Bill Speech: Owners Corporations and Other Acts Amendment Bill 2019
Ms SPENCE (Yuroke) (18:05): I am very pleased to add my contribution to the Owners Corporations and Other Acts Amendment Bill 2019. This bill implements the outcomes of the review of legislation governing the operation of owners corporations in Victoria undertaken as part of the consumer property law review. I will talk more about that review shortly, because that was a very comprehensive review process and it warrants further discussion. But to commence, I will go over what the bill will do. I will say at the outset that this will just be a bit of a shopping list, a bit of a summary of what the bill does.
A member interjected.
Ms SPENCE: Not terribly exciting but a good idea. Time will not really permit me to go into detail of what it does do because there is a huge amount of changes to the Owners Corporations Act 2006 and other acts within this bill. I do find it quite bemusing that the member for Melbourne in her contribution made the comment that the government was just doing a tick and flick rather than trying to solve problems. I think she must not have had a look at either the detail of the review process, which was so comprehensive that it started back in 2015 and has culminated in this bill, or the detail of the amendments that are contained in it. Anyhow, I will get to the detail of the review process shortly.
Firstly, the changes that are included in this bill: the Owners Corporations and Other Acts Amendment Bill 2019 will amend legislation to rationalise the regulation of owners corporations. In doing so, owners corporations will be regulated according to their size, with a five-tiered system that has thresholds whereby larger owners corporations will be subject to a greater number of requirements with regard to committees, professional managers, external audits or reviews of annual financial statements, building insurance, maintenance plans and funds and annual financial statements, whereas smaller owners corporations will be subject to less stringent regulation. It is quite a sensible change which goes from a rather flat structure to a sensible tiered structure.
Secondly, the bill will improve the quality of owners corporation managers and enhance protection for owners corporations. It will do this by strengthening the disqualification and insurance provisions of current registration schemes for professional owners corporation managers, by prohibiting certain terms in owners corporation contracts and by giving VCAT the power to rule generally as to whether other terms in management contracts are unfair.
The bill will expand and improve developers duties to owners corporations that they create and enhance protection for owners corporations. The bill will improve the governance and financial administration of and internal relations in owners corporations. It will do this in a number of ways. It will do so by improving decision-making within inactive owners corporations and by giving owners corporation managers authority to make interim decisions in certain circumstances. It will align the provisions of the act governing the validity of owners corporation resolutions and those governing the validity of owners corporation rules by requiring that both resolutions and rules not be oppressive or unfairly prejudicial to a lot owner or resident or unfairly discriminate against a lot owner or resident.
It supports the owners corporations duty to repair and maintain common property by permitting them to enter private lots on reasonable notice where necessary to enable repairs to common property. It expands the duties of owners corporation committee members to include a duty to act in the owners corporation’s best interest. It permits owners corporations to collect and use water falling on common property to deal with water rights. It restricts proxy farming and committee proxies and prohibits contractual limitations on lot owners’ voting rights. It improves decision-making in owners corporations, particularly inactive owners corporations, by providing for special resolutions that do not obtain the required voting threshold but which are unopposed to be treated as interim special resolutions.
It reduces the maximum size of owners corporation committees from 12 to seven members and allows the chair or secretary of the committee to arrange committee ballots. It exempts owners corporations from the need to engage the internal dispute resolution process for matters they initiate. It improves dispute resolution in owners corporations by enhancing the internal dispute resolution process set out in the model rules, including the provision for a grievance subcommittee. It enhances the compliance with owners corporations rules by increasing the maximum penalty for a breach to $1100 and allows owners corporations to retain penalties. It enhances an owners corporation’s ability to initiate legal actions by applying different voting thresholds for actions in different courts. It reduces inequities for non-defaulting lot owners by permitting owners corporations to recover reasonable prelitigation costs from defaulting lot owners and to adopt payment plans in hardship cases. It reduces insurance and other inequities between lot owners by permitting owners corporations to separately levy lot owners in certain circumstances. It introduces a range of measures to clarify relationships and reduce disputes in owners corporations. It improves safety for residents by developing model rules for the provision of fire safety advice by lot owners to tenants—and much more.
The bill will also improve and rationalise the regulation of owners corporations in retirement villages by providing for a clearer separation between owners corporations meetings, retirement village meetings and village resident committee meetings and by aligning the powers of village operators who control owners corporations in retirement villages with the aims of the Retirement Villages Act 1986. The bill also makes a number of minor and technical drafting improvements to the legislation.
This is an incredibly comprehensive amendment bill that implements the findings of the consumer property law review. As I mentioned earlier, I do want to go into that review process in some detail because this was a massive review process and it went for several years. The review examined both the conduct of owners corporation managers and the functions and management of owners corporations. The review was announced back in August 2015. It covered four major pieces of consumer property legislation for which the Minister for Consumer Affairs, Gaming and Liquor Regulation is responsible, including the Owners Corporation Act 2006.
There was issues paper 1, which was entitled Conduct and Institutional Arrangements: Estate Agents, Conveyancers and Owners Corporation Managers, released in December 2015. Submissions closed on 11 March 2016, and 50 submissions are available to see on the website. This review is all still available on the website, and you can go online and see the issues papers and all the rest. It is all still up there, and it is quite interesting.
Issues paper 2 was entitled Owners Corporations and was released in March 2016. Submissions closed on 29 April 2016. There are 82 submissions available online to have a look at.
An options paper titled Options for Reform of the Owners Corporations Act 2006 was released in November 2016, and this paper responded to the feedback that had been received from issues papers 1 and 2. It examined the issues that had been identified for reform and presented options for consideration. The minister, prior to the election in 2018, committed to bringing out an exposure draft, and in fact did so in April 2019. This bill has come about following that, so as we can see, there was an incredibly extensive consultation process. The bill has got a huge amount of backing when you see how many submissions and how much detail has gone into putting it together. I am very pleased to be able to say that a lot of people have had input into it. It is quite a comprehensive review. It is a very comprehensive act. I am very pleased to say that I fully support the bill. It is certainly not a ‘tick and flick’, as the member for Melbourne has asserted.
I commend the bill to the house.