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Maintenance Funds (Sinking Funds) in Victoria

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Financial Management ⏱ 7 min read  ·  Committee members, lot owners & buyers In this article What a maintenance fund (sinking fund) is and why it matters When a maintenance fund is legally required What a 10-year maintenance plan must include Signs that your maintenance fund may be underfunded Best practice for Tier 3, 4 or 5 OCs ℹ️ The best way to avoid special levies A well-funded maintenance plan is the most effective way to avoid the financial shock of large, unplanned special levies. Regular contributions spread the cost of major works over many years. A maintenance fund — formerly known as a sinking fund — is a dedicated reserve of money set aside by an owners corporation to fund future major repairs, replacements, and maintenance of common property. When is a Maintenance Fund Required? ⚖️ Tier 1 and 2 OC requirement — OC Act 2006 Tier 1 and 2 owners corporations (more than 50 occupiable lots) are legally required to establish and maintain a maintenance fund with an accompanying 10-year maintenance plan. Tiers 3, 4 and 5 owners corporations (2-50Lots) are not legally required to have a maintenance fund, but it is strongly recommended as a matter of best practice. Without one, unexpected major repairs must be funded through special levies — which can place significant financial strain on lot owners. The 10-Year Maintenance Plan Tier 1 and 2 owners corporations must prepare a maintenance plan covering at least 10 years that identifies: All items of common property requiring maintenance, repair, or replacement over the period Estimated costs for each item Expected timing for each item The annual contribution required to adequately fund the plan Common items in a 10-year plan Roof replacement, external painting, lift modernisation, fire safety upgrades, plumbing and drainage, car park waterproof membrane, pool equipment replacement, intercom systems, pathway resurfacing, and hot water system replacement. ⚠️ Signs your maintenance fund may be underfunded The balance is significantly below the accumulated liability in the maintenance plan The OC has needed to raise multiple special levies for items that should have been anticipated Visible deterioration of common property because repairs are being deferred The annual contribution has not increased in line with building costs over recent years 💡 For Tier 3, 4 and 5 OCs Even without a legal obligation, a simplified maintenance plan identifying major items likely to require attention over the next 10 years (with estimated costs) is a practical starting point. Reviewed annually, it protects all lot owners from financial shocks. Frequently Asked Questions 💰 What is the difference between a maintenance fund and a sinking fund? They are the same thing. ‘Sinking fund’ is the term used in other states. ‘Maintenance fund’ is the current terminology under the Owners Corporations Act 2006. 🔒 Can the OC spend maintenance fund money on other things? The maintenance fund should be used for the purposes identified in the maintenance plan. Using it for operational expenses or unrelated costs may breach the committee’s obligations and could be challenged by lot owners. 📋 Is the maintenance fund balance shown on the OC certificate? Yes. The OC certificate typically includes information about the maintenance fund balance — important for prospective purchasers assessing the building’s financial health. 📊 How is the annual contribution to the maintenance fund determined? It is determined based on the 10-year maintenance plan and the current fund balance. It should be sufficient to cover anticipated costs as they arise over the plan period. 📋 Key takeaways Tier 1 and 2 OCs (50+ lots) are legally required to have a maintenance fund and 10-year plan. Tier 3, 4 and 5 OCs (2-50 lots) are not legally required to have one, but it is strongly recommended best practice. An underfunded maintenance fund is one of the biggest drivers of unexpected special levies. The maintenance fund balance appears on the OC certificate — important for prospective buyers. Review and update the maintenance plan at least annually, and ensure contributions match anticipated costs. Maintenance fundSinking fund10-year planFinancial ManagementPrescribed OCSpecial levies OC OC Resource Centre Victoria’s independent educational resource for lot owners, committee members, and tenants. General information only — not legal advice. Last updated: March 2026.

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Special Levies: When, Why, and How Much?

