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FAQ's

Find answers to commonly asked questions
about owners corporations and strata
management services.

  • General
  • Financial
  • Meetings
  • Rules
  • Disputes
  • Insurance
I live in a property affected by an owners corporation, who maintains what?
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An owners corporation must repair and maintain common property and any chattels, fixtures, fittings and services related to the common property or its enjoyment. An owners corporation must also repair and maintain a service in or relating to a lot that is for the benefit of more than one lot and the common property.

Anything that relates solely to a lot on the plan of subdivision is the responsibility of the lot owner.

What is a maintenance plan?
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A maintenance plan sets out the plan for replacing and repairing major capital items (eg a Lift or HVAC) within the next 10 years.

A maintenance plan must detail the present condition and state of the items listed in the plan, when those items will need to be repaired or replaced, the estimated cost of those items and the expected life of those items.

A maintenance plan is a must for prescribed owners corporations and recommended for all owners corporations, and is only in effect once it has been approved by the owners corporation.

What is a prescribed owners corporation?
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A prescribed owners corporation is currently any owners corporation in excess of 100 lots or one that levies in excess of $200,000 in annual fees.

What is an owners corporation?
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An owners corporation is the body comprised of those owners who are tenants in common of common property created under the Subdivision Act.

What is common property?
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Common property is any property referred to as common property on the plan of subdivision. Common property can be quite a number of areas of a building or development, but as an example it is areas like the hallways, lobbies, main structures, entrances, lifts, pools, gyms and outdoor areas. Generally it is areas of a building or development that are accessible and available to all owners and occupants.

What is lot entitlement and how is it calculated?
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Lot entitlement is expressed in the schedule of the plan of subdivision and reflects the proportion of interest and voting entitlement a lot holds in the common property of the owners corporation.

This is initially set up by the surveyor completing the plan of subdivision and is usually based on the value of a particular lot comparative to the value of other lots in the owners corporation.

What is lot liability and how is it calculated?
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Lot liability is expressed in the schedule of the plan of subdivision and reflects the proportion of liability a lot is obliged to pay for expenses of the owners corporation.

This is initially set up by the surveyor completing the plan of subdivision and is usually based on the size of a particular lot comparative to the size of other lots in the owners corporation.

What is the role of the chairperson?
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The Chairperson is elected by the committee of the owners corporation and is in charge of setting the direction of the owners corporation, ensuring that issues are given proper discussion and consideration so that informed decisions can be made. The Chairperson of the owners corporation also has the casting vote in matters where votes are equal.

What is the role of the owners corporation manager?
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An owners corporation engages an owners corporation Manager to help them run the day to day operations of the owners corporation. The manager ensures the owners corporation is compliant with the owners corporations Act and handles many of the administrative and financial tasks and obligations of the owners corporation including the keeping all records. A list of some standard duties of the manager is below.

Financial

  • Keep books and prepared financial statements of accounts covering all income and expenditure and assets and liabilities of the owners corporations
  • Processes and pay all invoices on behalf of the owners corporations
  • Issue Fee Notices and final fee notices to all members of the owners corporations
  • Receipt all payments to the owners corporations
  • Operated and reconciled the bank account for the owners corporations
  • Preparation and lodgement of BAS returns
  • Preparation and lodgement of tax returns
  • Follow up with owners who are in arrears

Insurance

  • Arrange placement of insurance policies
  • Arrange valuations where appropriate
  • Prepared, lodged and monitored insurance claims

General

  • Convene and attend meetings including providing all reports of a statutory requirement
  • Monitor and action all inwards and outwards correspondence
  • Maintain the owners corporations roll of names and addresses
  • Maintain the Register of the owners corporations
  • Issue all owners corporation certificates as well as liaise with solicitors with regard to settlement adjustments
  • Keep and supervise the use of the common seal
  • Keep all records of the owners corporations
  • Liaise with Building Management team in regards to maintenance and contracts
  • Provide guidance to the owners corporations to enable them to carry out and perform its duties and functions
  • Generally implement decisions of the owners corporations with respect to its duties and functions
What is the role of the owners corporation?
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The role of the owners corporation is to manage and administer the common property and repair and maintain common property and the chattels, fixtures, fittings and services related to common property or its enjoyment.

