Victorian owners corporation legislation
PICA Group is dedicated to helping property stakeholders navigate an evolving landscape by providing the knowledge required to enhance community living. Whether it’s legislation reform about cladding and building standards or general industry updates, you can find key information about Victorian community living here.
This page will introduce you to essential information about community living in Victoria and provide a timeline of legislative changes and announcements.
Owners corporation community living toolkit
Access our toolkit articles and guides:
- What is an owners corporation, and what do they do?
- Selecting an owners corporation manager
- Owners corporation rules to manage your property
- Owners corporation fees explained
- Maintaining and improving common property in an owners corporation and more.
Victorian legislation updates
The timeline below provides summaries of relevant legislative changes that impact Victoria’s community living.
December 2021: New model rules may affect your owners corporation proprety
The update to owners corporation legislation late last year included new model rules that may override your current building rules.
The new model rules cover common community living scenarios, including:
- Smoke drift
- Sustainability items
- Fire safety
- Accessing common property. This one includes, but is not limited to, imposing operating hours on facilities such as gymnasiums and swimming pools.
If you are unclear on how these may affect you, please contact your owners corporation manager.
December 2021: Owners corporations with over 50 lots must have financial records reviewed
According to changes to the Owners Corporations Act 2006, owners corporations with more than 50 lots must now have their financial statements reviewed by an independent person who is a member of, and holds a current practising certificate from, CPA Australia, the Institute of Public Accountants or Chartered Accountants Australia and New Zealand. Previously, the statements only needed to be reviewed by the owners corporation themselves.
A review is a little different from an audit because it costs less and does not involve obtaining third-party documents and selecting and examining invoices at random. However, a review does involve analysing variance to the previous year’s budget and analysing all accounting records and financial statements.
Ultimately, the owners corporation can opt to carry out an audit for peace of mind, even though only a review is required.
1 December 2021: Amendments to the Owners Corporation Act to come into force
Amendments to the Owners Corporation Act 2006 (Vic) were passed by Parliament earlier this year and will come into force on 1 December 2021.
The most important change to understand is that five tiers have been created for owners corporations, with regulatory requirements varying depending on which tier your owners corporation falls under.
- Tier one: more than 100 lots
- Tier two: 51 to 100 lots
- Tier three: 10 to 50 lots
- Tier four: 3 to 9 lots
- Tier five: 2 lots or a services-only owners corporation
While larger owners corporations will need to have their financial statements audited each year, smaller owners corporations may be able to choose whether they want to review their financial statements.
Other important changes include the following:
- Owners corporations will no longer be required to have a common seal
- Owners corporations will be allowed to remove abandoned goods left on common property
- Owners corporations that fall under tier one and two will be required to prepare and approve a maintenance plan and fund
- All owners corporations with 10 or more lots will be required to elect a committee.
- Tier one owners corporations will be required to appoint a manager unless this is decided against by a special resolution
- If no lot owners or proxies are present at a meeting, the owners corporation manager may be able to pass interim resolutions, especially for time-sensitive issues
- Owners corporations will have more authority to direct fees to specific owners, particularly if additional expenses have been incurred because of a lot owner or their use of a lot or common property
- A special resolution will no longer have to be passed to start legal proceedings — this can be done with an ordinary resolution in some instances.
More than 100 changes to renting regulations have been introduced, which aim to make renting fairer and safer in Victoria. The legislative update focuses on the rights and responsibilities of both landlords and renters, and the changes are applicable for every rental agreement’s lifespan.
Key changes impacting owners corporation property owners who rent out their lot include:
- Landlords must inform tenants if the property is on the market for sale or is being repossessed
- Landlords must provide tenants with at least one fee-free option for paying rent
- Renters must be given one free set of keys and security passes
- Landlords can only terminate a rental agreement if they provide a valid reason— they can no longer issue a “no specified reason” notice to vacate
- Landlords must ensure their property meets minimum rental standards. If it doesn’t, the renter can terminate the rental agreement.
The Cladding Safety Victoria Bill 2020 (Vic) (CSV Bill) was introduced to the Victorian Legislative Assembly on 3 September 2020 and given Royal Assent on 4 November 2020. Among its key points is giving homeowners an additional two years (up from 10) to pursue legal action against builders responsible for installing flammable cladding on their properties.
