The Law Handbook 2024

593 NOTE The law in this chapter is current as at 1 September 2023. What is an owners corporation? The registration of a plan of subdivision in a complex – an industrial, commercial, retail, residential or combined-use complex – automatically creates an ‘owners corporation’ (previously known as a ‘body corporate’). An owners corporation can be created if the plan of subdivision has common property or not. If the plan does not have common property, it usually contains common services. A plan of subdivision may also state that owners of all or some of the lots will be members of the owners corporation. An owners corporation that manages common property with specified limitations is known as a ‘limited owners corporation’. An unlimited owners corporation manages the land affected by the owners corporation, except the use of common property affected by a limited owners corporation. All lot owners are members of the unlimited owners corporation. Common property is held by the registered owners of individual lots as renters in common and usually includes gardens, walkways, foyers, storage areas, elevators, stairs, driveways, and communal facilities such as gymnasiums, swimming pools, recreational areas, meeting rooms and air space. An owners corporation has statutory rights and obligations for: • the welfare and maintenance of the common property; and • the owners and renters who have a legal interest. This chapter focuses on the rights and respons­ ibilities of people working and living in these communities and the dispute resolution processes that are available. Key legislation The legislation and rules relating to owners corporations include the: • Australian Consumer Law and Fair Trading Act 2012 (Vic) (‘ ACL&FTA ’); • Owners Corporations Act 2006 (Vic) (‘ OC Act ’); • Owners Corporations Regulations 2018 (Vic) (‘ OC Regulations ’); • Sale of Land Act 1962 (Vic) (‘ Sale of Land Act ’); • Subdivision Act 1988 (Vic) (‘ Subdivision Act ’); • Subdivision (Registrars Requirements) Regulations 2021 (Vic) (‘ SRR Regulations ’); • Victorian Civil and Administrative Tribunal Act 1998 (Vic) (‘ VCAT Act ’); • Water Act 1989 (Vic) (‘ Water Act ’); and • registered rules of the owners corporation. Note that the day-to-day running of an owners corporation is declared by the Subdivision Act (s 29) to be excluded from the operation of the Corporations Act 2001 (Cth). Consumer Affairs Victoria (see ‘Contacts’ at the end of this chapter) administers the OC Act, the OC Regulations, and the registration of owners corporation managers. NOTE All section references in this chapter are references to the OC Act, unless otherwise stated. Entitlement and liability The statutory basis for the allocation of lot entitle­ ment and lot liability are sections 27F and 33 of the Subdivision Act. The entitlement and liability of each owner is expressed in the plan of subdivision. Lot entitlement determines the voting rights of each owner and the lot owner’s share of any income the owners corporation may receive. A new section 27F(4) of the Subdivision Act lists the criteria for the creation or alteration of 6.5 Owners corporations Contributors: Norman Mermelstein and Neville Sanders, REIV Accredited Owners Corporations Specialists