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We Live Here - June 2019

29 May 2019

Bill defects need to be fixed

As we sifted through the exposure draft of the Owners Corporations and Other Acts Amendments Bill released by Consumer Affairs Victoria (CAV) we found quite a few issues.

We Live Here has submitted a response to CAV. In it we have detailed substantial deficiencies in the Bill that need to be resolved.

Tiers of owners corporations' – excluded clauses

The new legislation will allow for different regulatory requirements based on the number of occupiable lots.

We Live Here has campaigned for this since the review of the legislation commenced in 2016 so at first we were very pleased. But we do have issues is in the way it is being implemented.

Put simply: there will be four tiers: two lots, three to nine lots, 10 to 50 lots and over 50 lots.

In other jurisdictions internationally, the tiers have dedicated legislation – a far superior approach. This Bill has a cumbersome, prose-expressed list of exclusions that will confuse the average citizen and delight the legal profession with its complexity.

“Mates” contract reforms must also apply to building managers and must be retrospective

One long-overdue reform is to prohibit onerous and unfair terms in owners’ corporation (OC) management contracts and gives more power to the Victorian Civil and Administrative Tribunal (VCAT) to rule generally whether other terms in OC management contracts are unfair. Some terms slated to be banned are those that:

Impose procedural restrictions on the revocation of the manager’s appointment;

Enable the manager to renew the contract of appointment at their option;

Provide for the automatic renewal of the contract of appointment if the OC fails to give notice of its intention not to renew the contract, and

Must not restrict the ability of an OC to refuse consent to the assignment of the contract of appointment to a person appointed as the manager, other than one which provides that such consent, must not be unreasonably withheld.

These proposed reforms in the Bill only apply to OC manager contracts. Unfair contracts for building management are not addressed!

Tens of thousands of Victorians need relief from blatantly immoral building manager contracts with obscene, irrevocable terms of up to 25 years.

We Live Here will be lobbying to ensure that sensible prohibitions on contracts will also apply to building manager and facilities manager contracts and will be retrospective.

Damage caused by short stays must be addressed

Neither this OC reform Bill nor the so-called Airbnb Bill already enacted, protect high-rise owners and occupiers from a range of property damage issues.

A high-profile case in Docklands right now started with a short-stay party booking and led to calamitous damage to at least five floors.

A large party was held in a luxury penthouse with a sauna being used for an extended period, ultimately causing the fire sprinklers to flood the party apartment and several floors below.

Now, if there are two more floods caused by the same short-stay apartment within two years, the reformed Bill will entitle the hapless residents who have been flooded to the grand sum of $2000. And who pays? The Bill says the “short-stay provider”.

Moreover, the affected occupier would have to take action “within 60 days of the breach” but the occupier will not be entitled to a single cent unless the identical breach happens three times in two years. This means that there must be three identical incidents in 60 days for an affected occupier to qualify for a paltry $2000 in damages.

The whole philosophy is upside-down. There is no prevention strategy, it is all about forcing disaffected parties to take arduous legal action for the slim prospect of a tiny sum of money.

Another “Bazinga” clause gives short-stay operators a get-out-of-jail-free card. All a short-stay business operator needs to do is provide the invited guests with a copy of the OC rules – and just like magic – no more liability! Everything becomes the guest’s fault. Then anyone affected only has the option to chase the tourist who just flew back to the other side of the world!

How did these deficiencies arise?

A lot of legislative “experts” have invested countless hours drafting this Bill – so how did it get to this stage with these deficiencies?

We believe the initial consultation period in 2015 to 2016 was flawed. Who was consulted? Developers? Strata managers? Airbnb? One thing is certain: representatives of owners and residents were not consulted properly.

What’s next with the draft Bill?

We have submitted our concerns to the CAV in the interest of all Victorians living in strata developments.

The Bill is expected to be introduced into Parliament later this year, subject to satisfactory resolution of issues raised during this latest consultation period.

Retirement of Shane Scanlan

We Live Here would like to say a big thank you to editor Shane Scanlan for providing a voice for owners and residents living in high-rise communities, through our monthly columns in the three local newspapers which commenced from the time we launched almost three-and-a-half years ago.

All the very best Shane, we hope there are lots of exciting, new adventures ahead.

 

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