In summary, the CSV Bill will:
- establish Cladding Safety Victoria (CSV) as a separate organisation
- define how CSV will administer the cladding rectification program in Victoria
- extend the limitation period from 10 to 12 years for cladding building actions
- transfer the existing cladding rectification functions from the Victorian Building Authority to CSV.
Victoria saw a new set of occupational health and safety laws come into effect. The new legislation means that an entity or employer convicted of negligently causing death can face a $16.6 million fine while someone convicted as an individual could face 25 years jail time.
Victoria has passed temporary regulation to help mitigate the impacts of COVID-19 on tenants and landlords. The temporary regulations put a moratorium on evictions, facilitate rent relief for eligible tenants, suspend rental increases, and have set up a new and free dispute resolution process. The temporary regulations also change how a tenant or landlord may end a tenancy during the six-month moratorium period.
Consumer Affairs Victoria is encouraging landlords and tenants to come to an agreement where rent reduction is needed. When an agreement cannot be met, they are also encouraging parties to utilise the new mediation service.
19 December 2019: SCA launch building guidelines to help minimise the incidence of defects
The industry body for owners corporation and community living, Strata Community Association (SCA), have launched new guidelines to help protect prospective owners from flammable cladding and major defects. The new guidelines specify that all building plans and lists of materials used, including manufacturer details and warranty information, must be handed over to owners or occupants before the final occupancy permit is issued.
SCA’s Victorian CEO, Maree Davenport, says the guidelines will become “A living document, passed from lot owner to lot owner, on-hand for occupants and committees and successive professional strata managers. It is a tool for compliance and essential safety measures, as well as maintenance and replacement of end-of-life, dangerous and recalled products.”
1 December 2019: New pool and spa registration and inspection requirements for Victoria
Victoria introduced swimming pool and spa safety laws on 1 December 2019. Owners are now required to register swimming pools and spas with local councils. The changes also include ushering in new inspection, maintenance and compliance requirements for properties with pools and spas.
2 August 2019: Cladding Safety Victoria CEO appointed
Dan O’Brien announced as CEO of Cladding Safety Victoria. Mr Obrien will lead the agency as it manages a $600 million-dollar program of rectification works and will make sure buildings comply with all regulations.
18 July 2019: Nation-wide agreement to improve building standards
A landmark agreement is reached at the Building Ministers Forum in Sydney. As a result, the Australian Building Codes Board will be expanded, better resourced and will push for greater engagement from the building industry (ABCB). The ABCB will be responsible for preparing a national framework to impose recommendations from the Shergold Weir Building Confidence report.
16 July 2019: Cladding rectification fund announcement
The Victorian government announces a world-first program to tackle high-risk cladding. The $600 million-dollar cladding rectification fund will fix cladding on at least 500 high-risk buildings. The program will be overseen by Cladding Safety Victoria. The funds will go towards:
- Project management support.
- Professional design services.
- Building surveying.
- Permits and approvals.
- Building materials and rectification works.
29 May 2019: Owners Corporations and Other Acts Amendment Bill exposure draft released
The Bill addresses various technical issues identified by Consumer Affairs Victoria and stands to impact laws that govern the establishment, operation, functions and powers of owners corporations in Victoria. You may share your opinions and feedback regarding the proposed reforms by 29 May 2019 before the Bill gets into parliament.
20 March 2019: Be cautious about CodeMark Certificates of Conformity
CodeMark Certificates of Conformity have been found to have certain limitations regarding for the installation and use of building materials. Recently, nine CodeMark certificates of conformity were withdrawn. If you’re responsible for designing buildings or issuing a building permit for construction, you should make note of any possible limitations, read all certificates carefully and scrutinise the Building Code of Australia requirements being certified by each Certificate.
6 March 2019: Victorian statewide cladding audit
On behalf of the Victorian Government, the Victorian Building Authority (VBA) conducted a statewide cladding audit. The findings were: 1070 buildings identified as having cladding with 500 of those classified as high risk.