Frequently Asked Questions

A. Levies are raised to meet the financial obligations of the body corporate for today and in the future. Levy rates vary from one body corporate to another. This is due to the different size, location, amenities etc of the Scheme.

There are two types of levies: -

1. Administrative Fund Levy: Funds normal day-to-day operational expenses such as:

Audit fees, bank charges, caretaking or management fees, community power, taxation, body corporate insurance, administration costs for the body corporate, lifts and other equipment servicing, pools and common area maintenance / materials, and the like. Usually, these expenses occur once or frequently every year.

2. Maintenance Fund Levy: Where an owners corporation has an approved maintenance plan which funds large common property maintenance, repairs, improvements as well as purchase of new assets.

Large items are listed below: -

Lifts, cooling towers, heating equipment, repainting common property, repairs to roof and guttering, refurbishing pool and gardens, purchase of additional or replacement pool furniture etc. In other words, large, irregular expenses.

A levy is paid by all lot owners according to their individual lot liability. The schedule of lot liability is set out in the plan of subdivision.

Various payment options are offered including:

  • Payment via pre-registered bank account or credit card (Visa/Mastercard)
  • B-Pay
  • On the phone from your nominated account
  • DEFT payment system – available through Macquarie Bank
  • Payment at any Australia Post Office.

A. It is a requirement in Victoria that contracts for the sale of land be in writing and that particular forms of contract are used. The governing legislation is the Sale of Land Act 1962.

An important aspect of any contract of sale of land is the Vendors Statements also known as a Section 32, so-called because requirements are set out in section 32 of the Act. Real estate agents often mistakenly refer to the vendors statement as a roadworthy for the property. This is not correct as a roadworthy certificate for a car sets out that the vehicle has complied with certain requirements whereas a Vendors Statement only discloses information regarding the property and is not a certificate of compliance.

By disclosing information about a property, a prospective purchaser is able to make an informed decision as to their intention to purchase and an appropriate price.

The Vendors Statement requires details of mortgages, planning restrictions, rates and charges, services such as water and electricity relevant to the property amongst other things. It is a requirement that the vendor provide to the purchaser a copy of the statement prior to signing the contract and also that the statement is included in the contract of sale.

Owners Corporation

Where the land being sold is affected by an owners corporation, it is a requirement that details regarding levies payable, any known future levies or contingent liabilities including any those arising from legal proceedings, and any proposed expenditure that may result in increased levies are disclosed.

An owners corporation provides this information in an owners corporation certificate. In addition to the above matters, the owners corporation certificate will also set out details of insurance taken out by the owners corporation, any leases or licences granted by the owners corporation to common property, whether the owners corporation has adopted additional rules, details of any litigation, contingent liabilities and if a manager has been appointed.

Stratum and Company Share

Owners corporation certificate is not applicable to stratum or company share properties as a owners corporation certificate applies only to owners corporations. For both of these types of properties details similar to that provided on owners corporation certificate are set out in the vendors statement for the property.

For a stratum unit the obligations and responsibilities of the service company and a member are set out in a document known as a service agreement. This agreement may be registered on the title of the property and a copy may be obtained from the Land Registry. If the agreement has not been registered on the title of the property, the current owner should have received a copy upon purchase of the unit and would provide this to the purchaser upon sale.

For a company share flat, the rights and obligations of a member are usually set out in the company's constitution. In addition, some company share properties have a separate service agreement which the purchaser is required to enter into upon settlement of the property.

If you are selling your property, your solicitor or conveyancer is able to provide you with detailed information regarding the Vendors Statement and also the requirements to be included where there is an owners corporation. It is important that the information is accurate as the vendor of the property is liable for any mistake, even if is not intentional.

A. An owners corporation manager is a person or corporation who is appointed pursuant to the relevant body corporate legislation with the power to perform certain duties and functions of the body corporate and the committee as are delegated to it in an agreement.

The primary responsibilities delegated to An owners corporation manager are the duties of the secretary and treasurer.

These include:-

  • Prepare and forward notices as required by the Act
  • Prepare notices of general meetings
  • Attend and prepare minutes for general meetings
  • Attend to matters resulting from general and committee meetings
  • Attend to all correspondence
  • Keep the books, records and roll
  • Levy owners and collect their contributions
  • Prepare statements of account and annual budgets
  • Pay accounts
  • Effect all insurances and submit claims
  • Recommend actions for committee and owners corporation to ensure compliance with the Act.

The body corporate, however has the right to delegate only a proportion of these duties or to extend them - within the confines of requirements of the Act.

