VCAT ruling limits OCs’ ability to manage their buildings

A recent tribunal ruling has sparked widespread concern among apartment owners, after it effectively stripped owners’ corporations (OCs) of their ability to take disputes to the Victorian Civil and Administrative Tribunal (VCAT) without first securing a supermajority.

The legal precedent, set by VCAT deputy president Teresa Bisucci, means OCs must now achieve a 75 per cent vote from all lot owners for non-monetary actions, including compelling a neighbour to stop nuisance activities or behaviour, or demanding documents.

Owners’ Corporation Network (OCN) director and Docklands resident Dr Janette Corcoran said the ruling had “significantly limited” the ability of OCs to manage their buildings and maintain liveability.

“It creates uncertainty for both residents and committees and undermines confidence in the management of shared living environments,” Dr Corcoran said. “This highlights the urgent need for clearer and more consistent oversight of strata governance.”

OCN is advocating for a Strata Commissioner for Victoria – a role that already exists in New South Wales and Queensland – to provide independent oversight and prevent such unintended consequences.

Dr Corcoran said the decision did not favour residents, arguing it weakened the ability of communities to uphold agreed standards.

“It’s hard to see how residents benefit when rules that everyone accepted before moving in can no longer be enforced,” she said. “This arguably favours those who wish to breach rules, often at the expense of their neighbours’ amenity.”

Most residents reasonably expect quiet enjoyment of their homes – this decision weakens that shared expectation.

A Strata industry campaigner named Rocco said the ruling had already caused serious confusion and distress for apartment communities trying to manage short-term letting.

“Our building went through the lengthy and expensive process of achieving a 75 per cent vote to ban Airbnb and similar short-term rentals,” Mr Sorace said. “Now we’re being told we need another 75 per cent vote just to enforce the same rule through VCAT. It’s unjust and unworkable.”

Rocco said his building had spent more than $100,000 in legal fees and four years of effort to reach the original agreement.

“Residents deserve the right to protect their homes, privacy and safety without facing endless procedural hurdles,” he said. “We’re asking the government to clarify the law so that one special resolution is enough to both implement and enforce a ban.”

A Victorian Government spokesperson said reforms introduced in 2021 were designed to modernise strata governance, and that an independent review was already under way.

“We made significant reforms in 2021 to better reflect the needs of Victorians living in apartments and other properties administered by owners’ corporations,” the spokesperson said.

“We’ve commissioned an independent expert panel to review the Owners Corporation Act to ensure the legislation is fair, efficient and in the interests of lot owners and residents.”

The panel, chaired by former minister Marsha Thomson alongside Karen Chester and David McKenzie, is consulting with strata communities across Victoria and will deliver its recommendations to the Minister for Consumer Affairs by December 2025. •