By: Andrew Brennan, James Kefford and Allana McGrath

Background

The Victorian Government recently released its response to the Expert Panel Statutory Review of the Owners Corporations Act 2006 (Vic) (OC Act).

The review and response come at a time when the importance of the owners corporation sector is rapidly increasing. Around one in five Victorians are currently living in or owning property governed by an owners corporation, and this figure will inevitably increase given planned continued higher density urban development.

A copy of the review can be found here.

Key findings of the Government review

In summary, the Government review:

  • stated its commitment to modernising the OC Act to strengthen consumer protections, improve transparency and accountability, and better support lot owners, residents and industry participants;
  • broadly supports the direction of reform proposed by the Expert Panel, backing the majority of the 51 recommendations contained in the review either in full, in part or in principle;
  • supports reform that would see a shift towards a more proactive and interventionist regulatory framework, including by:
    • expanding the powers of Consumer Affairs Victoria,
    • introducing a licensing regime for owners corporation managers; and
    • enhancing enforcement mechanisms to move away from the current reliance on private dispute resolution;
  • has a key theme throughout of improving governance, transparency and professionalism within the owners corporation sector, with proposed reforms focusing on:
    • clearer duties and accountability for developers and managers,
    • better access to information for lot owners,
    • stronger record keeping obligations, and
    • enhanced education regimes for committee members and lot owners; and
  • proposed reforms dealing with emerging and practical issues such as sustainability, financial hardship, short-stay accommodation and fairer voting processes within owners corporations.

What happens next

While the response signals significant reform is on the agenda, much of the detail remains to be developed through further consultation and legislative amendment. Several recommendations are supported in principle only, reflecting the need for additional policy work, impact analysis and resourcing consideration.

Accordingly, whilst the response provides a clear insight into the likely regulatory change, it suggests further work needs to be done before the implementation of what is likely to be the most substantial overhaul of the owners corporation regulatory framework in Victoria for many years.

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