FAQs

Frequently Asked Questions About Owners Corporations

A body corporate is a legal entity that is created when land is subdivided, and the common property has been created because of the newly created plan of subdivision. Any person (and all other owners) who owns a property within that plan of subdivision is automatically a member of the body corporate.

The body corporate as an entity exists to facilitate the management of the common property.

In Victoria, the term ‘body corporate’ was replaced with Owners Corporation when the Owners Corporations Act 2006 came into effect on 1 January 2007.

Strata management is also known as body corporate management and owners corporations management. These terms can be used interchangeably (depending on which state in Australia you’re in).

Strata management (or owners corporation management in Victoria) is the management of the legal entity that owners the common property of a building (i.e. the body corporate / strata scheme/owners corporation).

Strata management entails the convening and running of the Annual General Meeting, the setting of budgets, the collection of levies, the preparation of accounts and records, and responsibility for the upkeep of the building.

In Victoria, changing body corporate managers or changing owners corporation managers involves a number of considerations. After you ensure that you have a majority who want to change owners corporation managers then you the process or timing will determined by the following:
  • The Contract of the Appointment;
  • The Minutes of the last AGM; and
  • Instrument of Delegation (if one was signed);
And all of this should be considered in conjunction with the Owners Corporation Act 2006 (Victoria). We recommend speaking to a Strata Consultant on 1300 917 848 – and if there’s a question that we can’t answer we’d be happy to point you in the right direction.
This is our comprehensive guide on “how to change body corporate managers Melbourne?” https://strataconsultants.com.au/how-to-change-owners-corporation-managers

In Victoria, the process to become a registered Body Corporate / Owners Corporation Manager is surprisingly simple. There is no education or certification requirement (the industry has long talked about national certification however that is still a while away). The eligibility according to Consumer Affairs Victoria is as follows:

“Eligibility

Individuals

To be eligible for registration you must hold professional indemnity insurance with a minimum coverage of $1.5 million. 

You are automatically ineligible to be registered if you are currently:

  • under 18 years of age; or
  • insolvent under administration (bankrupt, debt agreements under Part IX or Part X); or
  • a represented person under the Guardianship and Administration Act 1986 (where a guardian or administrator has been appointed).

Companies

To be eligible for registration the company must hold professional indemnity insurance with a minimum coverage of $1.5 million.

The company is automatically ineligible to be registered if:

  • the company is under external administration; or
  • any of its directors  are currently insolvent under administration (bankrupt, debt agreements under Part IX or Part X) or a represented person under Guardianship and Administration Act 1986 (where a guardian or administrator has been appointed).

 

Fees

The application fee for 1 July 2017 to 30 June 2018 is $202.80.

The application fee must be paid at the time of application.

 

More information about the process to become a registered Owners Corporation Manager in Victoria can be found here at Consumer Affairs Victoria / Business Licensing Authority:

https://www.consumer.vic.gov.au/licensing-and-registration/owners-corporation-managers/registration/apply-for-registration

Strata Consultants Australia Pty Ltd is a 100% independent strata management brokering company. We’re body corporate management experts and industry insiders. We know who are the good guys in the body corporate management industry – and as such we work only with the best body corporate managers in Melbourne.

Our panel of Qualified Management Companies covers our costs, very much like an Aussie Home Loan or any other broker business model, meaning our body corporate transition service is at no cost to strata Owners.

We are paid a once-off fixed fee by the incoming body corporate management company that you select. Best of all as we’re same fixed fee (based on the number of lots) this means our only priority to help the Committee of your building to understand all the facts, costs/fees/charges and merits of all the prospective management companies.

Our Mission Statements is to act as an advocate for Owners and Committees – we do this by being independent and impartial.

Strata Management Consultants ™ does not manage any body corporates or owners corporations. Our objective as a company is to work for Committees and work with Committees. 

Since January 2014, we have been the trusted advice when owners corporations and Committees need help changing strata management companies.

We can only achieve these objectives by remaining 100% independent and as such Strata Consultants Melbourne does not manage any buildings.

 

Strata Management Consultants Melbourne is 100% independent.

