible for the cost of repair. However, the OC would need to have provided a Section 48 notice requiring the repairs to be undertaken and the owner to be given 28 days to do so. If the boundary of the balcony is internal face, the slab will be common property, and the waterproof membrane will be private lot responsibility.
Phillip Leaman | Tisher Liner FC Law ocenquiry@tlfc.com.au
When should the committee refer a decision to all lot owners?
Does the duty to act in the interests of the owners corporation mean that committee members must prevent actions that don’t reflect the will of the full ownership, and refer such matters to a special general meeting?
The Owners Corporation Act 2006 at section 117, “Duties of members of committees and sub-committees”, requires, in addition to (a) acting honestly and in good faith, and (b) exercising due care and diligence, that they:
c. act in the interests of the owners corporation.
Does (c) mean:
i. owners corporation committee members must prevent matters from happening if they know those matters do not reflect the “will” of the entire owners corporation?
ii. that such matters should go to a special general meeting initiated by the chairperson or secretary under s 74(a) or (b)?
It’s up to the committee if they believe a decision is necessary to be brought before all owners.
It’s entirely up to the committee if they believe a decision is necessary to be brought before all owners, especially when they have the power to decide in the first place.
The owners elect the committee each year, and they do so on the basis that those members will not only comply with their obligations under the Act, but also make decisions which benefit and add value to the entire owners corporation. It’s entirely possible that in some circumstances, not everyone will receive exactly what they want. This is the nature of shared communities.
There is still a mechanism within the Act that allows for a Special General Meeting to be called by a lot owner who represents 25%, and so if the “will” of the rest of the owners is being ignored, then endorsing an individual to convene a meeting should not be difficult to achieve. Refer to section 74.
Joel Chamberlain | Horizon Strata Management Group joel.chamberlain@horizonstrata.com.au
A Refreshing Approach to Strata Management
Experienced and Professional Owners Corporation Managers in Melbourne
At Horizon Strata, we make sure the job gets done properly without all the fuss.
Owners Corporation management requires expert knowledge as well as forward logical thinking to allow residents to live harmoniously, and owners to have peace of mind.
Horizon takes great pride in operating under these principles. This allows us to provide premium and transparent management for any strata-titled property.
Together with the day to day running of your Owners Corporation we provide comprehensive services which support owners through some of the most difficult & complex projects.
We are experienced in handling:
• Combustible Cladding
• Building Defects
• Financial Management
• Insurance Matters
Horizon does not take commissions or rebates from any supplier or Insurance provider. Our buildings under management range from 20 to 400 Lots so you can be assured we have the capability to manage your Owners Corporation, no matter the size.
How can owners corporations control costs when repairing concrete spalling?
It’s difficult for owners corporations to control costs when repairing spalling. How do we receive a reliable estimate for concrete spalling repairs?
How do we know how much it is going to cost to fix spalling? We understand why it’s difficult to get a true estimate, but at the same time, our capital works fund isn’t a bottomless bucket. How can owners corporations control costs when repairing concrete spalling?
Have an engineer provide a detailed scope of works first.
Get an expert involved to supply a defined scope of work detailing what work needs to be done. I recommend you spend a little more upfront on an engineer to carry out exploratory work. They can remove the concrete in some areas to get a better idea of the extent of the damage. The engineer can then clearly define the scope of work.
When you approach builders for quotes, you’ll give them the best opportunity to price the work accurately. Don’t go to a builder saying “Can you give me a quote to repair spalling.” If the builder does not know the extent of the work, their quote will include a buffer to ensure they cover themselves. Getting an expert to provide a detailed scope of work first will give the committee the best chance of successfully controlling costs.