The owners corporation must also take out, maintain, and pay premiums on all required insurances for the owners corporation.

What is the role of the secretary?
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The Secretary is elected by the committee of the owners corporation and is responsible for keeping correspondence and organising committee meetings, including sending notices and taking minutes of the meetings and receiving proxies, ballots and petitions from members of the owners corporation.

Traditionally this role is given to the manager of the owners corporation as the role is quite onerous in medium to large owners corporations.

Who runs the owners corporation?
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In its most simple form an owners corporation is a very democratic organisation in that decisions of the owners corporation are made on at least a majority rules basis of the owners or the committee.

Each year at the Annual General Meeting (AGM) the owners corporation (affecting 13 or more lots) must elect amongst themselves a committee of between 3-12 lot owners or their representatives to handle the running of the owners corporation, including overseeing all financial and maintenance affairs of the owners corporation.

Why am I a member of multiple owners corporations?
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Larger owners corporations (and some smaller ones) are generally set up with multiple owners corporations so that costs associated with maintenance and repairs can be allocated to only those owners who are receiving a benefit.

As an example, multiple owners corporations might be set up where only some owners in a building own and have have access to a car park. In this scenario two owners corporations would be set up, one for the car park and one for the rest of the areas of the building. This way cleaning and electricity costs for the car park would only be paid by those owners who own a car park.

How are my owners corporation fees calculated?
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An owners corporation is only allowed to levy owners on a proportional basis according to their lot liability.

An owners corporation can however apply an amount payable to an owner should the owners corporation undertake repairs, maintenance, or other works on common property or a lot which are wholly or substantially for the benefit of one or a few lots affected by the owners corporation.

How often do I receive my fee notices?
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An owners corporation decides how often to issue fee notices at the AGM. There are no standard periods for receiving fee notices, however most owners corporations send their fee notices out quarterly to ensure they have sufficient cash flow to meet their obligations.

What happens if I don’t pay my owners corporation fees on time?
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If passed by an ordinary resolution at a general meeting, an owners corporation can charge interest to any fees outstanding after the due date. Should the owners corporation issue a final fee notice and those fees are not paid within 28 days, the owners corporation may seek recovery of those monies through legal proceedings.

What is the administration fund?
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The administration fund (also known as the general fund or operating fund) is used by an owners corporation to handle monies received and expended in relation to routine repairs, maintenance and administrative costs.

Every year at the AGM the owners corporation must present to the owners a budget, which is an estimate of what costs the owners corporation is likely to incur for the year. This estimate should be based on things like contracts in place, quotes, repair history, and prior year performance. Depending on the financial health of the owners corporation, this budget should also set the basis for owners corporation fees issued to owners.

What is the maintenance fund?
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The maintenance fund (previously referred to as the sinking fund or capital works program) is used by an owners corporation to handle funds for monies received and expended in relation to the approved maintenance plan.

Every year at the AGM the owners corporation should present to the owners a budget in accordance with the directions of the approved maintenance plan. This fund can also be used to pay for items that are of an urgent nature.

Why do I receive more than one Fee Notice?
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Some owners own more than 1 lot (e.g. an apartment and car park may be separately titled). In this scenario as they are separately titled, separate Fee Notices are required to be issued.

Can I appoint someone to act on my behalf?
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Yes you can.

A lot owner may appoint a proxy to attend, speak, vote or represent the lot owner on the committee of the owners corporation.

A person acting under a power of attorney, where authorised by that power of attorney may also attend, speak, vote or represent the lot owner on the committee of the owners corporation.

Does one lot equal one vote?
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At a general meeting each lot is given one vote (A singled person may hold multiple votes if they own more than 1 lot or have been given proxies by other lot owners) unless a lot owner present in person or by proxy calls for a poll. A poll must be by a written vote, and is based on one vote for each unit of lot entitlement. The chairperson of the owners corporation has a casting vote in the event of a tie.

