Reform of the Owners' Corporations Act is progressing

With the Andrews Government currently undertaking the biggest review of property legislation in the state’s history, reform of the Owners' Corporation Act is assured.

The Consumer Property Law Review is a comprehensive analysis of four key pieces of property legislation in Victoria, including the Owners' Corporation Act. An issues paper on the 2006 Act received more public submissions than any other with an options paper now available for feedback. 

The options paper aims to address issues that hinder the effective operation of owners’ corporations and their managers - particularly relevant in a market that is seeing a growing number of Victorians living in multi-dwelling developments governed by owners’ corporations.

At present, Victorian owners’ corporation managers are responsible for property worth about $300 billion and annual transactions of more than $1 billion. 

The REIV has worked closely alongside Government as part of the CPL review, calling for greater professionalism within the broader industry through strengthened licensing requirements and training standards.

The Institute has suggested a phased implementation of new licensing arrangements as well as a two-tier licensing structure – similar to the model that currently exists for estate agents. Recognition of prior qualifications and industry experience would ensure those already working in the industry are not disadvantaged. 

In addition, the REIV supports the introduction of ongoing education for owners’ corporation managers with targeted training by key industry bodies, such as Strata Community Australia and the REIV. This practice will align Victoria with New South Wales, where CPD forms part of its licensing requirements, and will enhance professionalism within this growing sector. 

To further improve the industry’s reputation the REIV has called on Consumer Affairs Victoria (CAV) to lift eligibility requirements for owners’ corporation managers - excluding persons convicted of serious criminal offences punishable by imprisonment of three months or more in the past 12 months.

The options paper also focuses on issues arising from inactive owners’ corporations, which affect property owners’ ability to effectively make decisions regarding maintenance and safety.

In support of this, the REIV has recommended the following:

•    Expand the existing duties of committee members to include a duty to act in the owners’ corporations best interest and the provision of guidance material and online training to support this;
•    Greater decision-making powers for owners’ corporation managers;
•    Greater penalties for lot owners who breach owners’ corporation rules;
•    Improve owners’ corporations ability to recover debts; 
•    Reduce the maximum committee size for smaller owners’ corporations to seven members;
•    Introduce mandatory maintenance plans for all owners’ corporations, regardless of size; 
•    Prohibit unfair terms in management contracts; and
•    Increase public liability to $20 million.

The REIV believes reform of this important piece of property legislation will provide greater professionalism within the owners’ corporation sector, delivering high management standards.

Submissions close 16 December, 2016.