When a building is subdivided into a number of ‘lots’, a body is established to collectively manage the building. That body is known as the owners corporation (in Victoria it was formerly called the body corporate). Owners corporations are registered at the Titles Office, and are a legal entity.
What is an owners corporation?
Owners corporations consist of all the individual lot owners in a strata property: if you own a lot in a strata property, you automatically become a member of the owners corporation.
Strata properties can be apartment buildings, townhouse complexes, commercial, retail, industrial or mixed-use properties.
The owners corporation is responsible for managing, administering, repairing and maintaining all the common property.
Common property includes shared gardens, driveways, stairwells, hallways, walls, lifts and fences.
All Owners Corporations must:
- Have a common seal,
- Conduct meetings of its members,
- Have an address for receiving correspondence,
- Take out and maintain insurance,
- Raise fees from lot owners to cover all financial obligations,
- Establish a grievance procedure,
- Keep records, and
- Prepare financial statements.
All decisions made by owners corporations must be voted upon by the owners corporation.
Votes are based per lot, so for example, if two people own one lot, they get half a vote each, or one vote total for their lot.
If one person owns two lots, they have two votes.
What is the owners corporation committee?
The owners corporation committee consists of the elected representatives of the owners corporation.
Owners corporations usually have between three and 12 members who are usually elected at the annual general meeting (AGM).
An owners corporation committee usually consists of:
- A chairperson – who runs meetings in a way that encourages decisions,
- A treasurer, and
- A secretary – who manages correspondence and organises meetings.
All owners corporations and committees must:
- Act honestly,
- Exercise due care in carrying out their functions, and
- Not use their position improperly to gain an advantage for themselves or any other person.
What is the role of the strata manager?
A strata manager, or owners corporation manager, is responsible for coordinating the owners corporation. Strata managers help with:
- organising owners corporation meetings,
- recommending contractors,
- keeping records,
- advising owners on legislation, and
- mediating relationships between the owners.