Bruce McKenzie | Sedgwick bruce.mckenzie@au.sedgwick.com
What We Check:
• ABNs, ACNs, business registrations
• Licence & certification validity
• Insurance: Public Liability, Workers Comp, Indemnity
• Peace of mind knowing contractors are verified for the work
Onsite QR Code Tracking:
• QR code installed at building entrances
• Contractors scan in and out on arrival/departure
• Email alerts notify a representative of who’s onsite and the work performed
(Contractor Connect provides services to the Strata Industry in partnership with QIA Group )
• Verify Contractor registration details
• Confirm licenses & suitability
• Check insurance cover & currency
• Know when a Contractor is on-site
• Verify work performed with invoices
• Avoid invoice fraud & disagreements
• Online system for inducting Contractors
• Access to key building documents
• Provide & confirm safety requirements
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Expert Owners Corporation Lawyers
Voting at Meetings - Ordinary Resolutions
So a lot owner turns up to an AGM or SGM How does voting work?
The legislation is confusing There are different rules and requirements for ordinary resolutions as opposed to special or unanimous resolutions. In this blog, we will deal with ordinary resolutions, voting by polls and written votes.
For
ordinary resolutions
Section 87 of the Owners Corporations Act 2006 provides that for any resolution of an Owners Corporation there is to be one vote for each lot, whether the resolution is voted on at a meeting or by ballot
Section 89(1) of the OC Act provides that a person may vote on a resolution at a meeting by a show of hands or in another prescribed manner unless the meeting resolves otherwise
The prescribed manner is set out in Regulation 7B of the Owners Corporations Regulations 2018 The prescribed manner, whether hard copy or electronic, includes the following
(a) the Owners Corporation plan number;
(b) the lot owner's name and address;
(c) the lot number;
(d) the closing date for the vote;
(e) the text of the motion;
(f) any voting instructions;
(
g) if the vote is being cast by proxy, the name of the proxy;
(h) a statement that explains the implications of abstaining from a motion;
(i) a statement that the lot owner has the right to appoint a proxy;
(
j) the signature of the lot owner or the proxy and the date of the signature;
(k) whether the motion requires an ordinary resolution, a special resolution or a unanimous resolution
I would be surprised if anyone uses the prescribed manner with the amount of detail set out above given the level of detail and information that a voting form would be required to have
Section 89 (3) provides that a lot owner may (either in person or by proxy) before or after the vote is taken for an ordinary resolution require that a poll be taken based on one vote for each unit of lot entitlement This effectively cancels out Section 87
Voting in a poll must be by written vote
Section 89A provides that chairpersons also have a second or casting vote if there is a voting deadlock
An ordinary resolution shall be passed if a simple majority of votes cast at the meeting vote in favour of the resolution
So what does the above mean?
For ordinary resolutions, if a poll is called, voting is based on lot entitlement So if each lot has an unequal distribution of lot entitlement, voting results can be different if someone asks for a poll (as opposed to a show of hands where everyone gets one vote per lot)
What is also important is the fact that the vote passes if a simple majority of votes vote in favour of the resolution This is important because an abstain is not a vote A vote is either in favour or against a motion A lot owner abstaining is not actually casting a vote and should not be counted for the purpose of whether the vote passes
This can be relevant in circumstances such as the following example:
Where there are 10 lot owners in attendance and there is a show of hands 4 people vote in favour of the resolution, 3 people vote against the resolution and 3 people abstain because they want to pick a side In this circumstance, the vote passes because there is a simple majority in favour of the resolution even though only 4 out of 10 people present voted in favour of the resolution
Therefore, it is always important to vote (whether for or against)
What is a written vote?
The legislation does not specify what is a written vote It does not refer back to the term “prescribed manner ” which is the voting form required under Section 7B so arguably might mean something less formal than set out in Section 7B In either case, it should have as a minimum, the lot number, the resolution being voted on and the vote (i e in favour or against) Ideally, it would include the lot owner ’ s name and address, signature and if the vote is being cast by proxy, the name of the proxy holder Some of those matters could be omitted depending on the circumstance For example, that additional information is more likely required in circumstances where there is a number of attendees but probably can be dispensed wit h when there is say only a handful of lot owners present and the person running the meeting (i e the manager) knows each of the lot owners and is personally collected the voting forms confirming they are from the persons authorised to vote on the respective lot owners behalf
In our view, the preferred course would be to have all written votes compliant with the requirements in Section 7B to avoid any argument that the vote is not valid
All voting forms should be held as part of the records of the Owners Corporation and be available should a challenge after the meeting occur
Summary
It is important that procedure under the Act is followed. Where possible ensure that all written voting complies with the requirements of Section 7B of the Regulations or has the maximum amount of information available in the circumstances Preparation is important Managers should be prepared with the ability to conduct electronic voting or paper voting
Elections of committees also constitute resolutions which means that each nominee should be voted on as an ordinary resolution
Need advice or assistance in a VCAT case?
