Various amendments are due to be made to the Owners Corporation Act 2006 which will take effect from 1 December this year. The amendments are aimed at creating more transparency between Developer’s and their nominated Owners Corporation Manager. They are listed below.
Firstly, there will be five tiers of Owners Corporations (OC) that will be based on the number of residential lots within a development – each with differing obligations and potential exemptions.
Secondly, Developers will have an obligation to act in the best interest of the OC for a period of 10 years after registration of a plan of subdivision, rather than 5 years.
Thirdly, Developers will be obliged to disclose their relationship with the OC manager and any financial transactions or benefits of the relationship to the members.
Fourthly, Developers cannot initially appoint themselves or their associates as the OC Manager if they hold a majority vote amongst the owners of the lots, they must not cast a vote in respect of resolutions regarding defects.
Fifthly, if the OC has incurred additional costs due to a lot owner’s use of the lot and the set annual fee does not adequately cover these costs, an additional annual fee, including additional fees for excess insurance claims can be levied by the OC.
Sixthly, OC managers will be able to pass ‘interim resolutions when there are no votes against a resolution, but a special resolution is unable to be passed where there is low attendance at meetings.
Lastly, common seals are no longer required, and signatures of just two separate lot owners will suffice.
These additional obligations for Developers under the Amendment Act emphasise the importance of acting honestly and in the best interests of the OC.