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Financial Management ⏱ 7 min read  ·  Lot owners & committee members In this article When special levies are raised and what they fund The double-levy threshold and when a 75% vote is required How special levies are calculated and distributed Notice requirements for a general meeting to approve a levy How to challenge a special levy if it has been improperly raised ℹ️ Not all special levies are avoidable A well-funded maintenance plan minimises the need for special levies. But unexpected events — storm damage, building defects, urgent compliance works — can make them necessary even in well-run buildings. A special levy is a one-off financial contribution raised by an owners corporation to fund expenditure not covered by the regular annual budget. Understanding your rights and obligations when a special levy is proposed is essential. When Are Special Levies Raised? Major repair or replacement works (roof, lifts, replumbing, façade restoration) Emergency repairs following storm damage, flooding, or fire Building defect rectification Compliance works required by regulators or building surveyors Legal costs for VCAT proceedings or litigation Capital improvements approved by the owners corporation ⚖️ Special levy threshold — OC Act 2006 If the special levy is equal to or less than twice the annual fee → ordinary resolution (simple majority). If it is more than twice the annual fee → special resolution (at least 75% of votes cast). Calculation and Distribution Special levies are calculated using the same lot liability formula as annual levies, unless the benefit principle under Section 49 applies. Where works benefit some lots more than others, costs must be allocated proportionately based on relative benefit. Notice Requirements Lot owners must receive proper notice of the general meeting at which the special levy will be considered — including details of the proposed expenditure, the total amount, each lot owner’s share, and at least 14 days’ written notice. ⚠️ Can you refuse to pay? No. Once a special levy has been properly approved by the correct type of resolution, all lot owners are legally obligated to pay their share. Non-payment can result in penalty interest and legal action through VCAT or the Magistrates’ Court. Challenging a Special Levy A lot owner who believes a special levy was raised improperly has several options: If the wrong resolution type was used (e.g. ordinary resolution where a special was required), the levy may be invalid and challengeable at VCAT If the expenditure is unreasonable or not in accordance with OC functions, apply to VCAT for review If the benefit principle was not correctly applied, affected lot owners can dispute the allocation Always raise concerns with the committee first before escalating to VCAT Tips for Committees Raising Special Levies 💡 Transparency builds trust Obtain multiple competitive quotes, present clear and detailed information to lot owners before the meeting, and consider offering payment plans for large levies to ease financial hardship on affected lot owners. Frequently Asked Questions 🚫 Can the committee raise a special levy without a meeting? Yes and No. Special levies must be approved at a general meeting (or by postal/electronic ballot if the rules permit) if the amount to be raised is more than twice the annual budget. The committee can impose a special levy if the amount to be raised is less than this amount. 💸 What if I can’t afford to pay a special levy? Speak with your OC manager or committee about the possibility of a payment plan. Many OCs will arrange instalment payments for large special levies. However, the obligation to pay remains regardless of personal financial circumstances. 📊 How is a special levy different from an increase in annual levies? Annual levies are ongoing regular contributions that fund the annual budget. A special levy is a one-off charge for a specific purpose — separate from the regular annual levy. 📋 Key takeaways Special levies fund expenditure not covered by the annual budget — major repairs, emergency works, legal costs. Levies up to twice the annual levy require an ordinary resolution; above that, a special resolution (75%). Lot owners must receive at least 14 days’ notice of the meeting at which the levy will be considered (for a General Meeting or ballot) if the amount to be raised is more than twice the annual budget. All lot owners are legally obligated to pay a properly approved special levy — refusal can result in legal action. If you believe a special levy was improperly raised, raise it with the committee first, then escalate to VCAT. Special leviesFinancial ManagementOC Act 2006Special resolutionLot liabilityVCAT OC OC Resource Centre Victoria’s independent educational resource for lot owners, committee members, and tenants. General information only — not legal advice. Last updated: March 2026.

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How to Choose a Building Maintenance Contractor for Your Owners Corporation

