Frequently Asked Questions

WHAT IS THE DIFFERENCE BETWEEN A STRATA TITLE, BODY CORPORATE AND AN OWNERS CORPORATION IN VICTORIA?

What was previously known as a ‘Body Corporate’ became an ‘Owners Corporation’ on 31 December 2007, when the Owners Corporations Act 2006 came into force. ‘Strata title’ is a more generic term for a plan of subdivision containing common property that an Owners Corporation is responsible for managing.

WHY DO I NEED TO BE PART OF AN OWNERS CORPORATION?

When you buy into a subdivided property, you are not only purchasing the individual property, but also ownership of, and the right to use, the common property as set out in the plan of subdivision. This may include driveways, stairs, paths, lifts, lobbies, swimming pool, common garden areas and other facilities. The common property is managed by the Owners Corporation and if you buy a property of this type, you are automatically part of the Owners Corporation with its legal and financial responsibilities.

WHAT LAW REGULATES AN OWNERS CORPORATION IN VICTORIA?

The Owners Corporations Act 2006 sets out: • the functions and powers of an Owners Corporation. • the requirements of Owners Corporation meetings including procedures. • the election of Committees, Chairperson and Secretary of an Owners Corporation. • the duties and rights of Owners and Occupiers of an Owners Corporation.You can get a copy of the Owners Corporations Act 2006 and the Owners Corporations Regulations 2018 from http://www.legislation.vic.gov.au/.

CAN OUR OWNERS CORPORATION BREAK THE CONTRACT WE HAVE WITH OUR CURRENT MANAGER?

This very much depends on the Manager. The existing Manager may demand to be paid out the fees they would have earnt had the contract run its full term. Others take the view that they will negotiate to end their contract early. The best advice is to contact your current Manager and advise them that you wish to terminate the contract and then wait and see their response.

DO ALL THE MEMBERS OF OUR OWNERS CORPORATION HAVE TO AGREE TO APPOINT A MANAGER?

Whilst all members should be involved in the appointment of a Manager it only requires an Ordinary resolution (i.e. 50% or more of lot owners) present to agree to the appointment. This can be done either at a General Meeting or by a Postal Ballot, or possibly at Committee level depending on the individual circumstance of the Owners Corporation and if the power has been delegated to the Committee (or not).

WHERE DOES STRATACO HOLD MEETINGS?

Our Managers will discuss a suitable location with the Committee to hold a meeting, generally its within a close proximity to the building itself or alternatively we host many meetings near our office at the Jasper Hotel (Elizabeth St, Melbourne).

DOES OUR OWNERS CORPORATION HAVE TO ELECT A COMMITTEE?

If your Owners Corporation has 13 lots or more it is mandatory that a Committee be elected. A Committee can have between 3 and 12 members. If there are less than 13 lots it is at the members option whether or not to elect a committee. A Committee is elected each year at the Annual General Meeting (AGM)

WHAT HAPPENS IF OUR OWNERS CORPORATION RUNS OUT OF FUNDS?

If your Budget has been prepared accurately and a provision has been made for unexpected expenses the Owners Corporation should have sufficient funds. However, if more funds are required the Committee or members will need to authorise the Manager to raise a Special Levy or in extreme circumstances the Owners Corporation may look at obtaining a loan.

WHAT HAPPENS IF A MEMBER DOES NOT PAY THEIR LEVIES OR OTHER CONTRIBUTIONS?

There are processes set down as to how this is to be handled and largely depends on previous decisions made at your Annual General Meeting. Non financial members are not allowed to vote on ordinary resolutions at meetings nor participate in Committee meetings. Most Owners Corporations pass debt collection to a solicitor to recover the outstanding funds through VCAT and subsequent courts if enforcement action is required.

HOW DO WE KNOW IF OUR INSURANCE COVER IS ADEQUATE?

The members can instruct the Manager to arrange an insurance valuation which will indicate the level of cover needed to insure the property. Larger “Prescribed” Owners Corporation are required to undertake a valuation every 5 years and we recommend that smaller Owners Corporations obtain one every 3-5 years.

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