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BODY CORPORATE - NOW OWNERS CORPORATION
Tuesday, January 15, 2008
WHAT’S IN A NAME? A lot more than what used to be…….
Victorian Bodies Corporate has been operating under outdated and inadequate Regulations for the past five years after the last revision to the Subdivision Act in mid-2001. Since that time, we have seen the industry grow from small strata plans of 6-10 units into high rise, high density, multiple plans of subdivision with complicated workings and million dollar budgets.
Currently in Victoria there is over 65,000 bodies corporate, representing one in four Victorians who own or occupy in this changing landscape. MICM Property has long led the way in its innovative approach to Body Corporate Management and is set to establish itself as a market leader in the new world of Owners Corporations.
After two years of public and private review and a multitude of consultations, the Victorian Parliament passed the new Owners Corporation Act 2006 in September last year. This new regulatory regime aims to improve transparency, improve communication and standardize accountability within the industry. As a result of this legislation, amendments have also been made to the Subdivision Act, Sale of Land Act, VCAT Act and Business Licensing Authority Act, just to name a few. The Regulations 2007 are yet to be finalized by Consumer Affairs Victoria but all legislation is to become affective on 31 December 2007.
The major changes can be summarized as follows:
Ø Name change from Body Corporate to Owners Corporation – more accurately reflecting the composition of members within a plan of subdivision and the ownership therein;
Ø Clarification of Roles and Responsibilities – creating greater duties, functions, powers and responsibilities for the management of common property while establishing greater tiered requirements for the operations;
Ø Improved financial protection for members funds – allows for greater flexibility and accountability in setting fees, collecting and disbursing of Members funds, provides for Penalty Interest on arrears and sets auditing standards;
Ø Transparency in collecting, keeping and disbursing information – enables rights of access to records and stipulates what records must be maintained;
Ø Recognition of Long Term Maintenance Plans - provides a framework for the establishment of 10 year plans to cover major capital items of repair and replacement;
Ø Providing an avenue for Dispute Resolution – opens up the communication network between owners, occupiers and managers and provides links into Consumer Affairs Victoria and VCAT
Underpinning all of these legislative changes is an established code of conduct and ethics when dealing will all Owners Corporation matters. For the first time, Developers have mandated responsibilities when establishing the plan and initiating Contracts and Agreements for the property. Managers must now be registered and Committee Members cannot be in arrears hen exercising their duties and responsibilities to the Owners Corporation. The Fair Trading Act 1999 applies under numerous sections of the new Act and all parties are mandated to act in good faith, honestly, exercise due care and diligence.
The changes are too numerous to cover in this article and MICM Property Owners Corporation Managers will be working with Members and Committees throughout the year to ensure compliance, establish best practice protocols and continue to value add to Owners Corporation in inner city Melbourne.
MICM is the leading and largest inner city property specialist. The MICM Owners Corporate Managers sector manages a large proportion of inner city residential buildings in Melbourne including many high rise apartments.
For more information regarding this article and interviews, please contact MICM’s Owners Corporation Manager,
- Dorothy LeClaire