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Building & Maintenance 13 min read • Contractor Selection Guide In This Guide Handyman vs professional building maintenance contractor Trade licence boundaries and when specialists are needed Preventive vs reactive maintenance approaches Retainer plus ad-hoc contract models Job tracking, reporting, and approval thresholds Victorian-specific considerations including maintenance plans Every owners corporation has a list of maintenance jobs that don’t neatly fit into a single trade category — a broken door closer, a cracked tile in the lobby, a leaking skylight, graffiti on the fence, a car park bollard knocked over, a loose handrail. These are the day-to-day building maintenance tasks that keep common property functional, safe, and presentable. The contractor you choose for this work is often the one you call most frequently. Handyman vs Building Maintenance Contractor There’s an important distinction between a handyman who does odd jobs and a professional building maintenance contractor who provides systematic property maintenance. For a small townhouse complex with minimal common property, a reliable handyman may be sufficient. For any building with lifts, lobbies, car parks, common facilities, or more than about 20 lots, you need a proper building maintenance contractor with capacity, systems, and accountability. A professional building maintenance contractor will typically offer regular site inspections and condition reporting, a job management system with tracking and reporting, capability across multiple trade areas (or subcontractor relationships for specialist work), emergency response capacity, and preventive maintenance programs. ℹ️ Key Distinction Preventive maintenance (regular inspections and proactive repairs) is always more cost-effective over time than reactive maintenance (fixing things when they break). A good building maintenance contractor will offer a preventive program that catches issues before they become expensive problems. Licences and Qualifications Domestic builder registration. Any building work valued over $10,000 on a domestic building requires VBA Domestic Builder registration. For general building maintenance, the relevant registration may be Domestic Builder — Unlimited, or a Limited registration for specific trades. Trade licences for specific work. Certain work must only be done by licensed tradespeople — electrical (ESV licence), plumbing (VBA plumbing licence), and gas fitting (VBA gas licence). Your contractor should either hold the relevant licences or have licensed subcontractors. They should never perform licensed trade work without the appropriate licence. Working at heights. If the building has areas requiring ladder access, scaffolding, or elevated work platforms, the contractor must comply with WorkSafe Victoria regulations including training, equipment, and safe work method statements. Insurance. Public liability (minimum $10 million), WorkCover for all employees, and coverage for any equipment used. Essential Questions to Ask Before Hiring How many strata buildings do you currently maintain? Ask for specific references from OC managers focusing on reliability, communication, and value. Do you offer preventive maintenance programs? A good contractor will offer regular inspections, identification of issues before they escalate, and scheduled seasonal work (gutter clearing, weather sealing). What is your job management and reporting system? You need visibility into what work is being done, when, and at what cost. Monthly reports showing all jobs completed, time and materials, and outstanding items are essential. What is your response time for different priority levels? Define emergency (safety risk, 2–4 hours), urgent (functional impact, 24 hours), routine (5–10 business days), and planned (next scheduled visit). How do you handle work that crosses into licensed trades? If they discover a plumbing leak or electrical fault, they need to recognise the boundary of their competence and engage a licensed tradesperson. Ask how they manage this. Red Flags to Watch For ⚠️ Warning Signs Performing licensed trade work without a licence — if your contractor does plumbing, electrical, or gas work without licences, the OC is exposed to safety risk and legal liability No formal quoting or job tracking — “just call me and I’ll sort it” with no documentation means no oversight of costs Inflated materials mark-ups — 30–50% above retail is common but should be disclosed; ask for transparency No preventive approach — a contractor who only shows up when called isn’t managing your building, they’re reacting to it Unable to provide strata references — any established contractor servicing strata should have multiple references How to Structure the Contract Retainer plus ad-hoc model. A monthly retainer covering scheduled preventive maintenance visits (typically monthly or fortnightly) including inspections, minor repairs, and a set number of included hours. Ad-hoc work billed on pre-agreed rates. Retainer Scope Regular inspection of all common property areas with a documented checklist Minor repairs taking less than 30 minutes and materials under $100 included in retainer Written report after each visit detailing work done and items requiring attention Quarterly review meetings with the OC manager and committee representative Schedule of rates. Pre-agree hourly rates for the contractor and regular subcontractors, call-out fees, after-hours rates, and materials mark-up percentage. Approval thresholds. Define spending authority: OC manager can authorise work up to $500, committee chair email approval for $500–$2,000, full committee approval or competitive quotes over $2,000. Victorian-Specific Considerations Maintenance plans. Under the OC Act, your OC should have a maintenance plan covering foreseeable maintenance over a 10-year period. Your building maintenance contractor can be a valuable input to this plan, helping identify and prioritise medium-term needs. Building permits. Some maintenance work may require a building permit — particularly if it involves structural elements, changes to fire-rated construction, or work in flood-prone or bushfire-prone areas. Heritage buildings. If your building is in a heritage overlay, maintenance and repair work on heritage fabric may require a planning permit and must generally use like-for-like materials and methods. Defect liability. For any discrete project (as opposed to routine maintenance), ensure a defects liability period — typically 12 months — during which the contractor will rectify any defects at no additional cost. Frequently Asked Questions How much should an OC budget for building maintenance annually? As a rough guide, budget 1–2 percent of the building’s replacement value annually for total maintenance (including all trades). The building maintenance retainer component is typically $500–$2,000 per month depending on building size and complexity, plus ad-hoc work as

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How to Choose a Plumber for Your Owners Corporation

