The Law Handbook 2024

Chapter 6.5: Owners corporations 601 premiums, as will improvements to a lot. Under section 24(2B) of the OC Act, the relevant lot owner is liable to pay the increased premium. The owners corporationmay consider the merits of separate lot insurance, if permissible under section 61, or it may seek the unanimous consent of members to change the schedule of entitlement and liability. Failing consent, an application to VCAT under section 34D of the Subdivision Act may be considered. Meetings and decisions Annual general meetings The applicant for registration of a subdivision plan, which provides for the creation of an owners corporation, must convene the first meeting of the owners corporation within six months of registering the plan (s 66). An owners corporation must hold a meeting of its members within the first six months of registration. Documents that must be provided at the first meeting are listed in section 67 of the OC Act and include a maintenance plan. The applicant must disclose any relationship with the manager of the owners corporation and any financial transactions and benefits from that relationship. The initial owner of land affected by an owners corporation – or an associate (as defined) of an initial owner – must not: • be appointed as the manager of the owners corporation; • vote on any resolution of the owners corporation that relates to a building defect; • receive any payment from the owners corporation manager in respect of the manager’s contract; • create a private lot on what normally would be common property; and • propose an unreasonable or unsustainable annual budget. Unless an owners corporation resolves otherwise, a manager may pass an interim resolution at a general meeting if no lot owner is present provided additional expenditure is not greater than 10 per cent of the current annual budget and does not affect the manager’s contract of appointment. A lot owner in arrears must not vote as a proxy for another lot owner at a meeting or represent another lot owner for the purpose of election to a committee. A person must not vote as a proxy or attorney for more than one lot owner if there are 20 or less occupiable lots on the plan of subdivision and not more than five per cent of lot owners if there are more than 20 occupiable lots. Family exceptions apply. After the initial meeting, an owners corporation must hold an annual general meeting ( AGM ) only if it receives or pays out money in any financial year (s 69). The time between AGMs must not exceed 15 months (s 69(2)). Section 71(2) sets out the matters that must be dealt with and included in the agenda of an AGM. Tabling and consideration of the minutes of the previous AGM must be included as an agenda item. The person convening an AGM must give notice in writing of the meeting to each lot owner at least 14 days before the meeting, provide an agenda, financial statements, budget, topics for discussion, text of any proposed special or unanimous resolution, and advise that an owner may appoint a proxy (s 72). A resolution cannot be made if a matter is not included in the agenda. The notice must include, for consideration at the AGM, any decision to waive interest (s 29(4)), any approved maintenance plan (s 39), a valuer’s report (s 65(3)), committee report (s 115) or manager’s report (s 126), complaints (s 159), dispute resolution under Part 10 of the OC Act and the minutes of the previous AGM. A lot owner may participate in a general meeting in person, by teleconferencing or by proxy (s 80(1)). A proxy must act honestly and in good faith and exercise due care and diligence (s 87(5)). Office holders Under the OC Act (s 98), if an owners corporation does not have a committee, the lot owners must elect a member to be the chairperson. A chairperson may be removed by resolution at a general meeting (s 91(1)). If an owners corporation has a committee, the chairperson of the committee is also the chairperson of the owners corporation (see ‘Committees’, below). Even with this appointment, at a general meeting, the lot owners may elect one of their number or the owners corporation manager to chair the meeting. If this election has not been made and the chairperson of the owners corporation is present, the chairperson chairs the meeting (s 79).