The new Owners Corporation Act 2006 came into force on 31 December 2007 introducing new powers and functions which are aimed to ensure better management for the increasing number of multi dwelling and multi storey dwellings in the State of Victoria.
An Owners Corporation manages the common property of a residential, commercial, retail, industrial or mixed-use property development.
You are likely to be a member of an Owners Corporation if you own a flat, apartment or unit.
What should I do before buying a property managed by an Owners Corporation?
We suggest that before purchasing a property managed by an Owners Corporation you read thoroughly the Owners Corporation Certificate which will be incorporated as part of the Vendors Section 32 Statement. It is the responsibility of the owner who is selling the property to ensure that the Certificate is available to you before you sign a Contract.
The Certificate and the Owners Corporations Register contain important information about the fees, the allocation of lot liability and lot entitlements for the apartment or unit you are purchasing or any legal liabilities.
You should check:
- The cost of living in the Owners Corporation
- How well the Owners Corporation operates
- The details contained within the Plan of Subdivision – you should check the boundaries of the lot and common property, location of easements and whether the allocation of lot entitlements and liabilities is fair and reasonable
- The contents and conditions within the contract
- The matters contained within the Owners Corporations rules
- Any leases/licences of common property
Lot Entitlements & Lot Liabilities
The lot entitlements and lot liabilities are set out in the plan of subdivision.
“Lot entitlements” refers to your share of ownership of the common property and determines your voting rights.
“Lot Liability” represents the share of Owners Corporation expenses that each lot owner is entitled to pay. These entitlements and liabilities are determined by the developer at the time of subdivision.
Common property includes any parts of the land, buildings and air space that are not lots on the Plan of Subdivision. Common property may include gardens, passages, alleys, pathways, driveways, stairs, lifts, foyers and fences. The common property is collectively owned by the lot owners as tenants in common. Floor coverings and fixtures within a lot are usually the property of the lot owner.