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FAQ FREQUENTLY ASKED QUESTIONS What is an Owners Corporation? An Owners Corporation (or Body Corporate as it was formerly called) is a body that collectively manages the subdivision of a building or land that is registered at Land Victoria. The Owners Corporation ACT 2006 sets out duties and powers of the Owners Corporation. An Owners Corporation may be created in any property subdivision ie: residential, retail, commercial, industrial or mixed use. An Owners Corporation must be created where a subdivision contains common property.

An Owners Corporation may also choose to appoint a manager to take care of the management of the Owners Corporation. A manager must have professional indemnity insurance of at least $2million and be registered with the Business Licensing Authority.

What does an Owners Corporation do? The main functions of the Owners Corporation are to: • repair and maintain the common property, fixtures and services;

What is meant by common property?

• maintain correct insurance, including public liability insurance, reinstatement and replacement insurance;

Common property is the area as stated on the plan of subdivision which is jointly owned by all Lot owners in the subdivision.

• provide general management and administration of land and buildings;

Common property includes for example, pathways, driveways, stairs, lifts and lift lobbies, common garden areas, passages and other facilities.

• raising and collecting of fees from lot owners to meet financial responsibilities of the Owners Corporation;

• insure compliance with the regulations and rules;

• maintain records, financial statements and register;

The common area is controlled and governed by the Owners Corporation, on behalf of the lot owners, and it is responsible for the common area including, management, administration, repair, maintenance and liabilities.

• all functions & duties according to the Owners Corporation Act 2006 and Owners Corporation Regulations 2007;

How does an Owners Corporation operate?

• ensure common property is compliant as per Essential Services and OH&S regulations;

The Owners Corporation members may manage their own affairs or appoint a member or a committee of members to do so.

• provide Owners Corporation Certificates (Section 151 certification).


What is the effect of the Owners Corporation Rules? All Owners Corporations have Model Rules. These rules are prescribed by the regulations and apply if there are no registered rules in place for the Owners Corporation. The rules are to assist in the control, management, administration, use or enjoyment of the common property. If an Owners Corporation has registered at Land Victoria and given a copy to all owners and occupiers, special or additional rules and a matter arises that is not noted in these rules, the model rules then apply. Model rules and registered special or additional rules can be enforced at a VCAT hearing should this be required due to a breach of the rules.

Some things an Owners Corporation can make rules for are:

Owners Corporation Managers must remain professional and act honestly, in good faith while exercising due care and diligence. Owners Corporation Managers must not make improper use of the manager’s position to gain, directly or indirectly, an advantage personally or for any other person.

Do we have to have a Committee/Chairperson? Depending on the size of the Owners Corporation it is recommended that a Committee of no less than three and no more than twelve members of the Owners Corporation be elected to the Committee and this generally done at an Annual General Meeting. In the case of a smaller Owners Corporation a Chairperson (a member of the Owners Corporation) be elected to assist in decision making for the Owners Corporation.

•• Health, Safety & Security •• Committees & Sub Committees •• Management & Administration •• Use of Common Property •• Use of and works to a Lot •• Design of Lots •• Behaviour of persons •• Dispute resolutions •• Notices & documents •• Common seal

What is the role of the Owners Corporation Manager?

What is my Lot Entitlement and Lot Liability? The plan of subdivision sets out the lot entitlement and lot liability of each Owners Corporation member and is usually expressed as a percentage or fraction. A number specified on the plan as the lot entitlement for any one lot, states the lot owner’s interest in the common property. As their share of the total entitlement. This may come into effect when the common property derives income or sold. It also determines voting rights at a meeting of the Owners Corporation. A number specified on the plan as the lot liability for any one lot, states the proportion of the administrative, general expense and sinking fund (if any) of the Owners Corporation which the lot owner is obliged to pay.

Owners Corporation Managers role is to co-ordinate the running of the Owners Corporation common area for all unit owners.

Who can make Decisions/Resolutions and how are they passed?

Duties include:

All financial owners can assist in making decisions/resolutions on behalf of the Owners Corporation.

•• Meetings – notices, agenda, minutes and budgets •• Collection of fees •• Property maintenance – quotations and repairs •• Placing of insurance

Decisions/resolutions are made at the Annual General Meeting, held at the end of the financial year for the Owners Corporation.

•• Correspondence

Committee are elected at the Annual General Meeting and they can make decisions/resolutions on behalf of the Owners Corporation during the year, depending on the nature of the decision/resolution and the cost of the works.

