A legal labyrinth
Navigating the legislative changes affecting owners’ corporations (OCs) over the past four years is quite a challenge. We offer this thread to help you through the maze:
The Owners’ Corporations Act 2006 has had two acts incorporated:
- Owners Corporations and Other Acts Amendment Act No 4 2021 – a range of welcome reforms with noticeable omissions.
- The unreviewed Short Stay Accommodation Act 2018 – the so-called “Airbnb party bill”. This Act was supposed to be reviewed in 2020 and the review is now scheduled “between 2023 and 2027”. This Act has been treated as an amendment, despite its standalone name.
If you want to find the latest version of the Owners Corporations Act 2006, search for the “Authorised version 019”, dated December 1, 2021. This version has annotations showing where the amendments have been made.
We Live Here has ongoing dialogue with Consumer Affairs Victoria, which is part of the Department of Justice and Community Safety. In our most recent meeting, we learned that the proposed review of the Owners’ Corporations Act 2006 during the term of the next government would cover both acts that were incorporated into the Act.
Short-stay accommodation was excluded from the 2014 review of the Act because of planning issues. Have these issues been resolved to allow a simultaneous review of both acts? We certainly hope so, because the current legislation is far from workable.
The short-stay legislation has been tested twice recently – sadly the plaintiff residents struggled to prosecute the most fundamental types of claims against commercial short-stay interests.
In both cases the VCAT member sided with the short-stay operators.
- In the first case, the OC recognised that the VCAT member’s expressed sentiments did not bode well. The OC quietly negotiated a compromise settlement for the damage done to their building.
- In the second case, which was also lost, the OC was left frustrated and fuming because the law requiring three consecutive breaches was prohibitive.
After four years of so-called short-stay party laws, the number of VCAT orders we can find in favour of residents is still zero. If you know of any exceptions, please let us know.
Turning to the positives, the 2021 amendments introduced some long-overdue reforms to resolve unfair practices in the appointment of OC managers.
The reforms limit the common practice of apartment developers awarding long-term OC managers contracts to associates. The legislation targets these ball-and-chain contracts, limiting terms and outlawing clauses that require a special resolution to remove a manager. We Live Here applauds the overall reforms – they are closely aligned with the recommendations we have made for several years.
Regretfully, there was a huge oversight in these reforms; similar principles should apply to all contracts, particularly building or facilities management. There are some inner-city apartment buildings whose committees are burdened with one-sided, irrevocable facilities management contracts, for 20 years or more. The excessive tenure of these contracts can breed contempt and disrespect for committee members and owners. The government must regulate these contracts with the same type of reforms that apply now to OC manager contracts.
Builder’s roadblock: residents turn to the council
Residents at a La Trobe St apartment building are furious over a neighbouring builder’s plan to create traffic chaos for at least four years.
The builder has reached stage 2 of a twin tower project. Rather than use the vicinity of its first tower for stage 2 construction traffic management, the builder plans to endanger and distress hundreds of neighbouring residents.
The affected OC has contacted We Live Here, hoping we can help.
The OC has already put its case to Lord Mayor Sally Capp, Deputy Lord Mayor Nicholas Reece, and councillors Rohan Leppert and Davydd Griffiths:
The OC said, “To date, there has been zero community consultation and so we are contacting [the council] directly. We have already contacted the site services of the Melbourne City Council, which has repeatedly referred us to [the builder], and when we have contacted [the builder], they have refused to engage with us in any meaningful way or respond to our genuine questions and queries.”
This case highlights problems at intersection of the state and municipal tiers of government:
- severe deficiencies in the building approval process, in this case overseen by the former Minister for Planning Richard Wynne.
- flawed traffic management processes – the responsibility of the City of Melbourne, although the council does not have an active role in the implementation.
We Live Here suggests that any residential building that could be affected by a new development must be consulted in the early planning stages so that proactive measures can be taken to ensure resident safety, minimise noise and preserve amenity.
The La Trobe St residents in this matter should not have been placed in this intolerable position.
An OC recovers
We have been following a long-running resident challenge to a developer-dominated OC. Nerida Pohl has this update:
“After amended laws enabled fresh new candidates to be elected, residents have complimented the obvious changes.
- The previous committee members (three of the committee of five) removed their real estate agency from our residential lounge, which can be enjoyed now by all residents.
- After the cleaning company of the members was replaced, we now can instruct our cleaners independently.
- We have sub-committees working on freshening the landscape, energy and waste reduction issues, pool and gym upgrades, management of short-stay visitors.
- A lawyer is representing the committee against the forces of the shopping plaza, which still tries to keep us out of our private undercover loading dock and goods lift.
- We are optimistic going into the new year that we can put all this behind us.”
We Live Here is delighted to hear there has been positive progress – a vindication of the stoic determination of Nerida and fellow residents to fight for a representative and productive committee.
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