Owners corporations are in charge of $300 million of Melbourne property and $1 billion in annual transactions in this state alone, according to the Real Estate Institute of Victoria (REIV). That's why it's so alarming to hear horror stories about the mismanagement of funds, and overpayment from residents.
The vast majority of owners corporations run smoothly and can be trusted entirely. However, in an effort to further improve the standard in Melbourne and surrounding areas, the state government is undertaking a comprehensive review of the Owners' Corporation Act.
Here's what you need to know.
What does the review focus on?
The consumer property law review is a comprehensive analysis of four pieces of property legislation in Victoria. The review of the Owners's Corporation act will focus on the following:
- The appropriate length of management contracts;
- Unfair terms in management contracts;
- Managers' fees;
- Managers' conflicts of interest;
- Managers' conduct;
- Managers' record keeping; and
- Unsuitable managers.
As you can see, there's a clear focus on improving the quality and reliability of the managers in charge of buildings. The REIV has contributed to discussion, suggesting improvements to professionalism within the industry by reforming licensing requirements and training standards.
They've also pushed for a range of other reforms, which advocate for those in the industry. These include: introducing mandatory maintenance plans for all owners' corporations, regardless of size, improving owners' corporations ability to recover debts and lifting of eligibility requirements for managers – which exclude persons convicted of serious criminal offenses punishable by imprisonment.
What does this mean for you?
These laws will make owners corporations and their managers, more transparent, productive, efficient and accountable.
As the reform is still under review it's impossible to know what the specific details of changes will be. However, it's certain that the way owners corporations are managed will change for the better.
Expect the reform to crack down on overcharging of owners, and put stricter rules on managers to ensure their conduct is always above board.
Overall, these laws should make owners corporations and their managers more transparent, productive, efficient and accountable.
When can we expect results?
Submissions from the public closed on 16 December last year, and the reform is still under review so it's difficult to know when exactly any changes will come into effect. Despite that, if nothing major delays the reforms we can expect them to come into action in the next few years.
Those who live in a Melbourne apartment now, or are considering buying should watch its progress keenly, as their every day lives will no doubt be affected when the laws pass.