Even though an owners corporation manager has been appointed, this does not preclude the owners corporation or its committee from exercising any of the powers which have been delegated to the manager - in fact the powers of the owners corporation and manager run concurrently. A prudent owners corporation manager does not usurp or override the decisions of a committee.

An owners corporation manager is usually appointed at a general meeting but may be appointed by the committee. Delegations are required to be made at a general meeting of the owners corporation.

An owners corporation manager assists the committee in making decisions.

A. The current legislation for owners corporations is the Owners Corporation Act 2006 which has been in force since 31 December 2007.

Copies are available from:

INFO Victoria
356 Collins Street
Melbourne Vic 3000

Tel 1300 366 356
Fax 9603 9920

Copies are also available on the internet at:
www.austlii.edu.au
www.dms.dpc.vic.gov.au

Further information may be obtained from Consumer Affairs at:
www.consumer.vic.gov.au

A. The most common understanding of an owners corporation is associated with residential units. However, owners corporations may be associated with almost any type of real estate including villa units, shopping centres, factories, warehouses and farms.

An owners corporation comes into existence when an existing parcel of land is divided into two or more parcels and common property created by the subdivision. Common property may be a driveway, roof, stairwells and gardens. Some owners corporations may have lifts and recreational facilities such as swimming pools, tennis courts or gymnasiums. The owners corporation may also be responsible for services such as common water supply and drains. An owners corporation is not required to maintain services which are for the exclusive benefit of one unit.

It is necessary to refer to the plan of subdivision to determine the common property and hence, the particular responsibilities of the owners corporation. Common property is jointly owned by all of the members of the owners corporation and the plan of subdivision sets out the proportion of ownership in the owners corporation schedule. This schedule will also determine the proportion of owners corporation expenses to be borne by each member.

An owners corporation is a separate legal entity from its members. Although analogous to a company it requires no separate steps for creation and does not require the lodgement of Annual Returns with the Australian Securities and Investments Commission.

The role of the owners corporation is to maintain the common property for the benefit of members and to provide services to the members. In doing so the owners corporation must comply with legal obligations such as conducting an Annual General Meeting of members.

Repairing and Maintaining Common Property

As the common property is for the benefit of all members, the owners corporation undertakes the repair and maintenance of the common property to ensure that it is maintained to the standard members' desire.

A member may participate in decisions regarding repairs and other works by attending the Annual General Meeting and offering to serve on the committee.

An owners corporation is also required to comply with any notice served by a statutory authority in regard to the common property. An example would be an order by the water authority to repair a leaking supply main.

Managing and Administering the Common Property

The owners corporation manages the common property by determining the works to be carried out and the timing of the work. Most decisions require a majority of members to be in favour of proposed works to be undertaken.

An owners corporation is required to keep books of account and other records such as minutes of meetings. It is preferable that the owners corporation has a separate bank account into which members funds are deposited and from which the expenses of the owners corporation are paid.

Insurance

An owners corporation is required to take out insurance for public liability and reinstatement of the common property. Additionally, most owners corporations are required to insure all of the buildings in the development. It is recommended that a valuation be obtained from a qualified valuer on a periodic basis to ensure that the full value of the buildings is insured thereby reducing the risk of members in the event of a substantial loss.

It is important to note that the owners corporation insurance does not cover the contents of owners' units and members should ensure that they have appropriate contents cover in place, whether a resident or landlord of a tenanted property. Members should ensure that the policy in place for their unit includes public liability cover.

Rules

Model rules are set out in the regulations and apply to those owners corporations which have not adopted their own rules.

An owners corporation may also adopt additional rules to deal with particular matters such as the hours of operation of a swimming pool. The adoption of additional rules requires that a special resolution of members be passed by the owners corporation. A special resolution requires at least 75% of the members of the owners corporation be in favour. Once passed the rules are lodged with the Land Registry and recorded on the plan of subdivision, taking effect from the date of registration and are legally enforceable against owners, tenants and their guests.

Enforcing the Regulations and Rules of the Owners Corporation

Whilst most breaches of rules may be resolved by discussion between parties, it may be necessary to invoke a disputes resolution mechanism. If a resolution cannot be achieved through the less formal methods, then there is provision for recourse to the Victorian Civil & Administrative Tribunal for a decision regarding a dispute.

The owners corporation may also carry out any other requirement imposed by law. For instance, if the owners corporation has a lift it may be required to carry out prescribed maintenance in accordance with government regulations.

Stratum and Company Share Properties

The Owners Corporation Act 2006 does not apply to Stratum and Company Share properties. The responsibility of these companies regarding maintenance, rules and other powers will usually be set out in the company's constitution and service agreement and it is necessary to consult these documents to be certain of the obligation for particular matters.

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