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Changes affecting the operations of owners corporations from 24 August 2011
There are important changes to the Owners Corporations Act to clarify key points of the law, making them easier to understand for lot owners. The changes came into effect on 24 August 2011.
Delegations
Section 11 allows an owners corporation to delegate its powers. Amendments to the law will mean owners corporations will be able to choose what powers a committee can exercise. If the owners corporation does not make a choice, the committee will automatically get powers to perform its functions.
Owners corporations will not be able to delegate:
- the power of delegation
- any power that requires a unanimous or special resolution
- any power that must be exercised at a general meeting.
Delegations will be able to be made by instrument or resolution, but any delegation by resolution must be recorded in the minutes of the general meeting to be effective.
In addition, the amendments will make it clear that the owners corporation is to be managed by or under the direction of the lot owners. This reflects that the main purpose of an owners corporation is to manage common property that is co-owned by the lot owners.
Service of documents
Section 135 requires absent lot owners to specify an address for the service of notices. Lot owners will be required to record an address in Australia for the service of documents.
If they fail to do so, a notice can be sent to the last known address of the lot owner in Australia, or if that address is not known or the notice is returned, in any other manner the Victorian Civil and Administrative Tribunal (VCAT) considers appropriate.
Standing to resolve owners corporation disputes
Recent decisions handed down by VCAT have restricted the capacity of individual lot owners to apply to the Tribunal to resolve an owners corporation dispute where it is the owners corporation, rather than the lot owner, who will benefit from the resolution of the dispute.
Changes to the law will clarify that lot owners can apply to VCATto resolve an owners corporation dispute on behalf of an owners corporation. Like any other dispute, VCAT will be able to resolve by making any order it considers fair.
However, before applying to VCAT, it is strongly recommended that a lot owner seeking to resolve an owners corporation dispute on behalf of an owners corporation first attempt to have the owners corporation itself (or its committee) resolve the dispute. Otherwise, VCAT might dismiss or stay your application until it knows whether the owners corporation supports the application.
Proxies for committee members
Section 87 allows lot owners to appoint a proxy to represent the lot owner on the comittee. These proxies can be used for two purposes:
-
for a person other than the lot owner to be elected to the committee
-
to allow a person to represent the committee member on the committee if the committee member will be absent (for example, because the lot owner is ill).
One amendment will require notices of committee meetings to advise that a lot owner can appoint a proxy.
In addition, owners corporations can pass a rule restricting any proxy-holder who has not been elected to the committee from voting unless the other members of the committee consent. The rule will mean that the committee can exclude inappropriate people from voting (for example, people with a conflict of interest).
However, to ensure the committee does not act unfairly (for example, by only allowing people holding proxies who hold similar views to the committee to vote), the committee cannot unreasonably withhold consent.
