Key Takeaways:
- Victoria spent years trying to fix unfair owners corporation contracts. The fix finally arrived in the Owners Corporations and Other Acts Amendment Act 2021, which commenced on 1 December 2021.
- Manager contracts of appointment are now capped at three years, and the clauses that used to trap owners corporations, such as manager-controlled rollovers, are now void by law.
- The protections are not retroactive, and some long-standing developer-era agreements can still survive, which is why owners who feel stuck should seek advice on where they actually stand.
For years, the story of owners corporation law in Victoria was a story of waiting. Owners and Committees watched sensible reforms get tabled, reviewed, adjourned and shelved, while they remained locked into long contracts they never chose and could not easily escape. That waiting is largely over. The law changed, and it changed in owners’ favour. The harder question now is whether the changes went far enough, and what you can do if you are still carrying a contract from the old era.
How did Victoria get here?
The push for fairer rules is more than a decade old. In October 2014, the Consumer Affairs Legislation Further Amendment Bill 2014 was tabled with a clear set of aims:
- Require those in effective control of a strata management business to disclose relevant criminal history
- Stop managers pooling funds from different corporations
- Force disclosure of conflicts, such as owning a service contractor or receiving commissions
- Limit strata management contracts to three-year terms rather than five or ten
They were sensible, overdue changes. Then the 2014 state election brought a change of government, and the Bill lapsed.
In August 2015, Consumer Affairs Victoria announced a review of the entire Owners Corporations Act 2006. After years of reviews, submissions and delay, a new Bill was introduced into the Lower House in September 2019, only to be adjourned for further debate. At the time, it was easy to assume the reforms would stall again.
They did not. The Owners Corporations and Other Acts Amendment Act 2021 passed both Houses of Parliament, received Royal Assent on 23 February 2021, and came into force on 1 December 2021. The aims of the long-lapsed 2014 Bill, including the three-year contract limit, finally became law.
What actually changed on 1 December 2021?
The most significant changes for owners and Committees concern the contracts that had caused the most grief. In short:
- Manager contracts are capped at three years. Under section 119(1D) of the Owners Corporations Act 2006, a person cannot be appointed as the manager of an owners corporation for a term that exceeds three years. No more signing away five or ten years at the outset.
- The trap clauses are now void. Section 119A bans a contract of appointment from including the terms that used to keep owners corporations stuck:
- a term letting the manager renew the contract at the manager’s own option
- automatic renewal if the owners corporation misses a notice deadline
- a requirement to pass a special or unanimous resolution, or hold a general meeting, before removing the manager
- an unusually long notice period to remove a smaller owners corporation’s manager
- Owners corporations can remove a manager. Section 119(6) plainly confirms that an owners corporation may revoke a manager’s appointment.
- Developers face real limits as the initial owner. Under section 68, a developer or their associate cannot be the manager or vote on building defect resolutions. Section 68(4B) adds that they must not propose an unreasonable or unsustainable budget, label common property or services as a private lot, or take any payment from the manager in relation to the manager’s appointment.
- Developer-era deals are time-limited too. Any other contract entered into by the developer that benefits the developer must not run longer than three years, other than hotel and resort management contracts that comply with the regulations.
If you read the aims of the 2014 Bill above, much of this is them, finally written into law.
Does the three-year limit apply to my existing contract?
This is where many owners are caught out, so it matters. The reforms are not retrospective.
A contract that was entered into before 1 December 2021 and ran for longer than three years can still run its full course. The cap on new appointments does not automatically tear up an older agreement. So an owners corporation that signed a five-year contract in 2019, with the usual rollover, may find that the term still binds it even though the same rollover clause would be void if the contract were signed today.
The void-term protections in section 119A do reach into both new and pre-existing contracts of appointment, and the transitional provisions of the Act (section 208) deal with voiding offending terms in older agreements. The practical upshot is nuanced rather than absolute: you may have more room to move than you think, but you cannot assume an old contract simply evaporated on 1 December 2021.
Not sure whether your own contract still carries one of these clauses? Send it our way and we can read it against the current Act, so you know where you stand well before the next renewal date passes.
What about long building management agreements?
Not every long agreement is caught by the three-year limit, and this is the gap the reforms left open.
The limit bites hardest on the developer and on the manager’s contract of appointment. Contracts entered into by a third party rather than the developer, or contracts that do not benefit the developer, are arguably outside the three-year cap. That is why some building management agreements, including the genuinely long ones, can survive where a manager’s contract of appointment could not. Owners corporations facing one of these agreements are not without options, but the path runs through the specific drafting of the contract and the circumstances in which it was entered, rather than through a single clean rule.
It is also worth knowing that the Act tackles a related developer tactic directly. Under section 89H, a term in a contract of sale of a lot that limits or controls the purchaser’s voting rights in the owners corporation is void. Voting control was one of the quieter ways owners were kept in line, and it no longer holds. It is one of several owners corporation traps worth understanding when buying off the plan.
So is the job done?
Not quite, and the government knows it. The Act even contains its own review provision (section 210), and a fresh review is now well underway.
In June 2025, the Victorian Government appointed a five-member Expert Panel, led by former Minister Marsha Thomson, to conduct a deep review of owners corporation laws, with public consultation open until 30 September 2025. The concerns driving this round are familiar: undisclosed commissions, proxy vote manipulation, and a lack of everyday protection for owners. The widely held view among practitioners is that the 2021 amendments tightened important parts of the framework but did not resolve the underlying structural issues, and the panel’s report now sits with government.
For owners and Committees, the takeaway is not that the law is unsettled, but that it is still moving in their direction. The protections you have today are real and enforceable. More may be coming.
What can owners and Committees do right now?
If your owners corporation feels locked into a manager or an arrangement it never truly chose, the situation is very likely better than it was a few years ago, even if it does not feel that way yet.
The starting point is to have your current contract of appointment read against the Act as it now stands. A clause that demands a special resolution before you can change managers, a rollover that renews at the manager’s option, or an unusually long notice period may simply be void, which can change your position immediately. If your contract predates December 2021, the analysis is more involved, but it is exactly the kind of question worth answering before another term quietly rolls over.
Find out where your owners corporation stands
A short review of your contract of appointment against the current Act will show you what has changed in your favour, and what you can do next.
Strata Management Consultants works with Committees on changing owners corporation management companies, from reading where a contract leaves you to running a fair transition. For more complex matters, such as a long building management agreement or a dispute headed to VCAT, we can connect you with specialist strata law firms who handle exactly this work.