Phillip Leaman LLB
Phillip Leaman, principal of the Owners Corporations practice group of Tisher Liner FC Law and his very experienced team can provide assistance to Owners Corporations, committees, lot owners and managers in a range of Owners Corporations legal matters We have substantial experience in taking actions against builders, building surveyors, architects and plumbers for original building defects on common property and private lot property
We also act for lot owners and Owners Corporations in respect to Owners Corporation governance and assisting managers and committees
We believe Owners Corporations want to maintain peaceful, functional living environments for owners Our mission is to provide a fresh perspective on resolving legal disputes and to inspire Owners Corporations to achieve outcomes that preserves the value of assets and restores harmony We are expert Owners Corporations lawyers For advice or assistance, please contact Phillip Leaman
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Dividing the proceeds of a collective sale: What’s fair and what’s legal in Victoria?
How are the proceeds from the collective sale of a strata building divided amongst all lot owners? Is the money distributed based on lot entitlement, market value, or do owners come to some sort of agreement?
The distribution of sale proceeds is typically determined by agreement among the lot owners.
A collective sale involves selling an entire building, including all individual lots and common property, to a third party. Owners may opt for a collective sale for a range of reasons, which often include unlocking the redevelopment potential of the land, avoiding escalating repair costs and future special levies, and simplifying the management of ageing buildings, particularly when a developer offers a premium that far exceeds the value of selling lots individually.
In Victoria, this process is governed by the Subdivision Act 1988, and it requires the termination of the plan of subdivision. Under section 32 of the Act, Victoria requires unanimous consent. This is stricter than other states like NSW and WA, where only 75% owner approval is needed. International thresholds vary between 80% and 100%. While the legislation refers to the consent of ‘members’, in practice the interests of mortgagees and tenants may also need to be considered.
Once a collective sale is completed, the distribution of sale proceeds is not governed by statute. Instead, it is typically determined by agreement among the lot owners. Common approaches include:
• Lot entitlement: where proceeds are apportioned according to lot entitlement as recorded on the plan of subdivision, reflecting the proportional ownership interest in the scheme.
• Market Valuation: Independent valuations can be used to assess the fair market value of each lot, which can result in a more tailored and equitable distribution, particularly where lot sizes or conditions vary significantly.
• Negotiated Agreement: Owners may agree to a bespoke formula for distribution, taking into account qualitative factors such as views or lot size.
The best method for distributing proceeds from a collective sale often depends on the circumstances of the property and the preferences of the owners, but there is an argument that apportioning based on independent market valuations is generally the most equitable.
This approach reflects the actual value of each lot at the time of sale, taking into account differences in size, condition, orientation, and improvements. While using lot entitlements is simpler, it may not fairly account for variations in market value between lots. A negotiated formula can work well where owners are cooperative and the differences are well understood, but it can also lead to disputes if not clearly documented.
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Are we required to complete a tax return?
We are a small, self-managed property with three lots and limited funds. Are we required to complete a tax return?
We are a small, self-managed property of three lots. We don’t have much money in the owners corporation funds. Is there a threshold we need to consider before we pay taxes or submit a tax return?
Our levies are set at $275 each per quarter, with minimal overheads apart from water bills, building insurance, and the occasional building valuation. Are we required to complete a tax return?
Whilst there may be no legal requirement to lodge a tax return, our general practice every year is to lodge a client update form, telling the ATO that a return is not required.
Owners corporations are taxed as public companies, so there is no tax-free threshold. As soon as you earn more than a dollar of accessible income, such as interest, you are required to lodge a tax return.
