HOW DOES AN OWNERS’ CORPORATION OPERATE?

by Michael Xu

First Meeting of an Owners’ Corporation

After a plan of subdivision that provides for the creation and the owners’ corporation is registered, the initial owner or applicant a must convene the first meeting of the owners’ corporation within 6 months of the registration of the plan. If this has not been done, owners representing 25 per cent or more of lot entitlements can agree to call the inaugural Annual General Meeting. Alternatively, lot owners may apply to VCAT for an order compelling the owners’ corporation to hold an Annual General Meeting.

At the first meeting, the owner or applicant must provide the owners’ corporation with the following:

 

              • the owners’ corporation register
              • a copy of the plan of subdivision and planning documents
              • copies of building contracts and building plans
              • the maintenance plan (for prescribed owners’ corporations or if necessary)
              • a copy of the Owners Corporations Act 2006, Owners’ Corporations Regulations 2018, Subdivision Act 1988 and Subdivision (Procedure) Regulations 2011
              • contracts, leases and licences binding or benefiting the owners’ corporation
              • insurance policies relating to the owners’ corporation
              • names of companies, tradespeople or suppliers who have provided a warranty or guarantee
              • books to enable the owners’ corporation to keep minutes, accounts and other records
              • any accounts or records made on behalf of the owners’ corporation
              • the common seal
              • rules registered with Land Use Victoria.

 

After this first meeting, an owners’ corporation is only required to have an Annual General Meeting if it receives or pays out money in a financial year.

General Operating Structure of an Owners’ Corporations

Once activated, an owners’ corporation usually operates on the following levels –

  1. The owners’ corporation, consisting of all the lot owners.
  2. The committee, consisting of elected lot owners or their proxies.
  3. A delegate of the owners’ corporation, for example, a manager, chairperson, secretary, lot owner or employee.
  4. A delegate of the committee. The committee may delegate to a lot owner, a manager or subdelegate to a member of the committee.

More details on how the owners’ corporation exercises its functions and powers can be found in the section on “How does an owners’ corporation exercise its functions and powers” below.

Rules

All owners’ corporations have rules for the control, management, use or enjoyment of common property and lots. The rules cover day-to-day issues such as parking, pets and noise.

If an owners’ corporation does not make its own rules, a set of model rules outlined in the Owners’ Corporations Regulations 2018 (Schedule 2) applies.

An owners’ corporation’s rules must be registered with Land Use Victoria. If they are not, they will be void and unenforceable and the model rules will apply.

All lot owners and tenants must be given a copy of the rules before they move in.

Owners’ corporations can apply to the VCAT to enforce rules and the tribunal can impose penalties for breaches of rules.

Owners’ corporations can make rules for:

  • health, safety and security
  • committees and sub-committees
  • management and administration
  • use of common property
  • use of and works to lots
  • design of lots
  • behaviour
  • dispute resolution
  • notices and documents
  • use of the common seal

For further information or enquiry on the above, please contact us or Michael Xu.