Question: Is there a prescribed timeframe for a Victorian owners corporation manager to respond to complaints, and are they required to suspend debt collection while an invoice is disputed?
Is there a prescribed timeframe in which a Victorian owners corporation manager must respond to questions or complaints made?
Is a Victorian owners corporation manager required to suspend collections activity while an invoice amount is disputed and unresolved?
Answer: No prescribed response timeframe applies, and the owners corporation manager isn’t required to pause debt collection on a disputed invoice.
There is no prescribed timeframe under the Owners Corporations Act 2006 (the Act) which states that an owners corporation manager must respond to questions. However, it is generally expected that a manager will respond within a reasonable timeframe to act in the best interests of the owners corporation and lot owners to ensure they are kept informed of important matters in a timely manner.
Section 122(1) of the Act sets out the duties of an owners corporation manager, including that a manager:
- must act honestly and in good faith in the performance of the manager’s functions;
- must exercise due care and diligence in the performance of the manager’s functions;
- must not make improper use of the manager’s position to gain, directly or indirectly, an advantage personally or for any other person;
- must take reasonable steps to ensure that any goods or services procured on behalf of the owners corporation are obtained at competitive prices and on competitive terms;
- must not exert pressure on any member of the owners corporation to influence the outcome of a vote or election; and
- before entering into a contract for the supply of goods or services under which the manager is entitled to receive a commission, payment, or other benefit, must provide written notice to the chairperson of the owners corporation disclosing that commission, payment, or benefit in accordance with section 122B.
If a complaint is made to the manager about an alleged breach by a lot owner, occupier or the manager in the approved form, it is the owners corporation and not the manager who can decide to take action or not in relation to that alleged breach.
Section 154(1) of the Act provides that where an owners corporation decides not to take action under that Part, or not to apply to VCAT for an order in relation to an alleged breach, it must notify any person who made a complaint under section 152 of that decision. Pursuant to section 154(2), that notice must also include the reasons for the decision.
Again, no timeframe is provided.However, it is expected that responses will be received in a timely manner.
You should also consult the rules for your owners corporation and review any dispute resolution clause which may outline further timeframes within which an owners corporation is required to action any dispute. For example, in the Model Rules contained within the Owners Corporations Regulations 2018, the parties must meet to discuss any dispute within 28 calendar days of notice of the dispute.
In response to your next question, the owners corporation manager is not required to suspend collections activity whilst an invoice amount is disputed or unresolved.
In accordance with section 30(1) of the Act, an owners corporation may recover any money owed to the owners corporation in any court of competent jurisdiction as a debt due to the owners corporation. Therefore, provided that all levies have been validly raised, fee notices and final notices have been issued in accordance with the relevant provisions under the Act and the debt is due and payable, the owners corporation can proceed with collections activity.
This post appears in Strata News #800.
Katie Dam
Aitken Partners
E: kdam@aitken.com.au
Deborah Andronaco
Aitken Partners
E: dandronaco@aitken.com.au
P: 3 8600 6000
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