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Owners corporation law

08 Dec 2016

A golden opportunity to re-write the laws

Hoorah – the Victorian Government wants to hear from us about our views on the legislation relating to owners’ corporations.

As part of its comprehensive review of consumer property laws, which also include reforms around the sale of land and the regulation of estate agents, property managers and conveyancers, Consumer Affairs has released an options paper setting out a range of possible reforms to the Owners Corporation Act 2006.

The options paper will be open for public feedback until December 16 and is available for download from the Consumer Affairs website.

I for one, applaud Consumer Affairs’ approach in the way it has set out the issues and questions in the options paper. There is no doubt that the policymakers are giving considered thought to a number of issues that have plagued owners’ corporations for years and they are thinking creatively to help resolve these issues.

However, the policy-makers need your help. Without proper community feedback, the government may not get a truly representative and balanced view about the state of our vertical communities. Each owners’ corporation committee ought to be dedicating some time in the next two weeks to put together a submission.

Broadly speaking, there are eight areas that have been identified for possible reform. In no particular order, these are the regulation and licensing of owners’ corporation managers, the responsibilities of developers, the decision making process within owners’ corporations, dispute resolution and legal proceedings, the need to treat different sized owners corporations separately, the setting of budgets and determining insurance, the ability to re-develop and terminate owners’ corporations and where retirement villages fit in.

Consumer Affairs has asked 66 separate questions in relation to these areas and has suggested various models of reform, taking cues from legislation in NSW, the ACT and Queensland and has also attempted to create its own new models.

Some of these models will work very well in Victoria. Others, may not.

As the options paper identifies, the current version of the Owners Corporation Act is considered to be a “light touch” regulatory model. However, the increased regulation of owners’ corporations, and therefore greater interference in the property rights of lot owners, is argued to be justified on two grounds.

Firstly, lot owners owe a duty to each other to maintain and insure the common property, which includes paying their fees on time as well as enforcing a positive duty to take steps not to harm other lot owners’ amenity and the value of other lots.

Secondly, there is a perceived public interest in regulating owners’ corporations to ensure that they are democratically operated and not compromised by factions or cliques.

The outcome of this process will see draft legislation being drawn up and presented to Parliament in 2018. If passed, this legislation will likely last at least another 15 years. So, it is vitally important that owners’ corporation committees do not let this deadline expire without putting pen to paper.

Good luck keyboard warriors. Let us see the very best of democracy in action.

Tom Bacon

Principal - Strata Title Lawyers

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