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Building & Maintenance 12 min read • Contractor Selection Guide In This Guide Why OC plumbing is different from residential plumbing VBA licence classes and insurance requirements to verify Essential questions to ask before hiring Red flags that signal an unsuitable contractor How to structure quotes, contracts, and maintenance agreements Victorian-specific compliance considerations Plumbing is one of the most frequent and potentially costly maintenance issues owners corporations deal with. From burst pipes flooding common areas to blocked drains affecting multiple lots, the wrong plumber can turn a minor issue into a major insurance claim. Getting this hire right matters more in strata than almost anywhere else, because the consequences of poor work often ripple across the entire building. Why OC Plumbing Is Different from Residential Plumbing Common property plumbing in a multi-lot development is fundamentally different from fixing a leaky tap in a house. Your plumber needs to understand shared infrastructure — main stacks, common drainage, hot water plant rooms, fire hydrant boosters, and the boundary between lot and common property plumbing. They also need to work within the OC’s governance framework, which means quoting properly, communicating with the committee (not just one lot owner), and understanding that emergency call-outs on common property may require OC approval processes. ℹ️ Legal Obligation Under the Owners Corporation Act 2006 (Vic), the OC must maintain common property in good repair. Plumbing failures on common property are the OC’s responsibility — not the individual lot owner’s. Licences and Qualifications to Verify Plumbing licence. All plumbers in Victoria must be licensed by the Victorian Building Authority (VBA). Verify on the VBA public register. Different licence classes cover general plumbing, sanitary, drainage, roofing/stormwater, mechanical services, and fire protection. A general plumber may not be licensed for fire services work. Compliance certificates. Licensed plumbers must lodge compliance certificates with the VBA for regulated work. Ask whether they consistently lodge these — it’s a legal requirement and a sign of professionalism. Insurance. Confirm current public liability insurance (minimum $10 million for commercial strata work), professional indemnity if providing design advice, and WorkCover for all employees. Request certificates of currency, not just verbal assurances. Asbestos awareness. If your building was constructed before the mid-1990s, the plumber must hold appropriate asbestos awareness training at minimum, as they may encounter asbestos-containing materials. Essential Questions to Ask Before Hiring How many owners corporations or strata buildings do you currently service? You want someone who understands the OC context — multiple stakeholders, committee approvals, access coordination across lots, and the difference between common property and lot property boundaries. Can you provide a fixed-price quote for defined scope, and an hourly rate for investigation/diagnosis work? OC budgets need predictability. Best practice is a fixed quote for known scope and hourly rates for diagnostic work, with a cap or approval checkpoint. What is your emergency response time and after-hours availability? Plumbing emergencies in strata don’t wait for business hours. Understand their call-out fees, response time commitment, and whether they have a dedicated after-hours line. How do you handle communication with committees and OC managers? You need a plumber who provides written reports, photos of completed work, and communicates through proper channels — your OC manager or committee contact, not just the lot owner who reported the issue. What warranty do you provide on workmanship? Industry standard for plumbing workmanship is typically 12 months. Manufacturer warranties on parts are separate. Get both in writing. Red Flags to Watch For ⚠️ Warning Signs No VBA licence number on quotes or correspondence — if they can’t provide their licence number upfront, walk away Reluctance to provide written quotes — verbal quotes are unacceptable for OC work No experience distinguishing common property from lot property — this creates disputes about who pays Pushback on providing certificates of currency for insurance — any professional provides these without hesitation History of not lodging compliance certificates — check with the VBA; non-compliance signals broader quality issues Only one-person operation with no backup — for OC work you need reliability and emergency coverage How to Structure Quotes and Contracts For ongoing maintenance relationships, structure the engagement in two parts: Scheduled maintenance agreement. An annual or bi-annual contract covering routine inspections, preventive maintenance (clearing drains, checking hot water systems, inspecting pump equipment). This should be a fixed annual fee, payable monthly or quarterly, with a clear scope of inclusions. Ad-hoc and emergency work. A separate schedule of rates for reactive work — hourly rates, call-out fees, after-hours premiums, and materials mark-up. Include a threshold (e.g., $500 or $1,000) below which the OC manager can authorise work without committee approval. Quoting Best Practice Obtain 2–3 quotes for any work over $2,000 — this is good governance and may be required by your OC rules Ensure quotes include clear scope, fixed price, timeline, warranty terms, and exclusions Set approval thresholds so urgent work isn’t delayed waiting for committee meetings Victorian-Specific Considerations Essential Safety Measures (ESM). If your building has fire services (hydrant booster, sprinklers, hose reels), these require annual ESM inspections by appropriately licensed contractors. Your general plumber may not hold the fire protection licence class required. Backflow prevention. Victorian regulations require annual testing of backflow prevention devices. Your plumber should either provide this service or flag it for a specialist. Water efficiency. For fixture replacements on common property, Victorian building regulations may require water-efficient fittings. Your plumber should advise on compliance. Frequently Asked Questions Who pays for plumbing repairs — the OC or the lot owner? If the plumbing infrastructure is on common property (main stacks, shared drainage, common hot water systems), the OC pays. If the issue is within a lot’s boundary (internal fixtures, pipes within lot walls), the lot owner pays. The boundary is defined by your plan of subdivision. Your plumber should understand this distinction. How often should common property plumbing be inspected? At minimum, an annual preventive maintenance inspection is recommended, covering drain clearing, hot water system checks, pump equipment, and visible pipework condition. Buildings with older plumbing or known

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The Owners Corporations Act 2006 (VIC): Plain English Summary

