These Q&As about Owners Corporation Manager charges in Victoria have been supplied by Jane Giacobbe, Strata Reports Victoria.
Jump directly to the QUESTION you are after:
- QUESTION: As Owners Corporation Manager’s we’d like to know if we are justified in charging for two OC certificates per sale – one at the beginning & one prior to settlement.
- QUESTION: We have been charged a few fees by our Owners Corporation Manager which we feel are not lawful. What fees and charges can the Owners Corporation Manager charge?
- QUESTION: We are sick of being overcharged by our Strata manager, with additional billings of all and sundry for their strata management services. They are under a three year term, signed by the developer. What can we do?
Question: As Owners Corporation Manager’s we’d like to know if we are justified in charging for two OC certificates per sale – one at the beginning & one prior to settlement.
As Owners Corporation in Victoria, we charge the standard fee for an Owners Corporation certificate (per CAV) for the vendor when preparing sale documents.
Just prior to settlement, a conveyancer/lawyer contacts us for an update to the OC certificate. This is usually 2 – 3 months later. They are always upset at having to pay another fee for an OC certificate even though we have to do the work from scratch: reviewing all 16 questions, multiple attachments and financial statements. The fee is only approx. $150. Some say we should provide FREE updates for 3 months (although lawyers and other professionals would not provide their services for free) or phone updates (but which figures in particular?).
Please advise if we are justified in charging for two OC certificates per sale – one at the beginning & one prior to settlement. Please quote the appropriate legislation if possible.
Answer: This really comes down to your company office processes.
Yes, this is a common process that occurs when someone purchases into an owner’s corporations in Victoria.
A number of strata companies experience the same frustration from conveyancers and lawyers about the costs involved to obtain a second updated owners corporation (OC) certificate, which is at the same cost as the earlier one they have received.
The initial owners corporation certificate is required to be included within the section 32 of the Sale of Contract and to ensure that the purchaser is carrying out a little due diligence. Therefore, a conveyancer factors this cost into their overall purchase process but depending on how long the settlement is and the duration of time that has passed since the first oc certificate, then depends on whether they need to request an updated oc certificate. Herein lies the annoyance around the second fee for often just a slight update around the information contained within the updated owners corporation certificate.
When questioning whether you are justified in charging for two oc certificates, it really comes down to your company office processes, what is at stake due to the duration of time that has passed and how much time is required for the preparation of it.
Under section 151 of the Owners Corporation Act, a person may request an oc certificate in writing for a fee. Within the Owners Corporation Regulations 2018, a fee may be charged per oc certificate but it would come down to each owners corporation management company to determine whether they will charge the full fee for the second updated oc certificate.
Over the last couple of years purchasers have also started to carry out further due diligence and have been obtaining independent full strata reports before they purchase, as they cover a lot more information than an oc certificate.
Although this is a new process in Victoria it is the normal in other states such as NSW & QLD and has definitely seen an increase in popularity in Victoria as purchasers become more aware of the importance of due diligence before purchasing into an owners corporation.
We hope the above has been helpful but please feel free to contact us if you would like to discuss things or if we can be of further assistance.
This post appears in Strata News #362
Question: We have been charged a few fees by our Owners Corporation Manager which we feel are not lawful. What fees and charges can the Owners Corporation Manager charge?
A few years ago, we were charged roughly $200 by the Owners Corporation Manager for organising a ballot.
I noticed that a ballot template can be downloaded for free from the Consumer Affairs Victoria website. Can the Owners Corporation Manager legally charge a fee for conducting a ballot?
Secondly, we were recently advised that in order for the existing Owners Corporation Manager to be terminated, they will need to charge us a fee of $484 for preparation of records.
Can the Owners Corporation Manager legally charge these fees?
I wrote a friendly note and put it on the notice board in the common area, however, this has achieved nothing. I’ve also informed the owners corporation via email but have not received any response.
We don’t smoke but we are forced to clean up other people’s cigarette butts. We also have dogs and this can pose health risks to them if they accidentally eat one of the butts.
I would welcome any suggestions on how to best deal with this issue or what legal methods I could use to solve this.
Answer: The Contract of Appointment defines the fees and charges the OC Manager will charge the owners corporation for duties and functions that they carry out under their delegated authority.
Each Owners Corporation signs a Contract of Appointment when they appoint an Owners Corporation manager to be their managing agent.
Within that Contract you will find the fees and charges listed that the OC Manager will charge the owners corporation for duties and functions that they carry out under their delegated authority.
The charges that you are questioning around the ballot and preparation of the records for termination, should be listed in the executed Contract.
