The Victorian Government has now responded to the Expert Panel Review of the Owners Corporations Act 2006 (Vic), signalling significant changes for Owners Corporations, lot owners and managers across the state.
While legislation is still to be drafted, the Government has accepted or supported many of the Panel’s recommendations. For committee members and lot owners, understanding the direction of these reforms is important.
The table below summarises some of the key proposed changes.
| Topic | Current Position | Proposed Changes | Why it Matters |
|---|---|---|---|
| Financial Hardship | No formal statutory hardship process exists. | Introduction of a financial hardship framework for owners experiencing genuine hardship. | May affect levy recovery processes and debt collection strategies. |
| Owners Corporation Managers | Registration is not currently required. | Introduction of a licensing or registration framework. | Increased professional standards and greater regulatory oversight. |
| Consumer Affairs Victoria Powers | Limited enforcement powers in some areas. | Expanded investigative and enforcement powers. | Greater ability for regulators to intervene in governance disputes and misconduct. |
| Committee Governance | Existing obligations apply but enforcement can be difficult. | Enhanced governance and disclosure obligations. | Greater accountability for committee members and decision-making processes. |
| Proxy Voting | Limit of proxy votes to 1 per person for OCs with 20 lots or less, or 5% of lots for OCs with more than 20 lots. | Restriction on multiple employees and associates of the same organisation exercising proxy votes beyond the existing proxy cap. | Addresses the issue of voting blocs controlled by OC managers, building managers and developers. |
| Dispute Resolution | Many disputes ultimately proceed to VCAT. | Improved dispute resolution pathways and earlier intervention options. | Potentially quicker and less costly resolution of disputes. |
These reforms reflect the growing complexity of strata living in Victoria.
Modern Owners Corporations are responsible for managing significant assets, substantial budgets and increasingly complex compliance obligations. The Government’s response recognises that governance structures established almost 20 years ago may no longer be adequate for many contemporary developments.
Importantly, these reforms are not yet law. Further consultation and legislative drafting will occur before the proposed changes take effect.
For Owners Corporations, managers and advisors, now is a good opportunity to review existing governance practices and consider how future reforms may impact the operation of their schemes.
The next stage of the reform process will be particularly important, as the detail contained within the legislation will ultimately determine how these proposals operate in practice.
© Bugden Allen Group Legal Pty Ltd. This is general information only and not legal advice. You should not rely on this information without seeking legal advice tailored to your specific circumstances.
This post appears in Strata News #803.
Julia Moroz
Bugden Allen
E: julia@bagl.com.au
P: 03 8582 8100
James Cooper
Bugden Allen
E: james@bagl.com.au
This article has been republished with permission from the author and first appeared on the Bugden Allen website.
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