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Legal Reference ⏱ 9 min read  ·  All lot owners, committee members & managers In this article What the Act covers and how it is structured Part-by-part overview in plain English Key sections every lot owner should know The major amendments since 2006 — 2019 and 2021 Where to access the full text of the legislation ℹ️ The foundation document for all OC matters in Victoria Every right, obligation, dispute process, governance requirement, and penalty in this resource ultimately traces back to the Owners Corporations Act 2006. Familiarity with its structure helps you find the answers you need. The Owners Corporations Act 2006 (Vic) is the primary legislation governing owners corporations in Victoria. This guide provides a plain English overview of its structure and key provisions. Structure of the Act Part What it covers Key sections Part 1 — Preliminary Purpose, definitions, and application of the Act Sections 1–3 Part 2 — Owners Corporations Functions, powers, lot owner rights and obligations, maintenance duties Sections 4–22 (esp. 7, 46–47) Part 3 — Fees and Contributions Annual fees, special fees, penalty interest, maintenance fund Sections 23–38 Part 4 — Financial Management Accounts, statements, audit requirements Sections 39–43 Part 5 — Insurance Building insurance, public liability, valuation requirements Sections 55–68 (esp. 59–60) Part 6 — General Meetings AGMs, SGMs, notice, quorum, voting, proxies, resolutions Sections 69–96 (esp. 72, 75) Part 7 — Committees Composition, powers, procedures, conflict of interest Sections 97–120 Part 8 — Rules Model rules, registered rules, enforcement Sections 136–143 Part 8A — Retirement Villages Special provisions for retirement village OCs Sections 143A–143F Part 9 — Records Record keeping, OC register, Form 4 certificates Sections 144–151 Part 10 — Dispute Resolution Internal complaints, grievance process, breach notices Sections 152–161 Part 11 — VCAT Applications Jurisdiction, who can apply, orders available, short-stay provisions Sections 162–169 Part 12 — Managers Registration, duties, regulation of OC managers Sections 170–198 ⚖️ Sections every lot owner should know Section 7 — lot owner rights and obligations | Sections 46–47 — OC’s duty to maintain common property | Sections 59–60 — compulsory insurance | Section 72 — AGM timing | Section 75 — requesting a special general meeting | Section 163 — VCAT applications Key Amendments Since 2006 2019 — Short-stay accommodation: Part 10 Division 1A and Part 11 Division 1A introduced — complaint process, prohibition orders, and compensation for short-stay conduct issues 2021 — Governance reforms: Default committee maximum reduced to 7 members (up to 12 by 50% majority vote), clearer framework for electronic meetings and voting, updated penalty provisions 💡 Access the full text for free The complete, current text of the Act — including all amendments — is freely available at legislation.vic.gov.au. Search for ‘Owners Corporations Act 2006’. Frequently Asked Questions 📄 Where can I access the full text of the Act? Freely available at legislation.vic.gov.au. Search for ‘Owners Corporations Act 2006’ — the consolidated version includes all amendments. ⚖️ Is this summary a substitute for legal advice? No. This is a general orientation guide. For specific legal questions about your situation, always consult a lawyer with owners corporation experience. 📋 Key takeaways The Owners Corporations Act 2006 is the foundation of all OC governance in Victoria — it covers everything from creation to dispute resolution. It commenced on 31 December 2007, replacing the old ‘body corporate’ framework under the Subdivision Act 1988. Key sections every lot owner should know: Section 7 (rights & obligations), Sections 46–47 (maintenance duty), Section 59–60 (insurance), Section 163 (VCAT applications). The Act has been significantly amended in 2019 (short-stay accommodation) and 2021 (electronic meetings, committee sizes). The full text is freely available at legislation.vic.gov.au — this summary is for general orientation, not a substitute for legal advice. OC Act 2006Legal ReferenceLegislationPlain EnglishVictoriaOC governance OC OC Resource Centre Victoria’s independent educational resource for lot owners, committee members, and tenants. General information only — not legal advice. Last updated: March 2026.

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OC Regulations 2018: What You Need to Know

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Legal Reference ⏱ 6 min read  ·  Committee members & lot owners In this article What the Regulations cover and how they relate to the Act The model rules (Schedule 2) — what they say and when they apply Prescribed forms — proxy forms, complaint forms, levy notices, and certificates Financial thresholds that determine whether an OC is prescribed The grievance procedure timeframes set out in the Regulations ℹ️ The Regulations provide the ‘how’ to the Act’s ‘what’ Where the Act sets out what must be done, the Regulations explain how to do it — the forms, timeframes, thresholds, and detailed rules that implement the Act’s requirements. The Owners Corporations Regulations 2018 (Vic) complement the Act by providing the detailed rules, procedures, and forms for implementing its requirements. The full text is freely available at legislation.vic.gov.au. The Model Rules (Schedule 2) The model rules are the default rules for all Victorian owners corporations. They apply automatically unless the OC has adopted registered rules that override them. ⚖️ Model rules — key conduct provisions The model rules cover: noise restrictions (no undue noise in or about common property or any lot), parking, pets (no animal likely to cause nuisance without OC approval), waste disposal, use of common facilities, behaviour on common property, and the internal grievance procedure. The model rules cannot be changed by an individual OC. However, an OC can adopt registered rules by special resolution (75% of votes cast) that override or supplement the model rules on specific matters. Registered rules must be lodged with Land Victoria to take effect. Prescribed Forms The Regulations prescribe the forms that must be used for various OC activities: Form Purpose Proxy form Authorising someone to vote on your behalf at a meeting Complaint form Lodging a formal complaint with the owners corporation Levy notice Notifying lot owners of levy amounts and due dates OC certificate Providing a snapshot of the OC’s financial and governance status (Section 151) Grievance Procedure Timeframes Section 7 of the Model Rules sets out that the internal grievance hearing should take place within 28 calendar days after the dispute comes to the attention of all parties. This tight timeframe encourages prompt resolution of internal disputes before escalation. Frequently Asked Questions 🔄 Can the model rules be changed? The model rules cannot be changed by an individual OC. However, an OC can adopt registered rules by special resolution that override or supplement specific model rules. 📄 Where can I find the full text of the Regulations? Freely available at legislation.vic.gov.au — search for ‘Owners Corporations Regulations 2018’. 📋 Key takeaways The Owners Corporations Regulations 2018 provide the practical procedural detail that sits behind the Act. The model rules (Schedule 2) apply automatically to all OCs unless custom registered rules override them. An OC can adopt registered rules by special resolution (75%) to supplement or replace model rules. The grievance procedure timeframe is 28 calendar days from when the dispute comes to the attention of all parties. OC Regulations 2018Legal ReferenceModel rulesPrescribed formsFinancial thresholdsVictoria OC OC Resource Centre Victoria’s independent educational resource for lot owners, committee members, and tenants. General information only — not legal advice. Last updated: March 2026.

