The Law Relating to Management Rights in Victoria

05 July 10

This article looks at Victoria where it is estimated that they are no more than 40 management rights complexes.
I will look at the constraints and obligations imposed on developers in Victoria whilst they control the Owners Corporation, particularly when it comes to entering into caretaking and letting agreements.
I will also look at the legislative requirements (or lack of them) in Victoria applying to the term of these agreements and the ability of caretakers and letting agents to “top up” the term.

The Owners Corporations Act 2006 (Act) provides that an Owners Corporation has the following functions:
• to manage and administer the common property; and
• to repair and maintain:
 the common property;
 the chattels, fixtures, fittings and services relating to common property and its enjoyment …

The Act provides that an Owners Corporation may appoint or employ persons to assist the Owners Corporation in carrying out its functions. Hence, an Owners Corporation can appoint a caretaker to clean and maintain the common property. Also the Act provides that an Owners Corporation, by special resolution, may decide:
• to provide a service to lot owners or occupiers of lots or the public, or
• to enter into agreements for the provision of services to lot owners or occupiers of lots.

Hence, an Owners Corporation has authority to enter into a Letting Agreement.
The Act specifies that the developer must convene the first meeting of the Owners Corporation within 6 months of the registration of the plan. At this meeting, the developer must provide (amongst other things) a Maintenance Plan (which is compulsory only for prescribed Owners Corporations – being Owners Corporations with more than 100 lots or which collect more than $200,000 in annual fees per financial year), as well as any contracts, leases and licences binding or benefiting the Owners Corporation.

The key section of the Act that relates to management agreements states that a developer 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 the Act. This obligation also includes the developer taking reasonable steps to enforce any domestic building contract entered into by the developer in respect to the plan – but only while the developer is the owner of the majority of lots in the Owners Corporation and until the end of 5 years following registration of the plan.

Consequently, other than the obligations on a developer to act honestly, in good faith and with due care and diligence, there are no developer control period restrictions in Victoria.

The Act has no limitation on the terms of agreements – including service contracts such as a Caretaking Agreement and a Letting Agreement.

Again, because the Act has no restriction on the term of agreements, there is likewise no restriction on the ability to top up agreements by way of variation.


There is nothing in the Act that compels an Owners Corporation to enter into a financiers deed. Consequently, an Owners Corporation can reject outright any request by a financier of a Caretaker to enter into such a deed.

The Act provides that a person (including a developer) must not require or demand that a lot owner give the person or another person a power of attorney in favour of the person or other person or a proxy for the purpose of voting at a meeting or in a ballot of an Owners Corporation.
Consequently, developers are outlawed from using proxies to control meetings, particularly the first annual general meeting (when Caretaking and Letting agreements and generally entered into).
The Act also provides that proxies must be delivered to the secretary of the Owners Corporation and are effective from the beginning of the first meeting of the Owners Corporation held after it is delivered to the secretary and lapses 12 months after being given or, if there is an earlier date specified in the authorisation, on that date.
This section also provides that a person who is not a lot owner and who holds a proxy for a lot owner may not vote on matters affecting himself or herself relating to:
• the delegation of powers and functions under Section 11; or
• the appointment, payment or removal of a (strata) manager under Part 6.
As Caretakers or Letting Agents are not recognised under the legislation, there is no particular provision in relation to Caretaker’s or Letting agent’s use of proxies.


Contact Us Now

Phone:+ 61 7 5552 6666
Fax:+ 61 7 5528 0955
Address:Level 2, 17 Welch St Southport, Qld, 4215
Postal:PO Box 1876
Southport 4215



Most Popular Articles

Management Rights News

Number of news items returned: 1 to 15 records of 113

The Different Types of Caretaking Agreements

17 November 2014


 Essentially, there are three types of caretaking agreements in the marketplace: “Do” agreements; “Supervisory” agreements; Hybrid “Do” and “Supervisory” agreements. “Do” Agreements A “Do” agreement ...

Unit Entitlement in NSW

11 February 2013


The issue of unit entitlement was recently looked at again as part of the Department of Fair Trading’s Discussion Paper ...


16 July 2015


This month, we continue our examination of various clauses within caretaking and letting agreements and the important considerations to be ...

Is it Time to Change the Management Rights Model?

13 May 2013


I think the time is right for the management rights industry to explore the creation of a new model. I ...

What Managers Need to know about the NSW Child Window Safety Devices Act 2013

17 January 2014


Resident building managers have general obligations under their Caretaking Agreements to assist Owners Corporations with building and compliance issues. Managers ...

Short-Term Letting, Occupancy Limits And Tenant Representatives In NSW Strata

25 July 2017


Occupancy Limits By-laws in NSW may limit the number of adult residents in a lot. The limit however cannot be fewer ...

Be Careful with your Proxies!

03 October 2013


In June this year, I wrote an article headed “Proxy Farming”, which set out the relevant restrictions on caretakers using ...

The Law Relating to Management Rights in Queensland

14 June 2010


This article looks at the legislation in Queensland dealing with the constraints and obligations imposed on developers whilst they control ...

Duty Bound or Duty Free - Do you know what Your Duties Are?

23 September 2013


The day-to-day care and maintenance of your resort facilities and communal areas is essential to its ongoing performance and success. ...

Caretaking and Letting Agreement Essentials Part 1

03 September 2014


We regularly prepare caretaking and letting agreements for new developments. However, it has become increasingly common for us to be ...

For Your Eyes Only!

15 April 2013


Information is a commodity and for many, information is power. As you would most likely know from personal experience, the right ...

Owners Corporation Insurance - How do we Stop the Spiraling Costs?

12 August 2013


In NSW, all strata schemes are required to be insured for the full replacement value, as well as public liability ...

Proxy Farming

10 June 2013


It is often stated that Strata and Community Schemes represent the “fourth tier of Government” and, as such, voting (either ...

"Legal Action", All those in Favour say "Why"

15 July 2013


I was recently involved in a New South Wales matter where an Executive Committee had received extensive legal advice from ...

Not Getting the Fundamentals Right

15 October 2013


A recent decision of the NSW Consumer, Trader and Tenancy Tribunal (CTTT) has highlighted the importance of ensuring that the ...