If you’ve ever wondered about what is an owners corporation and how it can benefit your strata property, you’re not alone. Many individuals seek to understand what an owners corporation is and how it can contribute to the effective management, maintenance, and governance of shared properties. By exploring the role of an owners corporation, you can discover the advantages it offers in protecting property interests and fostering a sense of community living. Let’s delve into what is an owners corporation and uncover the value they bring to the table.
What is Owners Corporation and how does it apply to you?
- What is an Owners Corporation?
- The functions and responsibilities of an Owners Corporation
- Do I have to be part of an Owners Corporation?
- Owners Corporation Rules
- So, What is Owners Corporation Management?
What is an Owners Corporation?
An Owners Corporation is a legal body or entity that collectively manages a multi-occupancy subdivision of a building or land. An Owners Corporation is created when subdividing any property into two or more lots, i.e. a strata title property. This includes properties classed as residential, retail, commercial, industrial or mixed-use. Essentially, an owners corporation is convened with the sole purpose of implementing specific rules, maintaining the strata property and resolving disputes.
The term Owners Corporation is the new term for the old familiar Body Corporate. The Owners Corporations Act 2006 [Victoria] came into effect on the 1st of January 2008. The Act introduced a new framework for the management of multi-occupancy subdivisions and introduced the term ‘Owners Corporation’. The change of name was intended to bring Victorian legislation into line with the terminology used in other states and to emphasise that an Owners Corporation existed to represent the interests of lot owners.
The functions and responsibilities of an Owners Corporation
An owner’s corporation has to bear a range of important legal responsibilities to ensure shared properties are functioning effectively. By following the Owners Corporation Regulations 2018, an OC’s professional commitment and attention to detail, effective owners corporations can uphold the integrity of shared strata properties and encompass functioning community living.
The standard functions of Owners Corporation Management include:
- Repair and maintenance of the common property, fixtures and services, including the structural integrity of buildings on the premise.
- Standard approved maintenance of the building by following Essential Safety Measures by the Victorian Building Authority.
- Maintain correct and comprehensive insurance, including compulsory public liability insurance to guarantee adequate protection for all involved.
- Provide general management and administration of land and buildings.
- This includes organising member meetings, documenting accurate minutes, and handling correspondence efficiently.
- Provide statutory certificates to owners or prospective purchasers (Form 4 certification).
- This is to maintain transparency and compliance, which requires an owners corporation to preserve accurate reports, financial documentation, served orders and minutes of owner corporation meetings.
- Enforcing the Regulations and Rules of the OC; and mediating dispute resolution among members.
- Establishing a grievance procedure for dispute resolution.
- Ensuring all duties and regulations are followed under the Owners Corporations Act 2006 & the Owners Corporations Regulations 2007.
- Collecting owners corporation fees from owners to ensure financial obligations are met.
- Providing owners corporation certificates upon requests.
- Maintaining the registration of an owners corporation.
The responsibilities associated with an Owners Corporation Management include:
Owners corporations have varying responsibilities depending on the property size:
- Two-lot subdivisions are exempt from many legal requirements.
- Properties with over 100 lots or collecting more than $200,000 in annual fees have additional obligations, including:
- Forming and establishing a maintenance plan.
- Conducting annual financial statement audits.
- Obtaining valuations of all insured buildings every five years.
Owners corporations operate at different levels:
- Consisting of all lot owners involved.
- Establishing a committee comprised of elected lot owners or their proxies.
- Selecting a delegate (such as a manager, secretary, chairperson, employee or lot owner) for the owners corporation.
- The committee can also appoint a delegate, which may be a manager, a lot owner or a sub-delegate from within the committee.
These structures and responsibilities enable efficient management and actively describe what is an owners corporation.
Do I have to be part of an Owners Corporation?
If you own a property affected by an Owners Corporation (formerly known as Body Corporate) then you automatically become a member of that Owners Corporation. Most owners corporations in Melbourne and across Victoria will often elect to employ an owners corporation management company.
Flat, apartments, units, townhouses, and commercial estates generally involve an Owners Corporation and owners of such property are usually members of an Owners Corporation, previously known as a ‘Body Corporate’. All Bodies Corporate became known as Owners Corporations on 31 December 2007, when the Owners Corporations Act 2006 [Victoria] came into force. This law sets out the duties and powers of Owners Corporations Management Melbourne.
An Owners Corporation is automatically created when a plan of subdivision containing common property is registered with Land Victoria. Examples of common property may include gardens, swimming pools, tennis courts, passages, walls, pathways, driveways, lifts, foyers, and fences.
Owners Corporation Rules
Within the owners corporation management landscape, The 2006 Act enacts an owners corporation’s ability to hold governed meetings and resolutions. This includes the nomination of the committee and manager, duties and rights of lot owners and the prescribed dispute resolution process. This is referred to as the Annual General Meeting (AGM).
The Annual General Meeting serves as a gathered prime occasion for all owners involved to discuss strata and property-related matters, whilst being present to elect the committee and office bearers for the upcoming year, this can include changing your strata manager or issues relating to new body corporate management.
Furthermore, an OC may make additional rules by passing a special resolution. These additional owners corporation rules may then only be amended or revoked by special resolution.
If an OC does not make its own rules, the model rules apply as set out in Schedule 2 of the Owners Corporation Regulations 2007. The model rules are a brief outline of the responsibilities of the OC and lot owners.
Decisions or resolutions within Owners Corporation Management fall into 3 categories or levels. The nature of the item being decided upon will determine whether the resolution will be an Ordinary Resolution, Special Resolution or Unanimous Resolution.
The Majority Purpose of Each Type of Resolution:
Ordinary Resolution is resolutions of the Owners Corporation whereby 50% of eligible votes are required to pass the resolution.
A Special Resolution is the resolution of the Owners Corporation whereby 75% of eligible votes are required to pass the resolution. A Special Resolution is generally needed for deciding on matters such as setting annual fees, extraordinary expenditure, additional fees, leasing or licensing of common property etc.
Unanimous Resolution is a resolution of the Owners Corporation whereby 100% of eligible votes Include: selling or buying common property; altering boundaries; altering lot entitlement or liability.
So, What is Owners Corporation Management?
To tie it all together and answer what is an owners corporation? An owners corporation management plays a crucial role in maintaining the harmony and efficient operation of shared properties. At Strata Management Consultants, our strata consulting services can provide valuable insights or consulting advice to help steer you through the strata landscape. Ranging from overseeing the strata property to resolving disputes amongst owners, by fulfilling their strata responsibilities OCs contribute to the well-being and value of the properties they are selected to manage.
So, Get in touch with our friendly team of strata consultants here at Strata Management Consultants today, to get a better understanding of what is owners corporation and how understanding the importance of owners corporation is the key to fostering a successful strata living experience. Call us at 1300 917 848 or email us at firstname.lastname@example.org.