Strata / Owners Corporation Law (Victoria) FAQ

An owners corporation (OC) is the legal body created when a plan of subdivision with common property is registered. It comprises all lot owners and is responsible for managing, maintaining, and insuring common property. It replaces the older "body corporate" terminology.

Since December 2021, OCs are classified into five tiers based on size: Tier 1 (100+ occupiable lots), Tier 2 (51–99), Tier 3 (10–50), Tier 4 (3–9), and Tier 5 (2 lots or no common property). Higher tiers face more onerous governance and financial reporting requirements.

OC rules are the equivalent of NSW by-laws. Model rules apply by default, but the OC can adopt, amend, or revoke rules by special resolution (75%). Rules cover noise, pets, parking, renovations, use of common property, and conduct on the lot affecting others.

The OCA reforms effective December 2021 prohibit blanket pet bans. Rules may impose reasonable conditions — registration, keeping on leads in common areas, noise limits — but cannot unreasonably refuse a pet. VCAT can review unreasonable pet refusals.

Lot owners pay annual fees set at the AGM, comprising an administration fund (day-to-day expenses) and a maintenance fund (long-term capital works). Tier 1 and 2 OCs must prepare 10-year maintenance plans. Fees are proportional to lot liability.

Tier 1 and Tier 2 OCs must prepare a maintenance plan covering at least 10 years, identifying major capital works, estimated costs, and a funding schedule. The plan must be approved by ordinary resolution and reviewed at least every 5 years. Lower tiers are encouraged but not required.

Common property includes all land and structures on the plan of subdivision that are not within individual lots — lobbies, driveways, gardens, structural elements, roofing, and shared services. The OC must maintain, repair, and renew common property.

The OC maintains and repairs common property. Lot owners maintain the interior of their lot. Boundary disputes (pipes in walls, waterproofing, balcony tiles) are resolved by reference to the plan of subdivision and any relevant rule or resolution.

OC disputes are resolved through VCAT (Victorian Civil and Administrative Tribunal) under the OCA. Applications can seek compliance with rules, orders for maintenance, appointment of an administrator, and compensation. Mediation or conciliation through Consumer Affairs Victoria is often attempted first.

Yes. Where an OC is dysfunctional, not meeting obligations, or there are serious governance failures, VCAT can appoint an administrator with the powers of the OC committee for a specified period. This is a significant intervention reserved for serious cases.

An OC manager is a licensed professional engaged to administer the day-to-day affairs of the OC — collecting fees, arranging maintenance, coordinating meetings, and maintaining records. Appointment is by ordinary resolution. The manager must hold appropriate registration.

The OC must insure the building for full replacement value (reinstatement and replacement), hold public liability insurance of at least $20 million for Tier 1 and 2 OCs ($10 million for others), and maintain any other insurance required by the plan or rules.

Following the Grenfell and Lacrosse fires, Cladding Safety Victoria was established to assess and manage combustible cladding risks. Affected OCs may receive government funding for rectification. The Building Act 1993 amendments impose obligations on building surveyors and OCs to identify and address cladding risks.

Lot owners must obtain OC approval before altering common property or the external appearance of the building. Minor internal cosmetic changes generally do not require approval. Structural changes, window replacements, and balcony enclosures require a special resolution or common property by-law equivalent.

Tier 1 and 2 OCs must prepare audited annual financial statements. Tier 3 OCs must prepare financial statements reviewed by an independent person. Tier 4 and 5 OCs have reduced requirements but must still maintain proper financial records and present an annual budget.

The committee is elected at the AGM and makes decisions between general meetings. For Tier 1 and 2 OCs, the committee must have between 3 and 12 members. Committee members owe duties of good faith and must declare conflicts of interest.

Yes. The OC can bring proceedings against the developer, builder, or building surveyor for defects in common property under the Domestic Building Contracts Act 1995 (warranty claims), the Australian Consumer Law, or in negligence. Limitation periods apply — typically 10 years for structural defects.

Lot owners can appoint a proxy to vote at general meetings. The OCA limits the number of proxies one person can hold to prevent vote stacking — for Tier 1 and 2 OCs, no person may hold more than 5% of total lot entitlements in proxies. Proxy forms must be in writing.

When selling a lot in a Victorian strata scheme, the vendor's section 32 statement must include an OC certificate disclosing fees, arrears, insurance, rules, pending litigation, and maintenance fund balance. The certificate is obtained from the OC manager or secretary.

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