In order to be confident that the Contract is valid you should confirm the dates for the term of management and ensure that it is signed by the relevant parties and stamped with the common seal.
If it is valid and has been executed correctly in line with the Owners Corporation Act 2006, then the charges within that Contract are able to be charged to the Owners Corporation.
You may also like to visit the Strata Community Australia VIC (SCAV) for a list of their recommend charges that an Owners Corporation Management Company may include in their contract, to determine whether the fees that your Owners Corporation are being charged are fair and reasonable.
Hopefully the above is helpful but I would be able to provide further information if required and can be reached via the information below.
This post appears in Strata News #343.
Question: We are sick of being overcharged by our Strata manager, with additional billings of all and sundry for their strata management services. They are under a three year term, signed by the developer. What can we do?
We have quite a bit of unrest amongst our Owners Corporation committee members over the additional billings of all and sundry for management services of our strata. They want to seek an alternative. I’m interested to know a few things:
- Is it lawful for a developer to sign up the strata manager for a three year term? Why would they do that? Are commissions often involved here?
- The agreement was not signed by a witness. Could this void the agreement?
- The strata manager on a previous enquiry told us we did not have rights to the strata roll as it was a Privacy Act issue. This surely cannot be correct? Are they just preventing us from accessing owners contact details in order to block communications about this and/or other issues?
I’m sure there are other strata management companies whose billings are more in line with expectations. Are you aware of other more innovative ways of managing an Owners Corporation’s requirements that don’t involve overcharging like this strata manager?
Answer: The developer may have sold the OC management contact to the OC management company as a way of maximising their return on a project.
We can confirm that it is legal for a developer to sign a 3 year term in a contract of appointment with an Owners Corporation management company.
The developer holds that power as the original owner at the time of the First Annual General Meeting (sometimes also referred to as Inaugural Meeting in VIC) where the resolution is passed and the contract is signed and sealed. The actual term of the contract is also a decision that is made by the OC management company at the time of preparing the draft contract of appointment and relevant motions for the FAGM.
Their reasons for doing this do vary and in the best interest of full transparency for the Owners Corporation, you could present that question directly to the developer and the OC Manager.
We would like to think that the developer and OC manager have set a term of 3 years as they would like a strong long-term working relationship with the Owners Corporation to help establish things and have the building running efficiently.
However, there are sometimes other reasons that contracts of appointments are longer than 1 or 2 years and with some new developments. One reason is that the developer may have sold the OC management contact to the OC management company as a way of maximising their return on a project.
The OC management then needs to recoup the fee they have paid to the developer and one way to do that may include proposing that the term of the contract with the Owners Corporation is set for longer.
Having said all of this, we do not know that this is the case with your current OC management and it would be best to ask them directly so that you have full transparency and disclosure around the term that has been set.
If the contract has not been signed by a witness, it does not necessarily mean that it will be void.
You would need to go back and review the minutes from the First Annual General Meeting and the resolution that was made around the contract of appointment which should state how it would be signed and sealed.
If it is all correct, then my understanding is that the contract of appointment will not be made void without a witnesses signature, however, I would suggest possibly seeking legal advice if you feel strongly around that as there may be something more than what I am aware of.
Concerning the access to the strata roll, each owner does have the right to inspect the books and records of their Owners Corporation and that includes viewing the strata roll (which is known as the owners register in VIC). The owners register must include each lot owner’s name and address as a requirement under the Owners Corporation Act 2006 and as such that information is not subject to the privacy act.
The OC management may request that you complete the “Request to inspect Owners Corporation register and/or records” form which can be found on the Consumer Affairs Victoria’s website and you may need to pay a fee for any copies that you would like to take.
Should the owners corporation members feel uncomfortable in attending the OC management’s offices, you could also engage an independent company such as Strata Reports Victoria or Strata Reports NSW, to carry out an inspection of the books and records on behalf of the members within the owners corporation and obtain documents and information that you require.
We hope that our responses have been helpful and please feel free to reach out if you would like to discuss things further as we would be delighted to assist where we can.
Please note that the above is based on my knowledge and experience but if you would like to obtain actual advice it would be a good idea to seek that from a specialised Owners Corporation lawyer.
This post appears in Strata News #294.
Have a question about owners corporation managers overcharging in Victoria or something to add to the article? Leave a comment below.
This article is for reference purposes only and is not intended to be a comprehensive review of the developments in the law and practice or to cover all aspect of the subject matter. It does not constitute legal or other advice and should not be relied upon this way. Readers should take legal or other advice before applying the information containing in this publication.
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