An Owners Corporation

The OC Act 2006 came into effect on 31 Dec 2007. OC manages the common property of a residential, commercial, retail, ind. or mixed-use development.

An owners corporation must:

•manage and administer the common property

•repair and maintain the common property

•take out and maintain insurance

•raise fees from lot owners; financial obligations

•prepare financial statements and keep records

•provide OC certificates when requested

•keep an OC register

•establish a grievance procedure.

Note: Special rules apply to Two-lot subdivisions, Prescribed OC & Multiple OC.

Owner corporations operate at four levels:

Level 1: The OC (all lot owners) - controls all decision-making; delegates powers (only if unanimous or special resolution is not required); can overturn an earlier decision of the OC; can appoint sub-committees to advise the OC (Sub-committees can’t make decisions).

Level 2: The committee (elected lot owners or lot owners’ proxies) - makes decisions on all matters delegated to it by the OC except on matters that the OC has determined must be decided at an AGM.

Level 3: A delegate of the OC (chairperson, secretary, a committee member, a lot owner, or an employee of the OC) - makes decisions within the limits set by the OC (but cannot overturn a decision of the OC or the committee).

Level 4: A delegate of the committee – (a lot owner, manager or sub delegate to a member of the committee) - makes decisions within the limits set by the OC (cannot overturn a decision of the OC or the committee).

Chairperson, Secretary, Decisions & Vote basis

The Chairperson - an OC committee must elect a chairperson (also becomes the OC chairperson & runs meetings). If the chairperson is not present at a meeting, the lot owners can elect another lot owner or the manager to chair the meeting.

The Secretary - an OC must have a secretary, who is responsible for tasks including managing correspondence and organising meetings.

Decisions – the OC makes a decision when its members vote (meeting or by ballot). Decisions can be made by ordinary, special or unanimous resolutions (each requiring different percentages of the total votes).

Vote basis - votes are based on lots or lot entitlements.

Two-lot subdivisions, Prescribed OC & Multiple OC

Two lot subdivisions are exempt from many of the legal requirements. Prescribed OC - if more than 100 lots, OR if more than $200,000 is collected in annual fees.

In addition to those that apply to all OC, Prescribed OC have additional legal requirements (predominantly with regards to a 10-year maintenance plan, financial statements and buildings valuations every 5 years).

Some developments have Multiple OC to assist lot owners share rights, responsibilities and costs. This is common in subdivisions that have a mix of homes, shops and industry.

Properties with multiple OC will usually have an unlimited OC, which owns the common property, and one or more limited OC, applying to only some lots.

The unlimited OC may also be a prescribed OC.

The unlimited OC can take responsibility for the functions of the other OCs.