What is an Owners Corporation?
An Owners Corporation is automatically created when a plan of subdivision is created where there is common property and the plan is registered with Land Use Victoria.
The parcels of land identified within the plan of subdivision that can be sold separately are called Lots. These Lots are owned by members of the Owners Corporation. Effectively, if you purchase a titled Lot within a subdivision, you automatically become a member of the Owners Corporation.
Owners Corporation Management Structure
The management structure and authority hierarchy within Owners Corporation developments is often misunderstood, with many assuming that the role of an Owners Corporation Manager and Building Manager are one and the same. This is not the case.
It is important to understand the role of each party in the operations of an Owners Corporation to avoid unnecessary confusion, costs and stress.
Ultimately the Owners Corporation is the entity responsible for fulfilling its duties in accordance with its powers defined by the Owners Corporations Act 2006, the Regulations 2007 and Rules of the Owners Corporation.
Where an Owners Corporation consists of more than 12 Lots, a Committee is required to be appointed at each annual general meeting. The Committee is charged with the responsibility to represent the interests of the Owners Corporation in between annual general meetings within the limits of their delegated authority.
A Committee can make decisions on matters the do not require a Special or Unanimous Resolution, requires a general meeting resolution. A Committee cannot overturn decisions of the Owners Corporation either. Subject to such limitations, decisions of the Committee have the same effect as if decisions of the Owners Corporation.
To assist the Owners Corporation with the administrative and maintenance requirements of the development, the Owners Corporation engages the services of industry professionals such as Owners Corporation Managers and Building Managers.
Compliance with the obligations defined by the Owners Corporations Act 2006 for administrative and reporting requirement of the Owners Corporation is generally, and predominately, delegated to the Owners Corporation Manager.
An Owners Corporation Manager is appointed by an Owners Corporation (formerly body corporate) to carry out its functions in administering the common property. An Owners Corporation delegates authority to the Manager by entering into a Contract of Appointment (or other such instrument of delegation) with a schedule of duties and obligations.
These functions and services will generally include;
- Prepare annual financial statements of all income and expenditure and assets and liabilities of the Owners Corporation (the annual accounts) and bank account management
- Issue notices for fees set and special fees levied by the Owners Corporation
- Pay invoices on behalf of the Owners Corporation
- Arrange insurance, renewal and lodge routine insurance claims with insurers/brokers
- Arrange a valuation of the cost of reinstatement and replacement of the building/s when requested by the Owners Corporation
- Maintain the Register of the Owners Corporation
- Issue all Owners Corporation certificates and answer reasonable enquiries at the cost of the applicant/enquirer
- Deal with routine inwards and outward correspondence
- Keep the records of the Owners Corporation including minutes and postal ballots
- Convene, attend, submit a budget and financial statement to and record minutes of the Annual General Meeting and attend Annual General meetings
- Provide a report of the Manager’s activities to each Annual General Meeting and as may be required from time to time;
- Provide guidance to the Owners Corporation to enable the Owners Corporation to carry out and perform its duties and functions
- Generally implement the lawful decisions and instructions of the Owners Corporation