Proposed Owners’ Corporation Act reforms need to move quickly

Melbourne is a world-class city. It hosts big international sporting and cultural events. It has a bustling tourism industry, excellent shopping and award-winning cuisine, late-night cocktail and whisky bars, theatres and a thriving CBD.

The people who live in Melbourne do great things in their working lives – raising families, saving lives, educating our young people, building towers, bridges, railways, designing computer systems, trading stocks and options.

They live a fast-paced life, and don’t have much time to wait around for too long. Everything needs to be instant these days. Fast internet, mobile phones, tap and-go eftpos for your morning coffee, Hello Fresh deliveries, trams every four minutes. The list goes on.

Yet for those who live in apartment buildings the legislation that governs the operation and administration of an owners’ corporation (OC) is so slow and antiquated, that it’s no wonder that more and more apartments are becoming vacant and more and more owner occupiers are moving out.

Firstly, why bother turning up to the building’s annual general meeting (AGM)? To get a quorum, more than half of the building has to attend. In larger buildings, that almost always never happens.

Then, every decision made at the AGM has to stand over in a moratorium for a period of 29 days before it can be acted upon. How can that be? Why does everything in a building need to stop for a whole month? Levies can’t be sent out, new contracts can’t be signed, the new committee can’t meet and start making decisions.

This doesn’t exist elsewhere in Australia. It’s a quirk of Victoria to enshrine this “caretaker period” in the legislation.

The good news is, it’s a quick and easy fix for the government to make as part of its OC legislative review (currently underway). The solution – the quorum is now deemed to be all the people that bother to show up the meeting (or vote electronically or give a proxy to someone else). Simple. Clean. Quick.

Secondly, there’s never any snowball’s chance in passing special resolutions in larger buildings. Getting more than half the building to vote on changing a rule or using the maintenance fund to pay for repairs and maintenance or agreeing to fund a building defects claim shouldn’t be so hard.

But when more than 21 per cent of apartments in Victoria are vacant and another 45 per cent are rented (source – the 2023 Census) it’s exceedingly difficult to get owners to respond to ballots to get even half of the building to participate in the special resolution motion.

The answer – redefine “special resolution” to comprise the votes of the lot owners that actually bother to participate in the vote. That’s how the system works in New South Wales, and it’s been in operation since 1973.

That’s just two simple legislative changes to get apartment buildings moving and OCs transacting their business quicker. There are dozens more. In next month’s column, we’ll touch on some other proposed reforms. •