•• Payments to contractors

Most decisions/resolutions can be passed by Ordinary

•• Keeping financial records


Resolution as long as there is a quorum (50%) of owners at the Annual General Meeting in favour.

What is a Levy?

A Special Resolution (75% in favour and no more the 25% against) is required for works such as exterior painting or major works where the costs are twice the annual budget. A Special Resolution can be passed in several ways;

A levy is a contribution that all owners must pay (usually quarterly), calculated as per the lot liability which covers the administrative expenses of maintaining and managing the strata or community title scheme. A prescribed Owners Corporation also levies a Maintenance Levy.

•• By a vote at an Annual General Meeting, if the special resolution has been noted on the meeting agenda, or;

What is a Sinking Fund?

•• A special resolution postal ballot can be sent out to all owners giving them 28 days to respond; •• A Special General Meeting can be called to discuss and resolved urgent matters that require special resolution to be passed. A Unanimous Resolution (100% of owners in favour) is required for some decisions including selling common property or buying land, altering boundaries or altering lot entitlement and lot liability.

Duties of Owners and Committee and Chairperson Owners •• Keep control of decision making •• Delegate powers except those requiring a special or unanimous resolution •• Over turn decisions •• Appoint a Sub Committee

A sinking fund is a maintenance fund for unforeseen/ unexpected major works. It is recommended that the Owners Corporation have one in place.

What fees can the Owners Corporation charge? The Owners Corporation can decide the level of fees, how they are paid and times for payment. If a member does not pay the fees or levies, the member loses the right to vote on matters requiring an ordinary resolution. The member is still entitled to attend meetings of the Owners Corporation but may only vote on matters requiring a special resolution or unanimous resolution. The Owners Corporation may engage in legal representations to recover debts from members and may charge penalty interest on money owed by members. A decision to charge penalty interest must be approved at an Annual or Special General Meeting and fix the amount of interest to be charged. The rate of interest must not be greater than the rate stated in the Penalty Interest Rate Act 1983.

Committee •• Make decisions on behalf of the Owners Corporation, other than special or unanimous resolutions. Chairperson •• To allow fair and open discussion within the committee •• Can convene annual or special general meetings •• Arrange ballots •• Must be a financial member •• Act on direction of the Owners Corporation

How are arrears dealt with? •• A friendly reminder may be provided by text or email 2-5 days after the due date. •• Reminder notices are issued 14 days after the initial due date of the first fee notice. •• Final fee notices are issued 28 days after the reminder notices and incurred interest is charge. •• Debt collection proceedings begin 28 days after final fee notice due date.

•• Act honestly and in good faith •• Exercise due care and diligence


Who is responsible for repairs, maintenance and improvements of common property? The Owners Corporation has the legal responsibility to repair and maintain common property and common services. Each member is responsible to maintain their individual lots to a state of ‘good and serviceable repair’. If a notice to repair is served on your lot you must carry out the repairs within 28 days or the Owners Corporation is entitled to carry out the repairs and charge your account the cost of the works.

What is the position on Insurance? •• We comply with Financial Services Reform Act and can arrange Insurance for and on behalf of the Owners Corporation •• Ensure insurance valuations are undertaken when requested •• Ensure appropriate insurance claims are submitted processed in a timely manner

When can I use a proxy to have my say? A proxy is where you authorise someone else to vote on your behalf when you are unable, or choose not to, attend a meeting. Use the prescribed Proxy Form, which will accompany the notice of meeting. You will not be able to use a proxy if your name is not on the Owners Corporation (OC) register or if your levies are not paid in full.

Should you have any queries, please contact: Georgina Meredith Senior Owners Corporation Manager (03) 9908 3320 Disclaimer: Particulars herein are for information only and do not constitute any representation by 37° Owners Corporation.

•• Offer competitive insurance rates through our specialist Owners Corporation broker

Who can resolve disputes between members and the Owners Corporation? These are several options available: •• the majority of disputes revolve around a breakdown in communication. As such we always suggest meeting to hear everyone’s views; •• advise the committee or the Owners Corporation Manager; •• lodge a complaint in the prescribed form and seek the complaint to be dealt with in accordance with the dispute resolution process; or •• obtain legal advice from our office - you may need to apply to VCAT for an order determining the dispute under Section 165 of the Act.

Georgina Meredith - Senior Owners Corporation Manager Phone (03) 9908 3320 • Fax (03) 9570 1900 •

• 37OC Pty Ltd • 356-358 South Road, Moorabbin VIC 3189 • PO Box 2139, Moorabbin VIC 3189 Email • A.C.N. 162 809 805 • A.B.N. 98 405 091 601


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