At a committee meeting each committee member is entitled to one vote. The chairperson of the owners corporation has a casting vote in the event of a tie. (No polls may be called for a committee meeting)

How does an owners corporation make decisions?
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An owners corporation makes decisions by either making a resolution of the owners corporation, or resolving to delegate responsibility to the committee, manager, lot owner, chairperson, secretary or employee of the owners corporation.

What are ballots?
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Ballots of the owners corporation may be conducted by post, telephone, facsimile, the Internet, or other electronic communication and are used by an owners corporation to make decisions in circumstances where a meeting of the owners corporation or the committee is not possible, as well as some situations where it’s simpler than calling a meeting (most usually to discuss just one item).

Ballots of the owners corporation must be run in accordance with Part 4 Division 5 of the Owners Corporations Act, whereas ballots of the committee must be run in accordance with Part 5 of the Owners Corporations Act.

What are the committee meetings for?
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Committee meetings are for the elected committee to meet, discuss and make decisions for the owners corporation throughout the year.

Unless otherwise delegated under the rules of the owners corporation or at a general meeting of the owners corporation, the committee has all the powers and functions of the owners corporation except the power or function that requires a unanimous or special resolution.

What if I don’t agree with an owners corporation decision?
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Unless you can prove that the decision of the owners corporation was not properly constituted or is discriminatory then all decisions of the owners corporation are valid.

What is a resolution of the owners corporation?
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A resolution of the owners corporation is any matter that has been voted on via a general meeting, ballot or committee meeting of the owners corporation at which a quorum is present where more than 50% of votes cast are in favour of the matter.

An interim resolution may be passed at a general meeting or committee meeting where a quorum is not present if more than 50% of votes cast are in favour of the matter.

For a general meeting notice must be given within 14 days of the meeting to all lot owners with a note saying that all motions passed become resolutions of the owners corporation 29 days after the meeting unless a special general meeting is called within 29 days of the initial meeting.

For a committee meeting an interim resolution does not take effect unless it is confirmed at the next meeting where a quorum is present, by a ballot of the committee or unless the rules of the owners corporation stipulate an alternative procedure.

What is a special resolution of the owners corporation?
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Is obtained when wording for a special resolution has been put to all owners through a general meeting or ballot of the owners corporation that requires more than 75% of all owners to vote in favour of.

An interim special resolution may be passed if more than 50% of lot owners are in favour and not more than 25% of lot owners are against the motion. Notice must be given within 14 days of the meeting or close of ballot to all lot owners of the interim special resolution, with owners given 29 days from the date the resolution passed to petition the owners corporation against passing the resolution.

The Owners Corporations Act and Subdivision Act stipulate which matters must be decided by a special resolution (e.g. to make, amend or revoke the rules of the owners corporation requires a special resolution).

What is a unanimous resolution of the owners corporation?
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Is obtained when wording for a unanimous resolution has been put to all owners through a general meeting or ballot of the owners corporation that requires all owners to vote in favour of.

The Owners Corporations Act and Subdivision Act stipulate which matters must be decided by a unanimous resolution (e.g. to the Subdivision Act requires a unanimous resolution for any alterations to boundaries on a plan of subdivision).

What is the annual general meeting (AGM) for?
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An owners corporation must invite all of its members to attend an AGM if it pays out or receives any monies in the owners corporations financial year.
At the AGM, the owners corporation must consider and report to the meeting on the following:

  • The preceding years financial statements
  • The proposed annual budget
  • The minutes of the previous AGM
  • The details of any waived interest payments
  • The implementation of the maintenance plan
  • Any valuation that was obtained in the prior year
  • A report from the committee of the owners corporation
  • A report from the owners corporation manager
  • A report in relation to any disputes relating to the owners corporation
  • Details of any fees fixed by the owners corporation for the year
  • Details of all insurances held by the owners corporation
  • Details of any delegations made
When is a quorum achieved?
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A quorum for a General Meeting is at least 50% of the total votes or 50% of the total lot entitlement of the owners corporation.

