24 Feb OC rules are changing. Here is what you need to know
Do you sit on an owners corporation (OC) committee? … or maybe you have done so in the past. (OCs were formerly known as a body corporates in Vic)
OC committees can run very smoothly and manage the operations of an apartment building effectively or they can be totally dysfunctional and break down requiring lawyers to try and sort it out. Obviously the OC Manager who is appointed by the committee play a critical role in this.
Being an OC committee member can be a thankless task and it could be argued that having 6 or 7 owners (or their representatives) charged with the responsibility of making decisions on behalf of all the other apartment owners (albeit regulated) is a flawed structure. However I don’t have a better idea and no doubt smarter minds have debated other options.
When an apartment building is first built the developer is required to establish the OC which includes appointing the OC manager as well as many other building services including things like a facility manager, leases and licenses of common property, and other service providers. On occasion there have been instances of the developer setting up long term contracts with these providers that not only binds the future OC to these providers but enables that developer to profit from selling these contracts. This issue has been the subject of much consternation and court cases trying to unpick the contracts but in most instances all agreements are set up correctly and in good faith.
Last week the OC and Other Acts Amendment Bill 2019 passed through Victorian Government which following Royal Assent will come into force on 1st December 2021. The details were well summarised by Lawyers Tisher Liner FC Law in a Legal update here. There were many items covered but in relation to the above issue TLFC state “developers will be restricted in engaging managers and entering into contracts at the first annual general meeting. Contracts can only be entered into for a maximum period of 3 years…”.
The efficient operation of an OC is integral to a successful apartment building. If it is run well people enjoy living in the building and the capital value of apartments is enhanced. When buying an apartment it is a good idea to ensure the OC is well run and managed.