To help build a better understanding of some of the issues and requirements surrounding the management of residential facilities, we’ve collected some of the more commonly asked questions and answers. Please note that these are for guidance only and should not be considered legal advice.
What is an Owners Corporation?
The Owners Corporation (formerly body corporate) is an owners group responsible for the management of the common property of their residential property development.
Common property will include lobbies, stairs, lifts, paths, driveways, pools, common garden…in fact any facilities set up for use by owners and residents. It is legally defined as any property not on title to any particular owner.
Created when subdivision plans are registered at Lands Victoria, the Owners Corporation is governed and regulated under the Owners Corporation Act 2006 and the Owners Corporations Regulations 2007. As a lot owner in the subdivision, you are automatically a member of the Owners Corporation
Do I have to be a member of the Owners Corporation for my property?
As a lot owner, you’re automatically a member of the Owners Corporation. With membership comes a legal and financial responsibility to the OC, so it’s important that members familiarise themselves with those requirements in order to understand their role in the OC.
What does an Owners Corporation do?
The OC manages and administers works on the common property areas and enforces any rules, regulations and by-laws.
It ensures the areas and facilities it is responsible for are comprehensively insured and maintained. These services are paid for from fees collected from the lot owners by the OC.
What do my levies pay for?
Costs and fees vary based on the demands of the membership and requirements under specific state and national legislation. Typical expenses include services and such as:
- Building and Public Liability Insurance
- General Maintenance and Repairs
- Electricity, Water Costs & Gas (common only)
- Lift Maintenance
- Fire Protection Services
- Essential Service Inspections
- Gardening & Cleaning
- Emergency expenditure such as leaks, blockages, electrical faults and insurance claim excesses
- General administration – eg. issuing of correspondence, invoices and minutes.
What is an Owners Corporation manager (OCM)?
An OCM is a professional manager that administers an OC, assisting with finances, insurance, administration, meetings and maintenance functions. An OC can appoint an OCM to carry out a range of specified functions in a contract.
What does the OCM actually do?
Specific OCM functions will vary dependent on the terms of appointment and the delegated authorities. That said, all professional OCMs are responsible for the following :
- Ensuring compliance with the Owners Corporations Act 2006
- Preparing & providing financial summary statements to all members prior to the Annual General Meeting, including the Owners Corporation budget
- Managing the Building Insurance requirements
- Organising repairs and maintenance to common property
- Managing Payment of all invoices
- Maintaining and managing all common service agreements and contracts
- Archiving all documentation
- Circulation of Minutes, Notices and Special Correspondence
- Levying of Contributions
- Commencing debt recovery procedures against non-financial owners
- Holding and chairing the OC Annual General Meeting
- Providing OC Certificates as required (handled by an admin staff member who specialises in the preparation of OC Certificates)
- Maintaining the OC Register.
Why use a professional OCM?
Typically, OCs associated with larger facilities engage professional OC Managers to assist and guide executive committees in the development and implementation of the often complex compliance and legislative requirements and dispute handling.
Professional OCMs are open to review, held accountable to their OC committee and transparent in all aspects of their performance. While not unilateral decision makers, OCMs can provide, through their professional network, the experience and buying power, the specialist people and processes to significantly improve the executive committee’s performance.