Owners
1. What is an Owners Corporation (Body Corporate)?
Owners Corporation, formerly Body Corporate, is a body which collectively manages the building where a building is subdivided into lots. Owners Corporation is the legal entity created when the plan is registered at the Titles Office.
2. What is Common Property?
The common property of an Owners Corporation includes all areas not owned by individual lot owners but held collectively by the corporation. These may include foyers, hallways, lifts, stairwells, car parks, podium-level gardens, swimming pools, gyms, saunas, function rooms, theatres, and other entertainment areas. Depending on the Plan of Subdivision, common property may also include exterior walls, roofs, or air space where applicable.
3. What are the Owners Corporation Act 2006, the Regulations, and the Special Rules?
The management and conduct of the Owners Corporation is governed by the Owners Corporation Act 2006, the Subdivision Act of 1988, the Regulations 2018, the Model Rules and Rules as determined by an Owners Corporation. The rules are in place to manage the use and /or enjoyment of common property. Where an Owners Corporation does not have its own rules registered, the Model Rules set out in the Owners Corporation Regulations 2018 apply. It is a requirement that a landlord must provide every Tenant a copy of the rules. The Owners Corporation and owners individually can apply to VCAT to enforce the rules, where penalties can be imposed for breaches of the rules.
4. What are Tiers of an Owners Corporation (Body Corporate)?
From 1 December 2021, changes to the Owners Corporations Act 2006 introduced a five-tier system to replace prescribed owners corporations (those with fees over $200,000 or more than 100 lots). The system sets different obligations for committees, financial reporting, and maintenance plans, with stricter requirements for larger corporations. Tier 1 covers more than 100 occupiable lots, Tier 2 51–100 lots, Tier 3 10–50 lots, Tier 4 3–9 lots, and Tier 5 two-lot subdivisions or services only. A “services only” owners corporation has no common property but shares either utility company meters or an unmetered common service.
5. What is a Quorum for a General Meeting?
A quorum for a general meeting is at least 50% of the total number of lots or if 50% of the total number of lots is not available the quorum is at least 50% of the total lot entitlement. If a Quorum is present all decision (resolutions) passed at the General Meeting, take effect from the date of the Meeting. If a Quorum is not present the decisions (resolutions) passed at the General Meeting, are considered ‘Interim Resolutions” and don’t take effect until the 29th day after the General Meeting is held.
6. What is the difference between an Ordinary Resolution, a Special Resolution and a Unanimous Resolution?
An ordinary resolution is passed when a simple majority of votes cast at a meeting are in favour; if the meeting lacks a quorum, it is considered an interim ordinary resolution. A special resolution requires 75% support—either 75% of the total lot entitlements (if by ballot or poll) or 75% of the total votes (in other cases); if at least 50% vote in favour and not more than 25% vote against, it becomes an interim special resolution until confirmed. A unanimous resolution requires full support—100% of lot entitlements (if by ballot or poll) or 100% of votes (in other cases).
7. What does Owners Corporation Insurance cover?
Owners Corporation insurance covers the building, the common area and contents, legal liability, workers compensation, fidelity guarantee and office bearers insurance.
8. What insurance cover do i need to take out?
The Owners Corporation insurance (Body Corporate Insurance) does not include the contents, personal belongings or public liability of the individual apartment owners or occupants. Individual owners are advised to take out a personal contents policy, including personal legal liability cover.
9. How are Owners Corporation fees calculated?
The annual administrative fund and maintenance fund budgets required to meet the anticipated expenditure is divided by the lot liability for each apartment as shown on the registered plan of subdivision.
10. What does the Owners Corporation Manager do?
The Owners Corporation manager is responsible for the day-to-day operational management of the building, which includes guiding owners and committees in line with the Owners Corporation Act 2006 and Regulations, managing finances and preparing budgets, handling correspondence with members, contractors, and consultants, convening and conducting annual, special and committee meetings, issuing notices and minutes, raising levies based on approved budgets, preparing Owners Corporation Certificates for sales and managing disputes, including holding dispute resolution meetings.
11. What is a Maintenance Fund?
A maintenance fund or a sinking fund is the regular investment of funds to meet anticipated future capital expenditure of the property.
Committee
1. What is the Committee of Management?
Owners within the building elected by the members to represent all owners between annual general meetings and is elected at each Annual General meeting.
2. Why do we need a Committee for our Owners Corporation?
Tier 1, 2 and 3 owners corporations must elect a committee at the annual general meeting. Tier 4 and 5 owners corporations may choose to elect a committee.
3. Is there a minimum number of members required for a Committee?
Owners corporation committees must have at least three, but not more than seven members, unless the owners corporation resolves to increase the committee to a maximum of 12 members, through an ordinary resolution at an Annual General Meeting.
4. What are the functions and powers of a Committee?
The Committee of an Owners Corporation must act in accordance with the Owners Corporation Act and Regulations, enforce both the Special Rules of the Owners Corporation and the Model Rules under the Regulations and exercise all powers necessary to perform the corporation’s functions. Any resolution passed by the Committee within its powers is considered a resolution of the Owners Corporation; however, the Committee cannot make decisions on matters requiring a Unanimous Resolution, Special Resolution or a resolution passed at a General Meeting.
5. What are the duties of a Committee and Sub-Committee?
A member of a committee or sub-committee of an owners corporation must act honestly, in good faith, with due care and diligence, and in the interests of all members, while avoiding any improper use of their position for personal or others’ advantage. Their responsibilities also include monitoring the Maintenance Plan and reporting at the Annual General Meeting on works completed, works scheduled for the coming year and the funding required.
