The Victorian Government introduced new strata laws to Parliament on 3 June 2026. The expert panel’s final report and its formal response have also been released.
For the Victorian strata sector, this is a big deal. One in five Victorians now live in a strata-managed property, and today’s announcement sets out some real, practical changes to how owners corporations (OC) run buildings and how owners are protected.
Last November, before anyone knew what the review would recommend, Fabienne Loncar from Chambers Russell Lawyers joined us for a LookUpStrata webinar on this topic. Fabienne called a lot of it. You can watch the recording below and download the presentation here: Upcoming legislative reforms for Victoria’s strata sector.
VIC: Upcoming legislative reforms for Victoria’s strata sector – what’s changing and what to expect
What has been introduced to Parliament
These are the first-tranche changes. The legislation has been introduced to Parliament but is not yet law.
Hardship payment plans for levy arrears
Owners who are struggling to pay their fees will have a clear, standardised right to ask for a financial hardship payment plan. Once a plan is in place, there can be no penalty interest charges and debt recovery has to stop while the plan is being considered or is active.
Fabienne flagged changes to levy debt in the November webinar. She noted that Victoria had held a fairly hard line on levy arrears while other states were moving toward payment plan frameworks.
Starting legal proceedings over rule breaches no longer needs a special resolution
This is one of the more practically significant changes. Previously, starting legal proceedings over a non-monetary matter, such as enforcing a rule breach, required a special resolution of the owners corporation. The government has confirmed that this will be corrected, so that an ordinary resolution will be sufficient for non-monetary claims, bringing the law into line with what the 2021 amendments were intended to do.
Fabienne flagged this as a live problem in the November webinar, describing it as almost impossible to resolve in many buildings under the current rules.
Ending the single-owner veto on subdivision plan changes
Changes to the Subdivision Act 1988 will make it easier for owners corporations to alter subdivision plans. Until now, unanimous agreement was required, which meant one owner could block something the rest of the building wanted. That veto is being removed.
Penalties for breaching the proxy cap
Breaching the statutory proxy cap, meaning stacking voting illegally, will now attract a penalty. Until now, there was no penalty attached to this conduct at all, which the expert panel found created little real deterrent.
Independent certification of initial maintenance schedules
Developers must have the initial maintenance schedule for a new building independently certified, and will face penalties if they don’t. For incoming owners and their OC, this means a more reliable picture of what the building needs and what it will cost to maintain.
What is coming in 2027
The government has confirmed a second tranche of reforms planned for next year. These are not yet in draft legislation but are formally supported.
A licensing scheme for OC managers has been confirmed. All non-volunteer individuals working as OC managers will need a licence, bringing the profession in line with other licensed real estate roles. The Business Licensing Authority will oversee the framework.
Expanded powers for Consumer Affairs Victoria to investigate and enforce compliance more proactively, rather than relying on the current model, which depends heavily on civil disputes. A dedicated OC regulatory division will be established within CAV, subject to future funding.
Stronger protections against manager misconduct, including tighter disclosure obligations and consequences for non-compliant managers. A centralised information hub for OC records and data is also on the table.
What the government decided not to do, for now
The government did not support two recommendations from the expert panel. One of the most talked-about issues was deferred rather than resolved.
Insurance commissions: deferred, not banned
The expert panel found that commissions and insurance kickbacks create a conflict of interest and recommended a ban. The government agrees there is a problem but will not commit, saying it needs more analysis, citing concerns that banning commissions could push up management fees and disrupt the market.
This will frustrate owners and committees who have been directly affected. New South Wales is already exploring a ban, and scrutiny of this issue has not abated.
Airbnb occupancy caps: rejected
The panel recommended a statewide cap of two people per bedroom for short-stay accommodation. The government rejected this, citing existing frameworks and the Short Stay Levy Act 2024 as sufficient tools. Owners using short-stay accommodation will also be required to notify their OC under the proposed changes, which gives committees more information, but the cap itself is not going ahead.
No dedicated strata commissioner
The government knocked back the recommendation for a dedicated strata commissioner. Instead, the government will set up a specialist OC regulatory division within Consumer Affairs Victoria, subject to future funding.
The expert panel review
The full report and government response are available at Review of the Owners Corporations Act 2006.
What this means for lot owners
If you are behind on fees and struggling to catch up, the hardship payment plan change is the most immediate piece of news. Once the laws pass, you can formally request a payment plan, and debt recovery has to stop while your request is being assessed.
If your building has been unable to enforce rule breaches because getting a special resolution to start proceedings was never realistic, the drop to an ordinary resolution threshold matters for you.
If short-stay accommodation has been an ongoing problem in your building, the proposed mandatory notification requirement provides your OC with more information, but it does not give committees significantly more power to restrict it.
What this means for strata managers
The licensing regime is coming. It is not in place yet, but it was confirmed today, and the design process has started. Now is the time to review your conflict of interest and disclosure processes and to seriously consider how your business model would work without commission income.
The government was blunt about the misconduct of managers. The minister’s statement today said that managers who take kickbacks and illegal commissions are “squarely in our sights.”
Which of Fabienne’s predictions were correct?
When Fabienne presented at the November 2025 webinar, she didn’t know what the panel would recommend. She discussed levy recovery and payment plans, voting thresholds, and manager conduct and commissions as the key areas. She also mentioned the licensing regime and told managers to get ready for a world without commission income.
The commission question is the one area where the government has pulled back, at least for now.
We are planning a follow-up webinar with Fabienne to work through the details once the legislation progresses. Keep an eye out for that session.
This article is general in nature and does not constitute legal advice. For guidance specific to your scheme, please seek independent professional advice.
The LookUpStrata Team
This post appears in Strata News #795.
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