Mr Chen bought an apartment in Melbourne's CBD and, six months after moving in, received a ‘special levy’ of several thousand dollars to replace the building's external waterproofing. He was puzzled – no one had told him when he bought. In fact, this kind of information can often be spotted before purchase in the owners corporation certificate and meeting minutes.
At a glance
- Owners of subdivided property (apartments, units and some townhouses) automatically become members of the owners corporation (formerly called the body corporate).
- Owners corporations are governed by the Owners Corporations Act 2006 (Vic), which was substantially amended in December 2021.
- Annual fees are generally set at the annual general meeting; major works may require a special levy.
- An owners corporation can make rules by special resolution, and since 1 January 2025 it can ban short stays in lots that are not someone's principal residence.
- Before buying, read the owners corporation certificate carefully – it forms part of the Section 32.
Fees and special levies
The owners corporation is a legal entity responsible for managing and maintaining the common property – such as the lobby, corridors, lifts, roof, facade and car park entry – and for insuring the building. Day-to-day matters are usually handled by a committee elected by the owners and a professional owners corporation manager. Every owner is entitled to attend meetings, vote and inspect the owners corporation's records.
The owners corporation must raise money for insurance, cleaning, repairs, lifts, gardens and management of common property. The annual budget and fees are usually approved at the annual general meeting and shared according to each lot's ‘lot liability’. Larger owners corporations must also have a maintenance plan and maintenance fund to save for future major works.
If the maintenance fund cannot cover sudden or major works, the owners corporation can charge a special levy. Where an owner falls behind, the owners corporation can charge interest and apply to the Victorian Civil and Administrative Tribunal (VCAT) to recover the debt. Even if you dispute an item of spending, it is generally unwise to simply stop paying; raise it through the owners corporation's processes instead.
Rules and short stays
If the owners corporation has not made its own rules, the statutory model rules apply, covering matters such as noise, pets, parking, rubbish, renovations and changes to appearance. The owners corporation can make or amend rules by special resolution (generally requiring 75% support), and rules must be registered with Land Use Victoria to take effect.
On short stays, under the Short Stay Levy Act 2024, since 1 January 2025 an owners corporation can make a rule by special resolution banning short-stay accommodation of less than 28 days; however, the ban cannot apply to a lot that is the owner's or occupier's principal residence. Buyers planning to use an apartment as an Airbnb-style investment must check the rules first.
What if there is a dispute?
Common disputes involve noise, responsibility for leaks, use of car spaces, unpaid fees and breaches of rules. The usual process is: first talk to the other party or the owners corporation manager; then use the owners corporation's internal grievance procedure; if still unresolved, seek external help such as mediation, and ultimately apply to VCAT. The owners corporation can also issue breach notices for rule breaches, and serious or continuing breaches can go to VCAT. Keeping written records, photos and emails is very important for any later process.
What to check before buying an apartment
The owners corporation certificate sets out the lot's annual fees, arrears, special levies already resolved or proposed, insurance, maintenance plan, any current legal proceedings and more. But the certificate is a snapshot, so ask also to see the past two or three years' minutes and financial statements, and look for recurring discussion of facades, waterproofing, lifts or combustible cladding.
- Check that fees are reasonable and that the maintenance fund is adequate.
- Confirm whether any special levies have been resolved or proposed.
- Find out about building defects, cladding rectification or litigation.
- Read the rules, especially on pets, short stays and renovation restrictions.
- Confirm whether the car space and storage cage are part of your lot or common property.
- If you are a foreign buyer or overseas owner, arrange a reliable local contact to receive owners corporation notices.
Frequently asked questions
Can I refuse to pay owners corporation fees?
Generally no. Raise objections through meetings or the grievance procedure; unpaid fees may attract interest and the owners corporation may apply to VCAT to recover them.
Water is leaking from upstairs. Who is responsible?
It depends on whether the source is in the upstairs lot or in common property. Common property is generally the owners corporation's responsibility; a source in the upstairs lot is usually that owner's. Notify the manager first to help identify the source.
Can the owners corporation ban me from short-stay letting?
Since 1 January 2025, an owners corporation can ban stays of less than 28 days by special resolution, but the ban cannot apply to a lot that is the owner's or occupier's principal residence.
Where do I find the owners corporation certificate?
The vendor must attach it to the Section 32. Buyers can also ask to inspect the owners corporation's minutes, financial statements and other records.
I live overseas. How do I deal with owners corporation notices?
Give the owners corporation a valid address for service or email, and consider appointing a local agent or property manager so you do not miss meetings, levies or breach notices.
Chua Tan Associates has practised in Melbourne since 1990, acting on property purchases and sales, conveyancing, building contracts and property disputes in Mandarin, Cantonese and English. Tan Chua has long handled property and commercial matters for Melbourne's Chinese community. For help, call 03 9602 3988 or contact us online. We can meet at our Melbourne CBD office or by video.
This page provides general information only and is not legal advice.
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