Towers and the Owners Corporations Act 2006
The OC Act covers the law and governance for tower buildings but also for medium-rise, town houses (one to three stories in height), and mixed-use buildings.3 The common element for all owners corporation developments is that individual lots are owned together with a share in the common property. The legal entity of the owners corporation comes into being when the plan of subdivision for the development is registered at land registry, whereby the owners corporation is assigned a unique number. Lot ownership is accompanied by liability for the common property areas and facilities. The main purpose of the legislation is to establish the management, powers, and functions of owners corporations and to provide for appropriate mechanisms for the resolution of disputes relating to owners corporations. The OC Act also provides a road map for the governance of the owners corporation, including its functions, operation, decision-making, committee management, maintenance, and amending the subdivision.
Powers and functions of owners corporations and the dispute settlement process
The OC is under a duty to ensure the development is run effectively and in a transparent fashion. At the heart of this governance structure is the requirement for a functional committee (or “board of directors”) that oversees day-to-day operations of the building. As committees comprise owner volunteers (typically owneroccupiers), the dynamics can be pleasant or tense, and the relationships in the committee can be highly fluid. Some committee members may have prior experience sitting on company boards and expertise in taking minutes. Others may be players of less experience, which creates other challenges, particularly for those unfamiliar with meeting governance structures (Liu et al. 2018).
The OC Act carries a robust dispute resolution process, which strives to addr ess disputes internally between unit owners/occupiers as well as between the OC and service providers. The process for dispute settlement requires the OC to provide the other party with a grievance notice, and if not resolved, there is an opportunity
Living with strata towers 119 for external alternative dispute resolution via Consumer Affairs Victoria. Should negotiation or mediation be unsuccessful, the matter may be taken to the Tribunal for final determination. As there is no land and environment court in Victoria, it is the Tribunal which has a dedicated jurisdictional stream (list) for owners corporation disputes (Douglas, Leshinsky. and Condliffe 2016; VCAT 2020). The Tribunal deals with the late payment of annual OC levies and determines all disputes which relate to common property areas, such as when as owner has left personal belongings on the common property. There is an appeal process to the Supreme Court from the Tribunal, but this is only available on a question of law. To provide a sense of the prevalence of issues, during the 2018-2019 financial year, the Tribunal determined 3,245 disputes, making it one of the busiest Tribunal lists (VCAT 2019).