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2021 OC Act Amendments: What Changed for Victorian Owners Corporations

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Legal Reference ⏱ 18 min read  ·  Lot owners, committee members & OC managers In this article The new five-tier system replacing prescribed/non-prescribed OCs Governance reforms — committee duties, proxy restrictions, voting changes Financial administration — levying for damage and insurance excess OC manager reforms — contract limits, commission disclosure, registration New rule-making powers — smoke drift, sustainability, fire safety, hardship What your OC needs to do in response ℹ️ The most significant OC reform since 2006 The Owners Corporation Amendment (Governance and Integrity) Act introduced wide-ranging reforms commencing from 1 December 2021. These changes affect how OCs are classified, governed, and managed — touching everything from committee duties and voting rules to OC manager obligations and rule-making powers. This guide covers every key change introduced by the Amendment Act, organised by the five main reform areas: the new tier system, governance and decision-making, financial administration, OC manager reforms, and new rule-making powers. 1. The New Five-Tier System One of the most significant structural changes is the replacement of the old “prescribed” and “non-prescribed” classification with a new five-tier system. Under the previous framework, an OC was either prescribed (more than 100 lots or more than $200,000 in annual fees) or non-prescribed. The new system provides a more graduated approach, with larger OCs subject to more stringent regulations. ⚖️ Key change — graduated regulation by size Larger OCs now face progressively stricter requirements for committees, financial reporting, auditing, and maintenance planning. Tier Definition Tier 1 More than 100 occupiable lots (and not a services-only OC) Tier 2 51 to 100 occupiable lots (and not a services-only OC) Tier 3 10 to 50 occupiable lots (and not a services-only OC) Tier 4 3 to 9 occupiable lots (and not a services-only OC) Tier 5 2-lot subdivision or a services-only OC Committees by tier Tier 1, 2, and 3 OCs must elect a committee at the AGM. Tier 4 and 5 OCs may choose to elect a committee but are not required to. All committees must have between 3 and 7 members, unless the OC resolves by ordinary resolution to increase the maximum to 12. OC managers by tier Tier 1 OCs must appoint a manager, unless the OC opts out by special resolution. Tier 2, 3, 4, and 5 OCs may choose to have a manager, but it is not compulsory. Financial statements by tier Tier Financial statement requirement Tier 1, 2, 3 Must prepare annual financial statements per Australian Accounting Standards and present at AGM Tier 4 Must prepare annual financial statements for any year in which it levies annual fees Tier 5 No mandatory requirement Auditing by tier Tier Audit / review requirement Tier 1 Must be audited by a registered or authorised auditor, or an accredited accountant Tier 2 Must be reviewed by an independent member of CPA Australia, Institute of Public Accountants, or Chartered Accountants ANZ Tier 3, 4, 5 May choose to have statements audited or reviewed — not required A review or audit cannot be conducted by someone with a direct or indirect personal or financial interest in the OC. Maintenance plans by tier Tier 1 and 2 OCs must prepare and approve a maintenance plan. Tier 1 OCs were given 12 months after commencement; Tier 2 OCs were given 24 months. Tier 3, 4, and 5 OCs may choose to prepare a maintenance plan but are not required to. Plans can be amended by ordinary resolution. 2. Governance and Decision-Making Reforms Committee member duties ⚖️ New statutory duties for committee members Members of committees and sub-committees must now act honestly and in good faith, exercise due care and diligence, act in the interests of the OC, and must not make improper use of their position to gain an advantage for themselves or anyone else. Proxy voting restrictions (“proxy farming”) ⚠️ New limits on proxy accumulation 20 or fewer occupiable lots: a person must not hold proxies for more than one lot owner More than 20 occupiable lots: a person must not hold proxies for more than 5% of lot owners These restrictions do not apply if the lot owners are members of the person’s family, or if other prescribed exceptions apply Voting clarifications Ordinary resolutions: one vote per lot Special and unanimous resolutions: one vote per unit of lot entitlement Voting may be by show of hands, a prescribed manner, or as resolved at the meeting If a lot owner requests a poll before or after a vote on an ordinary resolution, the vote is then based on one vote per unit of lot entitlement (this does not apply to special or unanimous resolutions) If there is a deadlock, the chairperson has a casting vote if they are a lot owner or authorised proxy — the resolution is deemed not to have passed if the chairperson does not exercise that right Interim special resolutions (for inactive OCs) If a matter requires a special resolution but does not achieve the 75% threshold, it is taken to be passed as an interim special resolution if there is a quorum and there are no votes against the matter. Interim resolutions by OC managers An OC manager may pass an interim resolution at a general meeting if no lot owner is present (in person or by proxy). However, the manager must not pass an interim resolution that: Affects their own contract of appointment Involves an amount greater than 10% of the OC’s annual budget The OC may, by ordinary resolution, exclude or alter the manager’s power to make interim resolutions. Common property, water rights, and entry to lots Any water on common property (excluding waterways or bores) is considered part of the common property and may be collected and used by the OC A lot owner must not repair, alter, or maintain common property or a service benefiting more than one lot — unless expressly authorised by the OC as its agent The OC may authorise someone to enter a lot for repairs to common property. VCAT