In this situation, I’ll assume there is no interest income in the accounts. Whilst there is no legal requirement to lodge a tax return, our general practice every single year is to inform the ATO that a return is not required. Otherwise, in three or four year’s time, the ATO may say, “Strata plan A has not lodged a tax return since 2001. Please lodge them now, even if they’re all nil.” If you don’t submit this within 30 days, the ATO will fine you $900 per year, so we recommend submitting a client update form to the ATO annually to confirm that your building is not required to lodge a return.
Rod Laws | TINWORTH & CO RodLaws@tinworth.com
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Can owners lodge a complaint about smoke drift before new smoking by-laws are adopted?
Can an owner raise a grievance about smoke drift from neighbouring lots before the owners corporation formally adopts the new smoking by-laws?
I own an apartment and am experiencing smoke drift from my neighbours. I have a health condition that puts me at high risk for a stroke, and the smoke is a genuine hazard to my health.
With the new rules regarding smoking not impinging on neighbouring lots, can I submit a grievance form to the owners corporation (OC), or must the OC include this rule in the by-laws before I can submit my complaint?
A new model rule updated from December 1 2021, automatically applies to all residents of your OC and can be enforced.
The model rules were updated from December 1, 2021, to include:
1.4 Smoke
penetration
A lot owner or occupier in a multi-level development must ensure that smoke caused by the smoking of tobacco or any other substance by the owner or occupier, or any invitee of the owner or occupier, on the lot does not penetrate to the common property or any other lot.
From this date, this rule applies to all owners corporations and supersedes any older rules which may be registered with your plan of subdivision.
In other words, this rule automatically applies to all residents of your OC and can be enforced.
When you submit a formal complaint, your grievance committee (or the committee of management if there is no grievance committee) will consider the information provided and then advise you of its decision and the next steps.
The committee is required to follow the dispute resolution process outlined in your rules before acting, which may involve you attending a grievance meeting.
Oftentimes, a casual conversation with your neighbour may provide a more effective and timely resolution: your neighbour may be unaware of the smoke drift and its impact on you and be willing to alter their behaviour once aware.
You could consider placing a letter in their mailbox, striking up a conversation in the hall (if possible), or asking your owners corporation manager or committee to alert them of the impact of their behaviour, before submitting a formal complaint.
Where a clear, intentional breach of model rule 1.4 becomes apparent, however, you are well within your rights to lodge a formal complaint if it cannot be resolved any other way.
Please remember to record the times and dates when you smell the smoke to formulate a logbook. This will help all parties understand how often the issue is occurring and may also be used as evidence at VCAT, should the matter be unresolved at an owners corporation level.
The Knight ella@theknight.com.au
Can common property
strata expenses be split equally instead of by lot liability?
Why are shared service costs like cleaning, gardening, and lift maintenance charged by lot liability instead of split equally among all lot owners?
Why is the cost associated with common area cleaning, courtyard gardening, checking exit and emergency lighting, lift contract fees, etc., paid using the lot liability method rather than equal charges, given that it benefits all lot owners equally?
These items and more can benefit all lot owners equally, whereas insurance can be paid using the lot liability method because of the differing area size.
In Victoria, costs are typically shared based on lot liability, which reflects each lot’s proportionate share of expenses. Equal sharing is only possible via unanimous resolution and formal recording.
Under owners corporation legislation, the reason these costs are paid using the lot liability method rather than split equally relates to the way lot liability is defined and applied under the law. In Victoria, the lot liability method is the default method used for cost sharing, and the lot liability of each lot is assigned when the plan of subdivision is registered. It reflects each lot’s proportionate share of owners corporation expenses and is usually based on the relative value or size of each lot.
The lot liability method is the standard method under the legislation for cost recovery due to its simplicity (what is equal and what is not?), consistency, and presumed fairness with regards to larger and higher value lots. With this being said, costs can be shared equally; however, this requires a unanimous resolution, and the change must be formally recorded properly.
Zac Gleeson | GQS zac@gqs.com.au
Can off-the-plan buyers request accurate levy details from developers before settlement?
