An owner’s corporation is responsible for conducting managerial activities of the strata scheme. Since the management of an owner’s corporation is guided by laws and regulations, it is necessary to be aware of them. Moreover, the legislations are subject to change over time to be inclusive of all provisions that ensure smooth management. Therefore, it is essential to be in the loop of any amendments made to the regulations.
On 10th October 2018, a council of governors approved the owner’s corporation regulation effective 2nd December 2018, replacing the existing owner’s corporation regulation 2007. Below are some of the amendments made in the new owner’s corporation regulation.
- 1 Maintenance plans (Regulation 7)
- 2 Committee membership (Regulation 9)
- 3 Professional indemnity insurance (Regulation 10)
- 4 Model owner’s corporation rules (Regulations 11)
- 5 FAQs
- 6 Conclusion
Maintenance plans (Regulation 7)
The owner’s corporation regulation 2018 has included the provisions for significant capital items in the legislation. Therefore, the owner’s corporation manager must review their current maintenance plans and make significant capital items part of them. The major capital items comprise common property structures such as roof, common property services such as telephony infrastructure, and common property assets such as swimming pools and water tanks. Therefore, in the course of maintenance, such major capital items should also be budgeted for.
Committee membership (Regulation 9)
The committee membership amendment is intended to make a non-compliant member of the owner corporation committee face disciplinary action. The new regulation prescribes that if a committee member fails to attend 25% of the committee meetings held in six months without a reasonable explanation of the absence, they are expected to cease holding the office. Immediately after this, there is a declaration of a casual vacancy on the committee. In accordance with the regulation, due process is followed to fill the position.
Professional indemnity insurance (Regulation 10)
Like other business entities, an owner’s corporation is expected to give its clients the best service provisions. Failure to do this and legal action might be filed against the owner’s corporation. The owner’s corporation can combat this by signing up for professional indemnity insurance. Therefore, the insurance acts as a caution for the owner’s corporation from legal action arising from negligence, error, or omission in rendering their services. In the new owner’s corporation legislation 2018, the charges for acquiring the insurance have been raised from $1,500,000 to $2,000,000.
Model owner’s corporation rules (Regulations 11)
The owner’s corporation regulation 2018 has inscribed a new model rule 2 regarding the committee. Therefore, increasing the number of model rules to 7. Starting with model rule 2.1, the owner’s corporation committee can appoint members to a sub-committee without reference to the owner’s corporation.
The second model rule, 5.2, requires a lot owner to get written approval from the owner’s corporation before making any external changes to the unit’s appearance. Examples of exterior changes may include re-painting or renovation. Under the rule, the owner’s corporation cannot deny the lot owner if they have a valid reason. The validity of the reason will depend on whether the property’s value of other lot owners or common property will be affected. The structural integrity and peaceful environment of other unit owners are also considered when granting permission.
The other change is model rule 5.3. It requires the unit owner to notify the owner’s corporation beforehand of any intentions to make renovations or other structural work that may affect the quietness of other lot owners or activities going on in the common property.
For the first time in over a decade, government regulation of owners in Victoria has been regulated. Owners Corporation Regulation 2007 has been replaced by Owners Corporation Regulation 2018, providing OC Committees and Strata groups with a new set of rules and regulations to follows.
Q1: What Law Regulates An Owners Corporations Regulation For Victoria?
A: According to the Owners Corporation Act 2006, the law can regulate the following:
- The function and power of an owner’s corporation.
- Requirement of the Owners Corporation.
- Right of Owners and Occupiers.
- Chairperson and Secretary of the Owners Corporations.
Q2: Do The Consent Of All Members are Necessary To Appoint A Manager?
A: Well, all member needs to take part in the meeting to appoint a manager, it only requires an ordinary resolution to appoint one. If 50% of the committee member want to appoint a manager, the agreement will be passed.
Q3: What Happen If The Owners Corporation Run Out Of Funds?
A: If the budget planning has been done correctly, and provision for unexpected expenses has been made accurately, the Owners Corporation would have a sufficient budget to function. However, if more funds are required, the committee needs to appoint a manager to overview the operation and raise the special levy in extreme circumstances.
The amendments to the owner’s corporation regulation aim to improve the management and run of strata schemes. It is, therefore, necessary to seek legal advice during the implementation of these new provisions.