Developers and Owners Corporation Managers in the Spotlight – Proposed Law Change.
Developers and Owners Corporation Managers in the Spotlight in Proposed Changes to Owners Corporation Legislation
Changes to the laws that govern owners corporations in Victoria are currently being considered in the form of the Consumer Affairs Legislation Further Amendment Bill 2014. The proposed changes will have significant implications for developers and owners corporation managers across Victoria. A brief summary of some of the proposed changes is below:
- Extending the statutory obligation on developers with majority voting entitlements to act honestly, in good faith and with due care and diligence in the interests of the Owners Corporation whilst exercising rights and functions under the Owners Corporations Act 2006 from 5 years to 10 years.
- Imposing restrictions on management contracts including:
- 3-year maximum term (subject to regulations);
- Prohibitions on restricting owners corporation’s available methods for revoking manager’s appointment; and
- Contractual roll-over periods only to be on a monthly basis or shorter.
- Imposing express obligations on managers to obtain goods and services at competitive prices and on competitive terms and to make express written disclosure of certain beneficial relationships with suppliers that the manager is aware of.
- Imposing obligations on managers to keep separate bank accounts for trust monies held on behalf of separate owners corporations and giving owners corporations the right to request bank statements for such accounts for up to three years (exemptions may apply).
- Imposing obligations on managers to report to owners corporations on professional indemnity insurance, receipts and disbursements of trust monies, commissions, payments or other benefits received by the manager in relation to contracts for goods and services supplied to the owners corporation.
- Clarifying that VCAT has the power to determine disputes regarding management contracts.
- Restricting who can become or remain an owners corporation manager.
Tisher Liner FC Law has a dedicated Owners Corporation Law division committed to providing quality legal advice and representation to Owners Corporations, Committees, Lot Owners and Managers.