A quorum for a committee meeting is at least half the members of the committee.

Who are the committee and how do I get on the committee?
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At every AGM, the owners corporation (affecting 13 or more lots) must elect a committee of between 3-12 lot owners or proxies representing lots to be members of the committee.

To become a member of the committee you must either nominate yourself (or be nominated) at a general meeting of the owners corporation, or be invited to fill a casual vacancy of the committee by the remaining members of the committee.

What are the rules of the owners corporation?
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The rules of the owners corporation are a set of rules that are used to control the management, administration, use or enjoyment of common property or of a lot.

What if I don’t agree with the rules of the owners corporation?
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Unless you can prove that the rules of the owners corporation were not properly constituted, inconsistent with law or discriminate a lot owner or occupier, then the rules must be abided by.

Who do the rules of the owners corporation apply to?
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The rules of the owners corporation apply to the owners corporation, lot owners, any lessee or sub-lessee of a lot and any occupier of a lot.

Who makes the rules of the owners corporation?
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By special resolution an owners corporation may make, amend or revoke rules of the owners corporation.

In the Owners Corporations Regulations there are also model rules that apply should an owners corporation not make any rules. These model rules also apply for any matters that the rules of an owners corporation do not provide for.

The rules of the owners corporation must be lodged with the Land Titles Registrar to have any effect and can only be made for the purpose of the control, management, administration, use or enjoyment of common property or of a lot, and cannot be made to be discriminatory or inconsistent with law.

What happens once I make a complaint?
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Once you make a complaint, the owners corporation must decide whether or not to take any action.

If an owners corporation decides to take no action, it must respond to the persons making the complaint and give reasons for taking no action.

If an owners corporation decides to take action, then they must first follow the dispute resolution process. If this process yields no results then the owners corporation may then issue a breach allowing 28 days to rectify the breach.

Should the persons not rectify the breach within the 28 days then the owners corporation may issue a final notice. Should the persons again not rectify the alleged breach then the owners corporation may apply to VCAT.

What if I don’t agree with the decision
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If you are not happy with the decision of the owners corporation then you may apply to VCAT to rectify the issue.

What if I want to make a complaint?
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Every owners corporation has a dispute resolution process that it must follow. The process is either detailed in the rules of the owners corporation, or if the topic is not covered by the owners corporations rules the process to be followed is contained in the Model Rules in the Owners Corporations Regulations.

Who can I make a complaint against?
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A lot owner, an occupier of a lot, or a manager may make a complaint about an alleged breach of the rules by a lot owner, an occupier of a lot or a manager.

What does the owners corporation insure?
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An owners corporation must take out an insurance policy for all buildings on common property.

The insurance must cover all costs necessary to replace, repair or rebuild the property back to a condition that is substantially the same, but not better or more extensive than its condition when new. It must also cover for all expenses reasonably incurred for the removal of debris and the engagement of persons necessary to the replacement, repairing or rebuilding of the property (e.g. architects and engineers). This also includes any shared services (water, gas, electricity etc.) that are shared with another person.

An owners corporation must also take out public liability insurance to cover any bodily injury, death or illness, or any damage or loss to property which is sustained as a result of an occurrence happening in connection with common property.

The owners corporation is also able to take out further policies in relation to any land affected by the owners corporation or relating to an owners corporations performance of its duties and functions (e.g. fidelity and office bearers insurance).

What if I need to make a claim?
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Any lot owner is entitled to make a claim on the owners corporations insurance policy. Typically a lot owner would need to contact the manager or secretary of the owners corporation to give details of any claim that needs to be lodged.

Who pays the excess?
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If the insurance claim is in relation to a lot owners lot, then that lot owner would need to pay the insurance excess.

If the insurance claim is in relation to more than 1 lot or the common property, then typically the owners corporation would need to pay the insurance excess.