Proposed changes to the Owners’ Corporation Act

As we write, Victorian Parliament is due to debate a draft Bill to amend the Owners’ Corporation (OC) Act 2006.

The flammable cladding issue has highlighted a serious shortcoming in the proposed amendments.

For several months we have been writing about the huge financial cost to owners caused by flammable cladding, and the slim prospects of anyone ever receiving a single dollar from the much-touted state government cladding fund.

Based on State Treasury estimates, there will be enough in the fund to help only about 40 buildings of the 1069 identified as having dangerous cladding. About 32 extreme-risk buildings, 409 high-risk buildings and 388 moderate-risk buildings will not receive any assistance.

This leaves the burden on individual OCs to seek redress. Currently any action against a builder requires a special resolution, unlike any other state or territory where an ordinary resolution suffices.

We Live Here supports the amendment of the legislation to require an ordinary resolution to be passed prior to the commencement of legal proceedings. This will bring Victoria in line with the Strata Schemes Management Act 2015 (NSW) and the Body Corporate and Community Management Act 1997 (QLD). 

The proposed exposure draft proposes to introduce different voting thresholds for certain matters, by stating that legal proceedings may be commenced by ordinary resolution if the jurisdiction of the matter is within the Magistrate Court limit of $100,000.

So, if an OC sought to bring a claim against a builder for installing flammable cladding it will still require a special resolution to be passed. No other state or territory in Australia requires this threshold. This requirement acts as a barrier to justice.

Extending protections to deal with facilities managers

New clauses in the exposure draft go a long way towards appropriate protection against unscrupulous developers awarding lucrative long-term OC management contracts to associates.

The same protections should be aimed at facilities management contracts which can be even more lucrative than OC management deals. The exposure draft is silent on any contract other than for OC management. This a critical oversight that must be addressed to rid the industry of endemic corrupt practices.

The reform required is simple: just limit the term of all third-party OC contracts to three years, renewable at the OC’s option - regardless of who benefits. Otherwise the proposed reform will be just ludicrously simple to rort.

This legislation needs to allow owners to seek a ruling from Victorian Civil and Administrative Tribunal (VCAT) on fairness and equity principles for all existing contracts of more than three years, not just new contracts signed since 2017.

Grenfell report – first phase

Spare a thought for the bereaved, survivors and families from the 2017 Grenfell Tower flammable cladding fire disaster. 

The long-awaited public inquiry report into what happened on the night of the Grenfell Tower fire is likely to be released one day before Britain is due to leave the European Union (EU).

The UK prime minister, Boris Johnson, wrote to the inquiry chair, Sir Martin Moore-Bick, saying that the report must be published no later than October 30.

English media outlets have reported that Grenfell United, the advocacy group representing the survivors and bereaved, wrote to Moore-Bick saying, “to publish the report on October 30 risks burying it in Brexit.”

This first report will deal only with what happened on the night of the fire. 

The second phase of the inquiry is due to start in January next year and will investigate decisions made by the tower owner, the council, the landlords, the UK equivalent of the OC, the architects, the building contractor and two cladding material suppliers.

The second report is expected in 2021 – four years after the tragedy.

RMIT University research into cladding impacts

We Live Here has been contacted by researchers at RMIT University seeking participants for a study on the impacts on people living with flammable cladding. The project is being managed by Dr Trivess Moore and Dr David Oswald from the School of Property, Construction and Project Management at RMIT University.

If you are affected by the cladding issue, the RMIT research team would like to hear about your experiences of the scale of the problems you face day to day. The research involves an interview by phone or in person. Questions cover social, security and financial impacts and the results will form the basis of range of peer reviewed reports, journal articles, conference papers or media releases. Contact We Live Here via our website for details.

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