Legislation for Westvic Strata management

Significant Changes to Owners Corporation Act from 1st Dec 2021

Are you a self managed Owners Corporation – is it time for professional management?

There is no legal requirement for an Owners Corporation (OC) in Victoria to engage the services of a professional strata management company and as a result, many smaller OC’s choose to be self-managed, where all management is done directly by the owners or perhaps more accurately usually carried out by just one of the owners.

Whilst in most cases self-managed plans are managed well, there are many that are not where basic obligations and compliance requirements have simply not been met – and your investment is at risk!

Examples could be inadequate insurance (or in worse cases no insurance), levy payments not being made without adequate debt recovery processes, poor maintenance of common property, inadequate recording of meeting minutes etc.

At WestVic Strata we wonder why some owners choose to self-manage when there is an opportunity to engage a professional strata management company for a relatively small fee who will do all the stressful work for them?

So, what are some of the looming legislation changes as well as some of the important basics?

Changes to Insurance

The Owners Corporation Act has always stated in Section 54 that the Owners Corporation must insure ‘any building on the plan of subdivision’. From 1st December 2021 it will be possible for individual owners to choose to take out insurance on standalone units BUT only if ALL owners agree by a unanimous vote.

If there is no agreement, then the current arrangement remains where the Owners Corporation collectively takes out the insurance.

Now, we have heard examples of owners that have made a ‘local agreement’ to take out their own insurance and ‘not worry about the Owners Corporation’ however if that is the case, and one of the units is not covered and suffers a significant claim, are you aware that the Owners Corporation is then collectively responsible for the claim and it will only take a smart lawyer or accountant to bring this to the attention of the irresponsible lot owner who did not take out insurance to make you all pay.

So, if you do decide to self-insure, please make sure that you document the agreement that all lot owners must agree and make sure that they all do!

Another significant change to The Act is that all Owners Corporations of three lots or more MUST have an insurance valuation carried out at least once in every five years and the sum insured of the buildings must reflect the valuation. This is not a ‘nice to have’ but is a legal requirement and I imagine this will be one of the first documents an insurance company will insist on sighting in the case of a significant claim.

Is all the above worth the risk to be self-managed and not engage a professional manager for an average cost of about 60 cents per lot owner per day?

Changes to Owners Corporation Committees

The new amendments to the Act include a change to the structure of committees.

Previously an Owners Corporation of more than 13 lots had to elect a committee but this will now change to 10 lots. Further the number of committee members has been reduced from 12 to 7 (although you can appoint 12 by a Special Resolution)

There is no requirement for Owners Corporation of 9 lots or less to form a committee.


  • 9 lots or under has no requirement for a committee
  • 10 lots or more must elect a committee

9 lots and under without a committee may look relatively easy, however it can be a time-consuming job, and the onus is usually on one or two owners to make all the decisions and assume all the responsibilities as defined in the Owners Corporation Act. Further, some of those decisions made, without the knowledge or input of all owners, can later be criticised by some lot owners.

10 lots and above brings a higher level of compliance as a committee MUST be formed and further the Act is quite specific on the way a committee is to function and report.

Is any of above worth the risk of being self-managed and not engage a professional manager, as a resource and guidance, for an average cost of about 60 cents per lot owner per day?

Changes to levies debt recovery

Collection of levies from fellow lot owners may sound like a simple job, and when everyone pays on time it works well, however recalcitrant fellow lot owners, who don’t pay, can become a real problem for self-managed schemes.

At WestVic Strata we offer many levy payment schemes and can tailor a payment plan to suit the individual, however in the instances of non-payment we have a proven debt recovery system to make sure that all owners contribute fairly to the budget.

The amendments to the Act that come into force 1st December 2021 allow for cost recovery from lot owners through VCAT as well as changes to the launching of legal action to recover debts.

And surely having a professional manager chasing debt is a far better solution than having it carried out by a voluntary office bearer.

Is any of above worth the risk to be self-managed and not engage a professional manager for an average cost of about 60 cents per lot owner per day?

Some of the other changes

We encourage you to research the significance of other changes including

  • Use of the Common Seal
  • Changes to resolutions regarding legal action taken out by an Owners Corporation
  • Additional measures to recover insurance premium increases caused by certain insurance claims lodged by individual lot owners that effect the overall premium
  • Audit requirements
  • Financial records to be prepared in accordance with Australian Accounting Standards for 10 lot and more Owners Corporations
  • Changes to the number of proxies an individual can hold for Owners Corporations meetings
  • New powers to dispose of abandoned goods on common property
  • Recovery of costs to repair damage to common property caused by a lot owner


So, is it better to be self-managed or managed by a strata management company?

If you have time and knowledge to pull-off being self-managed, you can certainly enjoy some benefits such as reduced cost, more flexibility and faster decision-making process. But there are a lot of traps too and removing all this unnecessary stress for a small fee by being managed by an Owners Corporation industry specialist may certainly be worth it.

Why not contact us for a no obligation audit of your procedures – we will be more than happy to meet with you.

Rob Harris – phone 0418 977 783 or email admin@westvicstrata.com.au