We are not aligned, affiliated or related to any particular body corporate management company or groups of companies.

We work with a panel of Qualified & Approved Managers who are some of the best body corporate managers in Melbourne. We assess and review body corporate management companies in Melbourne on 5 key metrics:

  • Experience & Qualifications i.e. do the managers and business owner have the right body corporate management experience?
  • People & Servicei.e. are the body corporate managers being overworked and looking after too many buildings?
  • Integrity & Values i.e. do they charge an honest professional fee for managing buildings and act in the best of their clients (being the Owners and Committees)?
  • Systems & Processes i.e. strata management has evolved to be quite complicated and inherently has a high volume of transactions – do they have the right management software?
  • Knowledge & Trainingi.e. does the body corporate management company provide their managers with ongoing support and training?

 

Overview of Body Corporate Managers Melbourne Reviews & Performance

How do you assess all the body corporate managers reviews and performance in Victoria? First let’s start with the hard figures for Victoria:

  • 90,000+ owners corporations;
  • 1,000,000+ strata title lots; and
  • 1,300+ registered body corporate managers.

By 2030, half of Australia is projected to living in strata titled buildings. In a fast-growing industry, there are always dedicated professionals as well as opportunists.

In Victoria, when it comes to registering to become an owners corporation manager the process is surprisingly easy and can be achieve in a few days – find out more here.

We connect you with the first type of managers and help you avoid the costly mistakes caused by dealing with the others.

 

No – the decision as to who to appoint as the strata manager or strata management company is 100% that of the owners corporation.

Owners corporations will often elect a strata management Committee (also known as body corporate Committee) to make decision for and on behalf of the owners corporation. In fact, in Victoria the Owners Corporations Act 2006 stipulates that it is mandatory for owners corporations with more than 13 lots to elect a Committee at each Annual General Meeting.

Where there is a Committee representing the owners corporation then the decision as to who to appoint as the strata manager or strata management company is often that of the Committee.

In terms of Strata Management Consultants Melbourne – our job and role is solely to present the Committee with all the facts, figures, information, and guidance when it comes changing strata management companies.

We don’t make recommendations as our independence and impartiality are an integral part of what we do.

Strata managers in Victoria charge $300 to $500 per lot on average (total of all above charges). Owners Corporation Management Fees differ between different strata management companies however typically the following factors will be determinants of the pricing:

  • Size of the building and the number of Occupiable Lots
  • The facilities, amenities, and common property of the building
  • The location of the building and building usage (i.e. apartments, townhouses, commercial, industrial, or mixed-use)
  • On-site staff presence i.e. part-time or full-time building manager, facilities manager, concierge, security, etc.
  • The service expectations and other requirements of the owners of corporations.

It’s also important to note that Owners Corporation Management Companies derive their income/revenue from:

  1. Professional management fee (for the service of providing strata/owners corporation management.
  2. Disbursement fees (for costs that they incur in relation to things like printing, paper, envelopes, postages etc.)
  3. Insurance commission – typically 10-20% of the base insurance premium as the OC managers are often authorised representatives of an insurance broker or insurer. This can be a contentious issue at times and one we will often discuss with Committees as to how best to mitigate any potential conflicts of issues
  4. OC certificate fees – paid by the lot owner to the OC management company when they require an OC certificate for Section 32 when selling their lot in the owners corporation.

If you are concerned about the fees charged by your incumbent management company or any other cost aspects of your building’s operating expenses, most welcome to email us at office@strataconsultants.com.au and undertake a review.

In Victoria, Tier 1 and Tier 2 must appoint an owners corporation management company to manage their OC – unless they have opted not to do so via the passing of a special resolution of the owners corporation.

The Owners Corporations and Other Acts Amendment Act 2021 came into effect on 1 December 2021. The amendment categorises owners corporations into the following 5 tiers and stipulates certain requirements for each tier:

Tier 1Owners corporation that consists of more than 100 occupiable lots/not a services only owners corporation.

