FAQs

Frequently Asked Questions About Owners Corporations

You have probably noticed that we here at Strata Management Consultants have been using these terminologies interchangeably – well apologise for the confusion! Hopefully, this clears things up for you:

  • 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, the ‘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 the terminology can vary depending on who you’re speaking to. We hope the above sheds some light on the matter. In the strata industry, it can be both technical and full of jargon to make full sense of it all. Fortunately, here at Strata Consultants, we are here to help make things easier for your strata management needs.

  • 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?

More information on what is needed in a quorum to change strata management companies. Find out here today.

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 the process or timing will be 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.
Changing body corporate managers in Melbourne can be challenging to navigate without professional consultation, especially under Melbourne’s rules and regulations. For more information, follow our comprehensive guide today.

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 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?

Strata Management Consultants ™ does not manage 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 Management Consultants Melbourne does not manage any buildings.

To give you a deeper insight into who we are and what we do at Strata Management Consultants, read here to understand why we started.

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 live 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 achieved in a few days – find out more here.

We connect you with the first type of manager and help you avoid the costly mistakes caused by dealing with others. So, read our overview of the latest body corporate reviews and performances.

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 decisions 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 to changing strata management companies.

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

  • In Australia, when you buy a house on a piece of land, you get the Torrens Title (invented by Robert Torrens), you own the land and the house 100%.
  • The only shared asset you have are the fences you share with the neighbours, and you must split the cost of replacing the fence when it’s needed.
  • However, when a developer buys that house and land to get planning approval to build 20 apartments, the titling changes from Torrens to Strata Tile (older forms of strata are Company and Stratum Title).
  • Each one of the 20 owners will get a Strata title to their apartment.
  • The common property (lifts, common/shared pipes/cables, shared gardens, lobbies, etc.), the building structure, and the land is owned by a legal entity called an Owners Corporation (OC).
  • Those 20 owners are automatically members of the OC. They will have to contribute to the running costs of the OC based on their Lot Liability. Their voting rights are determined by their Lot Entitlement.
  • 99% of the time, the Lot Liability = Lot Entitlement. When it doesn’t, we should flag it and raise the question of “why?”.
  • If that development, for example, had 3 shops at the bottom of the building – there would 23 Occupiable Lots (20 apartments + 3 shops). Occupiable meaning can be used for something. While, non-occupiable being car parks, storage cages, etc.
  • With 3 shops in the building, the land surveyor who prepares the Plan of Subdivision (which designates what is common property and paid for by the 23 owners, or private property i.e., paid for the person who owns that lot when the thing breaks). The land surveyor will likely create more than 1 OC:
    • OC1 – owns all the land and building structure and all assets shared by all 23 lots. 99.5% of the time, all owners and all lots in the building are members of OC1.
    • OC2 – might be the 20 residential, i.e., the lift that services levels 2-5 owned by OC2 and only the 20 residential owners who paid for the lift.
    • OC3 – might be the 3 commercial shops that are on the ground floor. OC3 would own all the assets shared by the 3 shops i.e. the industrial waste collection contract for the high volume of waste the 3 commercial shops generate, and the 20 residential owners don’t have to pay towards OC3 costs.

 

  • From the above example – If you owned a given lot, you would receive a quarterly Levy Notice (to pay for your share of the OC budget) for OC1, and another separate Levy Notice (to pay for your share of the OC budget) for OC2.
  • If OC1 and OC2 were managed by 2 different companies, you would be getting 2 invoices/levy notices from 2 different companies with different logos, for your one apartment in the same one building.

OC and management company can be legally deemed to have a contract between if:

  1. the parties sign a Contract of Appointment (aka management agreement); or
  2. if the OC passes a resolution that ticks these contractual forming boxes:
    1. states the parties to the contract i.e the OC agrees to appoint ABC Pty Ltd.
    2. states an amount of consideration i.e the annual management fee is to be $x.
    3. states a start date i.e. starting on 1 January 2023.
    4. states a duration i.e contract is for 2 years.
The removal of an owners corporation manager in Victoria is a decision of the owners corporation. The owners corporation can make or pass a decision through a number of mechanisms and ways:
Through the elected Committee making a resolution to remove the owners corporation manager – either via a Committee Ballot or at a Committee Meeting
  • Through the owners making a resolution to remove the owners corporation manager – either via an owners corporation Ballot or at an Annual or Special General Meeting
  • The owners corporation manager is employed and paid by the owners corporation to manage all facets of the buildings and OC – in adherence to the Owners Corporations Act 2006.

Your body corporate does not need a managing agent if the body corporate or owners is classified as a Tier 2, 3, 4, or 5 owners corporation. Tier 1 owners corporations must have an owners corporation management company.

Yes, you can run your own body corporate (now known as owners corporation). If your owner corporation is a Tier 2, 3, 4 or 5 owners corporation. However, Tier 1 owner corporations must have an owners corporation management company. This is done by establishing an owner corporation and electing a chairperson and committee members to manage the body corporate services.

The chairperson and committee members will be responsible for setting the rules and regulations for the body corporate, managing finances and maintaining the common property. This can be quite a daunting task, which is why many owners choose to engage a manager to assist with the running of their new body corporate management company.

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.

To have an informed understanding of a body corporate, we would be more than happy to guide you here at Strata Management Consultants.

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 the responsibility for the upkeep of the building.

Strata managers in Victoria are more or less regulated by the Business Licencing Authority within Consumer Affairs Victoria. In some instances where there have been serious failings a lot owner, Committee, or owners corporation may take the strata manager or OC manager to VCAT for their misconduct.

You can change strata managers through an ordinary resolution of the owners corporation – this ordinary can either be passed by the Committee or the owners corporation (at a General Meeting or by way of an OC ballot).

Do you want a Professional, Honest, and Service-driven Body Corporate Management Company? Strata Management Consultants Melbourne can help you when it comes to a change in strata managers.

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