Owners’ Corporation Amendment Act set for debate in the Victorian Upper House


By Tom Bacon - Principal, Strata Title Lawyers

In the first week of February 2021, the Victorian Legislative Council is set to debate and consider passing the amendments to the Owners’ Corporation Act 2006.

For those with a long memory, these were the legislative reforms first proposed in 2013, then repurposed and expanded upon and sent back out for public consultation in 2016, drafted and completed in late 2016 and then left to fester on the shelf for the past four years.

During that long and drawn out phase of eight years while successive Consumer Affairs Ministers have come and gone, Victoria’s skyline has rapidly changed, and the profile of several metropolitan Victorian suburbs have increased in density significantly.

The winners have been the developers, and the burgeoning owners’ corporation (OC) facilities management industry. The losers have overwhelmingly been the owners and residents in these towers.

Since the legislation was drafted and put on the shelf in 2016, we have had several fires in buildings with combustible cladding, prompting a huge government response in the form of the formation of a new entity – Cladding Safety Victoria – tasked with assisting in the removal of all combustible cladding on residential buildings.

We have also had the Supreme Court decision of Balcombe, which severely limited an OC’s ability to enforce rules relating to short-stay operators and the use of residential lots as quasi-hotels.

We have also had the high profile corporate restructuring of high-profile developers , builders and architects, which has left multiple Melbourne buildings facing ruinous debts for building defects.

None of the above major catastrophes made it into the amendments proposed by the new OC legislation. It is simply breathtaking that a government would ignore the obvious lessons of those events, and simply act to dust off a piece of legislation that has been left on the shelf for four years and seek to enact this legislation.

Victorians deserve better. It is simply not good enough to put such a dynamic and fast-growing industry to one side.

Yes, there are some very worthwhile amendments that shall be passed with this legislation. Long overdue and sorely needed. The amendments will go a long way to ensuring that Victorian OCs are built and managed in a way that does not disadvantage owners unduly.

Of course, the only issue is that these reforms were on the table and ready to be passed years ago. What we needed was a well-resourced and informed Consumer Affairs ministry that was prepared to issue amendments and re-writes to keep pace with the industry, so that when parliament finally receives the legislation, it is at least current and up to date.

There is a possibility that The Greens and Independents might support amendments to be made to the OC legislation at the Upper House. What is sorely needed is further reform on short-stay operators. In addition, developers need to be restrained from engaging their mates and related companies to plush management contracts. The threshold for an OC filing legal proceedings in all jurisdictions needs to be reduced to an ordinary resolution. •

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