Lot owners should choose wisely and seek advice before filing VCAT proceedings

There has been a sharp rise in the volume of cases filed in VCAT by lot owners against owners’ corporations (OCs) and managers.

The increase in the volume of cases is partly explained by the COVID-19 lockdowns, which required most Victorians to work from home over the past two winters. There has been a great deal of frustration from lot owners and occupiers about the response time of managers and from OCs in responding to lot owners’ queries and follow-ups for maintenance requests, inspections, levy enquiries and the like.

However, what is more apparent in reading some of the latest judgments coming out of VCAT is that a number of litigants are seriously fed up with the quality of service they have been receiving from managers, and are seriously fed up with the lack of response/compassion from managers and committee members.

This has prompted a large influx of applications to VCAT, and these cases are clogging up the caseload management of Victoria’s largest tribunal.

If I can offer some timely advice to owners and occupiers before any more VCAT proceedings are filed, please take heed of the following …

OC levies and fees do need to be paid on time. If these fees can not immediately be paid, the lot owner needs to agree a payment plan with the OC. It is not appropriate to apply some form of “set-off” for a perceived claim against the OC for property repairs or maintenance.

All that will happen is that the matter will most likely end up in VCAT if the OC brings fee recovery proceedings, and interest, filing fees, administration fees and legal fees will be added to the costs that will be found to be payable.

If a lot owner has a serious claim against the OC for some other perceived slight or injury, this will always require a cross-claim which will be decided separately. There will be no set off applied, so a lot owner will always be saddled with the interest and other fees described above.

Furthermore, litigants do not have a right to bring proceedings against managers of the OC (aside from very limited rights prescribed under the Owners Corporation Act).

This is because there is no contractual agreement between a lot owner and a manager. The manager’s contract of appointment is a contract between the OC and a manager.

Accordingly, there is no basis on which a lot owner can seek compensation or damages for breach of the contract between an OC and its manager.

Good advice taken from a specialist lawyer in OC law should be sought before potentially expensive mistakes are made by unrepresented litigants. •