What does an owners corporation (body corporate) cover in Victoria?

An Owners Corporation (or body corporate), is responsible for the management of common property. They are also responsible for carrying out the responsibilities detailed in the Owners Corporations Act 2006. In this article, we’ll provide an overview of owners corporations in Victoria, and what that may mean for you as a property owner.

What is an owners corporation (body corporate)? 

On the 31st of December 2007 the official term changed from body corporate to owners corporation, but the responsibilities remain the same. Many people are familiar with the name, but not everyone knows exactly what an owners corporation does. Owners corporations manage the common property of a residential, commercial or industrial property development.

By owning property affected by common property, you automatically become a member of an owner’s corporation.

Common property

Common property usually applies to flats, apartments and units with communal gardens, stairs, lifts and foyers. But many other owned and shared spaces are considered common property. Common property will be defined on the plan of subdivision for a specific subdivided property. This is where the owners corporation comes in. They are responsible for, managing, insuring, repairing and maintaining all common property. If you are considering purchasing a property affected by common property, seek the advice of a property lawyer to understand your legal responsibilities.

What does an owners corporation cover?

Now, we’ll go into the roles and responsibilities of an owners corporation in detail. Remember to consult a property lawyer for the most reliable legal information if you are unsure about a property being affected by common property, or if you don’t understand your rights and obligations as an owners corporation member.

Administration

The owners corporation is responsible for the management of the common property including day-to-day paperwork and engagements with insurance companies and contractors. They are also responsible for organising the annual and special general meetings, as well as the meeting minutes, facilitating budget decisions, collecting members’ contributions and ensuring that financial statements and owners corporation records are up-to-date.

Maintenance and upkeep

The owners corporation is responsible for the maintenance of the common property. This might include gardens, amenities, car and pedestrian security gates, intercoms, stairs, lifts and public lighting.

They have the responsibility to obtain quotes and establish schedules for carrying out this work, ensuring the common property remains in good condition and poses no danger to visitors or members.

Dispute resolution

An owners corporation may attempt to resolve disputes between property owners, or between the owners corporation and property owners or third parties.

Management documentation

If the owners corporation appoints a manager then the manager is responsible for the management processes and record keeping of the owners corporation. The owners corporation is also required to maintain insurance and schedule essential services reports. They also need to ensure that all owners corporation functions are carried out in compliance with current legislation.

Insurance management

An owners corporation is responsible for insuring the common property.

Hosting annual general meetings

The owners corporation should hold an annual general meeting each financial year. The annual general meeting should address the following:

• Establish yearly budget
• Offer an update on any changes being made to the property
• Offer an update on issues that have since been resolved
• Address any concerns or issues including any maintenance required for common property
• Establishes yearly member financial contributions
• disclose the common property insurance premium

Finding a property law expert

Owners corporations play a crucial role in managing, maintaining, and ensuring the optimal functioning of any common property on subdivided land. When you purchase property affected by common property, you automatically become a member of that owners corporation. Owners will have the right to attend the annual general meetings and you will be responsible for the payment of owners corporation fees and levies. If you are unsure of your legal responsibilities, contacting a property lawyer is recommended.

Coulter Legal has experience in the full range of property and strata law responsibilities. Having acted for owners corporations, gated communities, retirement villages and golf course properties. We can assist with subdivision documentation for developers or offer advice on owners corporation governance, management and administration, financial management and insurance. In the event of a dispute arising, we collaborate with our litigation and dispute resolution team to ensure you have the support you need.

Get in touch with a member of our Property & Development team today.