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Owners Corporation Certificates Explained

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Legal Reference ⏱ 6 min read  ·  Property buyers, lot owners & conveyancers In this article What the Owners Corporation certificate contains — the complete list Who can request a certificate and under which section of the Act How long the OC has to provide it (10 business days) What to look for as a buyer — the red flags that matter most The difference between the Owners Corporation Certificate and the OC’s full financial records ℹ️ The Owners Corporation Certificate is your financial health check on any OC property For buyers, conveyancers, and investors, the Owners Corporation certificate provides a verified, point-in-time snapshot of the OC’s financial position and known issues. It is not optional — it is essential. The owners corporation certificate — also known as a Section 151 certificate — provides a snapshot of the financial and governance status of an owners corporation at the time of issue. What Does the Certificate Contain? Information Why it matters Annual levy for the lot Your ongoing holding cost Any outstanding levies or amounts owing Debts that must be cleared at settlement Maintenance fund balance Indicates financial health and special levy risk Current or pending legal proceedings Potential future costs and disruption Insurance arrangements Confirms compulsory insurance is in place Registered rules Rules you will be bound by as a member OC manager details Who manages the building Building orders or compliance issues Potential rectification costs ⚖️ Section 151 — who can request and the 10-day timeframe A certificate can be requested by a lot owner, a person authorised by the lot owner (e.g. a conveyancer or solicitor), or a mortgagee of a lot. The OC must provide the certificate within 10 business days of the request. What to Look for as a Buyer ⚠️ Red flags on an OC certificate High outstanding levy balances from other lot owners — indicates cash flow problems or poor debt recovery Maintenance fund balance significantly below the 10-year plan target Any current or pending legal proceedings — potential future costs Any outstanding building orders or compliance issues — rectification costs may fall on the OC (and therefore all lot owners) Insurance gaps or inadequate coverage Evidence of a recent or pending special levy 💡 The OC certificate is a snapshot — also request meeting minutes The certificate shows the position at one point in time. Request the last two years’ meeting minutes from the OC manager to understand the history, disputes, planned works, and governance culture of the building. Frequently Asked Questions 💰 How much does a certificate cost? Fees vary between OC managers — typically $150–$300 depending on how quick you need it. Check with the OC manager for the current fee. ⏱️ How long does it take to get a certificate? The OC must provide the certificate within 10 business days of a properly made written request. 📋 Is the certificate legally binding? The certificate is a statement of the information the OC holds at the time of issue. It provides important assurance but is a snapshot — always combine it with additional due diligence. 📋 Key takeaways The OC certificate (Section 151 certificate) is the single most important document for anyone buying into an owners corporation. It must be provided within 10 business days of a written request from a lot owner, their authorised representative, or a mortgagee. Key things to check: outstanding levies, maintenance fund balance, pending legal proceedings, building orders, and upcoming special levies. The certificate is a point-in-time snapshot — also request recent meeting minutes to get the full picture. High outstanding levies from other lot owners, a depleted maintenance fund, and pending legal disputes are the most significant red flags. OC certificateLegal ReferenceSection 151Due diligenceProperty purchase OC OC Resource Centre Victoria’s independent educational resource for lot owners, committee members, and tenants. General information only — not legal advice. Last updated: March 2026.

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Consumer Affairs Victoria and OCs: Their Role Explained