  • Owners corporation must elect a Committee at the annual general meeting.
  • Owners corporation must appoint a manager unless opted out by special resolution.
  • Financial statements must be audited by a registered or authorised auditor, or an accredited accountant.
  • Maintenance plans must be prepared and approved.
Tier 2Owners corporation that consists of 51 to 100 occupiable lots/not a services only owners corporation.

  • Owners corporation must elect a Committee at the annual general meeting.
  • Owners corporation may choose to have a manager but it is not mandatory.
  • Financial statements must be reviewed by either:
✓ an independent person who is a member of CPA Australia
✓ the Institute of Public Accountants
✓ Chartered Accountants Australia and New Zealand
  • Maintenance plans must be prepared and approved.
Tier 3Owners corporation that consists of 10 to 50 occupiable lots/not a services only owners corporation.

  • Owners corporation must elect a Committee at the annual general meeting.
  • Owners corporation may choose to have a manager but it is not mandatory.
  • Owners corporation may choose to have their financial statements audited by either of the methods used from Tier 1 or Tier 2.
  • Maintenance plans are not mandatory but may choose to have them prepared and approved.
Tier 4Owners corporation that consists of 3 to 9 occupiable lots/not a services only owners corporation.

  • Owners corporation may choose to elect a Committee.
  • Owners corporation may choose to have a manager but it is not mandatory.
  • Owners corporation may choose to have their Financial statements audited by either of the methods used from Tier 1 or Tier 2.
  • Maintenance plans are not mandatory but may choose to have it prepared and approved.
Tier 5An owners corporation for a 2-lot subdivision or a services-only owners corporation.

  • Owners corporation may choose to elect a Committee.
  • Owners corporation may choose to have a manager but it is not mandatory.
  • Owners corporation may choose to have their financial statements audited by either of the methods used from Tier 1 or Tier 2.
  • Maintenance plans are not mandatory but may choose to have it prepared and approved.

Strata property is a property title or ownership in a strata-titled building i.e. an apartment building, townhouse complex, or an office building where there are multiple owners. Strata title means shared assets or amenities (i.e. shared driveway, gardens, lifts, basement car park, swimming pools, etc.) and gives rise to the creation of an owners corporation.

Strata property or more accurately strata-titled property differs from Torrens titled property where you are the sole owner of the building and the land (with the only shared assets or property being the neighbouring fence).

A body corporate manager undertakes the key functions of accounting, insurance, documentation, AGMs, maintenance, and upkeep of the building, and provides guidance on body corporate / OC matters.

Yes, you have probably that we here at Strata Management Consultants ™ have been using these terminologies interchangeably. We apologise for the confusion.

  • In NSW, Strata Title was invented in 1961 as a better legal means of ownership when it came to apartments (replacing company title and stratum title);
  • Strata Title has since widespread in other states in Australia and internationally in many countries;
  • In NSW, ‘Strata Scheme’ is the legal entity that owns the common property in a building and the strata manager / strata management company is the entity engaged to undertake the strata management;
  • In QLD, ‘Body Corporate’ is the legal entity that owns the common property in a building and the body corporate manager / body corporate management company is the entity engaged to undertake the strata management;
  • In Victoria, since the inception of the Owners Corporation Act 2006, ‘Owners Corporation’ is the legal entity that owns the common property in a building and the owners corporation manager / owners corporation management company is the entity engaged to undertake the strata management;
  • We also happen to speak to a lot of people that will use ‘body corporate strata’, ‘OC manager’, or simply ‘strata’ – so terminology can vary depending on who you’re speaking to. We hope the above sheds some light on the matter.
  • A quorum of the owners corporation is defined as at least 50% of the total votes, or at least 50% of the total lot entitlements – per section 100 (1) of the Owners Corporations Act 2006
  • Owners corporations Victoria with 13 lots or more must elect a Committee at each AGM – per section 77 of the Owners Corporations Act 2006
  • A quorum of the Committee is at least half of the Members of the Committee – per section 112 (1) of the Owners Corporations Act 2006

Typically, the decision to terminate the owners corporation manager is an ordinary decision of the owners corporation.

 

How can the owners corporation (Victoria) make an ordinary resolution?

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