Can an off-the-plan purchaser request accurate levy information from the developer before settlement to avoid future disputes or underestimation?
I expect to settle on an apartment mid2026 which was purchased off-the-plan in December 2021.
I am aware of circumstances where conflict arose after developers underestimated levies, resulting in increases. Can owners request that the developer provide details about the determination of levies?
How can I increase the likelihood of receiving an accurate levy figure at settlement?
The initial owner (developer) is legally required to propose a reasonable and sustainable budget at the inaugural general meeting of the owners corporation.
Under section 68(4B)(a) of the Owners Corporations Act 2006 (Vic), the developer (as the “initial owner”) must not propose an annual budget that is unreasonable or unsustainable. This legal obligation is intended to ensure that owners corporation levies are realistic and reflective of actual costs from the outset.
In addition, under section 68(1), the initial owner is required to act honestly, in good faith, and with due care and diligence in the interests of the owners corporation during the period in which they control the majority of lot entitlements.
The initial owner (being the applicant for registration of the plan of subdivision) is also responsible for convening the first meeting of the owners corporation within six months of registration of the plan. At this inaugural general meeting, the first annual budget for the owners corporation is approved, setting the levies for its initial financial year.
A purchaser’s solicitor or conveyancer should request a copy of the minutes of the inaugural general meeting, which will include the approved budget for the first financial year of the owners corporation. This may be accompanied by a detailed budget statement outlining expenses for insurance, maintenance, building and owners corporation management fees, utilities, and other operational costs. If a maintenance plan has been approved, contributions to the maintenance fund should also be included. The vendor’s solicitor should provide the figure required at settlement for an off-theplan purchase based on the approved budget.
Benefits of having an SCA Member as your Strata Manager
Choosing the right Strata Manager for your building is important If your Strata Manager is a member of the Strata Community Association (SCA), you will have someone who is professional, has expert knowledge and is dedicated to making sure your property is well managed
What sets an SCA member apart?
Expert Knowledge: SCA members undergo professional training and stay updated on the latest legislation governing strata communities
Code of Conduct: SCA members must adhere to a Code of Professional Conduct which outlines ethical standards, professional behaviour, and compliance requirements
Continuous Learning: SCA members are required to participate in a minimum of 6-12 hours per year of education and training to maintain their membership
Great Resources: SCA members have access to a large range of tools and resources prepared by the SCA These include guidelines on best practices and templates for different tasks
Updated Code of Ethics
The strata industry is changing, as are the expectations, thus the Strata Community Association (SCA) has issued a new national Code of Ethics, effective July 2025 This new Code, created in partnership with experts from Australia and New Zealand, establishes a common ethical standard for all SCA members
This Code is more than just theory It is practiceoriented It was formed by comments from senior executives, managers, front-line employees, service providers, and lot owners The end result is a solid, realworld framework that effectively tackles the issues and obligations that strata professionals confront every day
This isn't simply about establishing regulations The Code instills a culture of continual development, public trust, and professional integrity It supports ethical decision-making through a specialised framework and offers robust whistleblower protections
The SCA will enforce the Code through a transparent complaints process. Breaches may result in remedial actions, instruction, or, in severe situations, suspension or expulsion Sanctions are intended to guarantee integrity throughout the profession
Trust is vital in an industry that oversees millions of people's homes and investments The new Code instills trust in owners, committees, service providers, and managers that strata professionals will behave fairly, responsibly, and transparently
SCA (Vic) Symposium 2025
The SCA (Vic) Symposium is the leading annual twoday event for professionals across the Victorian strata sector Designed for both senior leaders and strata managers, the Symposium delivers a high-quality program of keynote presentations, interactive workshops and panel discussions that explore current trends, innovations and best practices within the industry
A dedicated exhibitor showcase runs alongside the program, providing delegates with valuable networking opportunities to connect directly with suppliers and service providers offering the latest products, technologies and solutions
The SCA (Vic) Symposium is exclusive to SCA (Vic) Members Tickets are on sale via the events page on our website or the link below!
https://www trybooking com/DDHWA
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