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Legal Reference ⏱ 5 min read  ·  All lot owners & tenants In this article What CAV can do for lot owners and committee members What CAV cannot do — common misconceptions When to contact CAV vs DSCV vs VCAT How to lodge a complaint about a registered OC manager through CAV The register of OC managers maintained by CAV ℹ️ Know which organisation does what Many lot owners contact the wrong organisation for their issue, causing delays. CAV, DSCV, and VCAT all play different roles — understanding which one handles your type of matter saves significant time. Consumer Affairs Victoria (CAV) is a Victorian Government agency that plays a specific but limited role in owners corporation matters. Understanding what CAV can and cannot do ensures you direct your enquiry to the right place. What CAV Can Do Provide general information about OC legislation and lot owner rights Accept and investigate complaints about registered OC managers Maintain the register of registered OC managers (check your manager’s registration status) Provide access to prescribed forms and links to legislation Direct you to appropriate dispute resolution services (DSCV for mediation, VCAT for formal disputes) Provide educational resources about OC matters What CAV Cannot Do ⚠️ CAV’s limitations Mediate individual OC disputes between lot owners or between a lot owner and the OC — that’s the role of the DSCV Provide legal advice about your specific situation Make binding decisions about OC governance matters Override decisions made by your owners corporation Force an OC to take a specific action (only VCAT can do this) The Right Organisation for Each Matter Your issue Where to go first General information about OC rights CAV (consumer.vic.gov.au) Complaint about a registered OC manager CAV Neighbour dispute, noise, parking, pets DSCV (free mediation) OC refusing to maintain common property DSCV then VCAT Unpaid levies (OC recovering from lot owner) VCAT Challenging an OC decision VCAT Retirement village dispute CAV (specialist retirement village team) Frequently Asked Questions 🏛️ Is CAV the same as VCAT? No. CAV is a government agency that provides information and regulates OC managers. VCAT is a tribunal that hears and determines disputes — they are entirely separate bodies. 🤝 Can CAV help me with a dispute with my neighbour? Not directly. CAV can direct you to the DSCV for free mediation or to VCAT for formal dispute resolution, but CAV does not conduct individual dispute mediation. 📋 Key takeaways CAV provides information, regulates registered OC managers, and directs people to the right dispute resolution service. CAV cannot mediate individual disputes, make governance decisions, or force the OC to take specific action. For manager-related complaints: contact CAV. For individual disputes: contact DSCV (free mediation) or VCAT. CAV maintains the register of registered OC managers — useful for verifying your manager’s credentials. CAV is not the same as VCAT — CAV provides information and regulation; VCAT hears and decides disputes. Consumer Affairs VictoriaCAVLegal ReferenceDispute resolutionOC managersComplaints OC OC Resource Centre Victoria’s independent educational resource for lot owners, committee members, and tenants. General information only — not legal advice. Last updated: March 2026.

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OC Records: What Must Be Kept and For How Long?

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Legal Reference ⏱ 6 min read  ·  Committee members & OC managers In this article The comprehensive list of records every OC must keep (Section 144) How long records must be retained — the 7-year general rule Your right as a lot owner to inspect records (Section 146) The OC register — what it contains and why it must be kept current What to do if the OC refuses to give you access to records ⚖️ Section 144 — the complete list of records Every owners corporation must keep: the plan of subdivision, all rules (model and registered), minutes of all meetings, financial records (budgets, levy notices, statements), all contracts and agreements, insurance policies and claims records, all correspondence, maintenance records, the OC register, and any building reports, defect assessments, and compliance certificates. Proper record keeping is a fundamental obligation of every owners corporation. Records provide transparency, accountability, and a historical reference for building management decisions. How Long Must Records Be Kept? Record type Minimum retention General records (meeting minutes, financial records, correspondence) At least 7 years (Section 145) Plan of subdivision Permanently — relevant for the life of the OC OC rules (model and registered) Permanently — must be accessible at all times Insurance policies At least 7 years plus current policy Contracts At least 7 years from expiry Your Right to Inspect Records ⚖️ Section 146 — lot owner access rights Every lot owner has the statutory right to inspect the records of the owners corporation at any reasonable time agreed upon with the OC or its manager. The OC can charge a reasonable fee for providing copies but cannot refuse inspection. ℹ️ What you can inspect All records held by the OC are accessible to lot owners — including meeting minutes, financial statements, contracts, insurance policies, maintenance records, and all correspondence. This includes records going back 7 years. The OC Register Under Section 147, every OC must maintain a register containing the names and addresses of all lot owners, lot numbers and entitlements, and any other information required by the regulations. This register must be kept up to date as lots change ownership — typically the OC manager updates this after receiving notification by a lot owner’s conveyancer once settlement has occurred. Electronic Records Records can be kept in electronic form, provided they are accessible and can be reproduced in written form when required. Cloud-based document management is common and entirely compliant. Frequently Asked Questions 🚫 Can the OC refuse to let me see the records? No. Lot owners have a statutory right to inspect OC records. If access is refused, you can apply to VCAT for an order compelling access. 📄 Can I get copies of the records? Yes. The OC can charge a reasonable fee for providing copies but cannot refuse the copying request. 📋 Key takeaways Under Section 144, the OC must keep the plan of subdivision, rules, meeting minutes, financial records, contracts, insurance policies, correspondence, maintenance records, and the register. Records must generally be kept for at least 7 years (Section 145) — some records like the plan of subdivision should be kept permanently. Lot owners have a statutory right to inspect OC records at any reasonable agreed time (Section 146) — access cannot be refused. The OC can charge a reasonable fee for providing copies but cannot refuse inspection. If access is refused, apply to VCAT for an order — the right to inspect records is legally enforceable. OC recordsLegal ReferenceRecord keepingSection 144Section 146Transparency OC OC Resource Centre Victoria’s independent educational resource for lot owners, committee members, and tenants. General information only — not legal advice. Last updated: March 2026.

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