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what is a multi owned property

MOP – 2 lots or more, tied to common property with an incorporated legal entity to govern and manage

Relevant legislation in Victoria – Subdivision Act 1988 and the Owners Corporations Act 2006


Developer roles + responsibilities:

Three stages where developer has control in governance decision-making

before the owners corporation comes into existence, the developer will make decisions which impact upon how the scheme will be governed
For example: who will manage the scheme, the initial budget, lot liabilities and entitlements, lot boundaries, service providers.

Shortly after the owners corporation comes into existence, before the lots are settled, the developer will usually call a meeting to ratify the decisions made pre-registration

Within initial developer period (as a lot owner)
Developer has diminishing control as each lot is sold
May last 5 years post registration


explain roles in stage 1 pre registeration

Financial Management – Budget, Contribution
Lot entitlements and lot liabilities
Scheme Rules
Service Providers – need to look at facilities


explain roles in stage 2 post registeration

Call and hold first meeting
Ratify decisions made pre-registration
Call and hold first AGM
The Owners Corporation Act 2006, sets out the issues that need to be discussed and voted on at the first AGM
Turn over scheme documents
Owners corporations need specifications, documents, etc


duty of commities

117 Duties of committees and sub-committees
A member of a committee or sub-committee of an owners corporation—
(a) must act honestly and in good faith in the performance of his or her functions; and
(b) must exercise due care and diligence in the performance of his or her functions; and
(c) must not make improper use of his or her position as a member to gain, directly or indirectly, an advantage for himself or herself or for any other person.


explain roles in stage 3 - initial developer period

Refer to section 68

Period starts at the date the scheme is registered
Developer’s control diminishes as lots sell
Developer can be a committee member and may exert control if they have voting power


explain governance responsibilities and negative impacts that could arise

insurance cover = Property value often underestimated – increased premium

engagement os service providers = Conflicts of interest – long-term contracts

documents handover = Maintenance issues arising

common property and assets = Forced sale / maintenance; withholding disclosed assets, incomplete transfer

calling and holding first AGM = Out of time – multiple impacts

Budget Setting and Levy Contributions = underestimated creating financial stress


legal duties owed by develoeprs

• In Victoria, section 68:
…the initial owner of land affected by an owners corporation must act honestly and in good faith and with due care and diligence in the interests of the owners corporation in exercising any rights under this Act…only while the initial owner is the owner of the majority of the lots affected by the owners corporation and only until the end of the period of 5 years following the registration of the plan of subdivision


Does the manager work for the developer or the owners cooperation?

o Managers typically have pre-existing relationship and future work with the developer creating a ‘conflict of interest’ in which trust of lot holders is jeopardised

o Levy contributions typically a false figure – owners cooperation will likely incur a deficit after year one leading to larger levies required from tenants
This is because developers underestimate initial budgets


elements of the water act 1989

1.) There is an unreasonable flow of water;

2.) From one person’s land, onto any other land; and

3.) The water causes:
Injury to any other person; or
Damage to the property (either real or personal) of any other person; or
Any other person to suffer economic (financial) loss;

Then, the person who caused the unreasonable flow of water is liable to pay damages to that other person in respect of that injury, damage or loss