Owners Corporation Certificate – Victoria

OWNERS CORPORATIONS CERTIFICATES – FOR SALE OF LOTS IN VICTORIA

Why do we need one?

An owners corporation certificate is required to be attached to the Section 32 statement of the contract of sale. All Owners Corporations in Victoria are required to prepare and supply a certificate within ten business days to anyone who applies in writing and pays the relevant maximum fee for each certificate.

The certificate must outline the current fees for the lot, the date fees have been paid, the total of any unpaid fees or charges for the lot, the date and amounts of any special levies or fees which have been raised and when they are payable, any additional maintenance or work about to be performed not included in the fees and levies, details of insurance coverage, funds held, any liabilities, agreements, leases or licences affecting common property, details about orders and notices served in the past 12 months, any legal proceedings on foot or anticipated, details of any professional manager engaged and the total lot entitlement and liability.

The certificate must be attached to a copy of resolutions made at the last AGM, a copy of the owners corporation rules registered at Land Victoria and a prescribed Statement of Advice and Information for Prospective Purchasers and Lot Owners.  An owners corporation is required to have a register of important information, and has 9 months from commencement to establish its owners corporation register.

Observations arising from the Owners Corporation Certificate

1. The OC Certificate can tell you a lot about a property. If there are significant issues at an OC you are looking to buy into, they should be reflected in the OC Certificate.
2. Who gets the OC certificate fee?  The Owners Corporation Manager if administered by an external Registered OC Manager or the Owners Corporation itself if administered from within.
3. Is the fee negotiable? Yes. You can negotiate with your external OC Manager, but normally the price is set at the applicable fee, take it or leave it and you need the certificate to sell your lot/s. Previously legislation allowed no more than $150.00 to be charged for any one OC certificate but this is continually revised. Multiple lots may mean more – e.g 3 lots will equate to more certificate fees. This can occur when you have an apartment, a car park and a storage cage.

For external managers this means a property can provide significant extra income other than agreed contractual management fees. Properties with a large turnover of apartments can from experience provide significant OC Certificate fee income to an OC Manager.

Owners Corporation Certificate requirements IN DETAIL as per Consumer Affairs Victoria

Your owners corporation must issue an owners corporation certificate to any person who submits a written application. The owners corporation may charge a fee of up to the prescribed maximum amount.

The certificate must be supplied within 10 business days after receiving the request and contain details as set out in the Owners Corporations Regulations 2007.

If the certificate relates to a lot affected by more than one owners corporation, a separate certificate must be prepared for each of them. Each certificate will incur a separate fee.

As vendors certificates are sometimes prepared up to 12 months before the sale of the property, purchasers should ask for a new certificate before settlement.

Alternatively, purchasers may make a time to inspect the owners corporation register and records, free of charge. While the inspection of the owners corporation register is free, the owners corporation can charge a reasonable fee for copies of documents.

Information to be provided

The certificate must include:

• • The current quarterly or annual fees for the lot
  • The date to which fees have been paid
  • The total unpaid fees or charges for the lot
  • The date that special fees or levies were approved and the due date for payment
  • Details of repairs, maintenance or other work that may incur extra charges to those already budgeted or approved
  • Details of insurance cover
  • Whether the owners corporation has resolved that members may arrange their own insurance and the date of this decision
  • The total funds held by the owners corporation
  • Whether the owners corporation has any other liabilities in addition to those listed above, and the details of those liabilities
  • Details of any contracts, leases, licences or agreements affecting the common property
  • Details of any agreements to provide services to lot owners, occupiers or the public
  • Details of any outstanding notices or orders served on the owners corporation in the past 12 months
  • Details of any legal proceedings involving the owners corporation and any circumstances likely to lead to proceedings
  • Whether the owners corporation has appointed or has resolved to appoint a manager and, if so, the name and address of the manager, and
  • Whether an administrator has been proposed or appointed for the owners corporation.

The following documents must also be included as attachments to the certificate:

1. • The owners corporation rules
   • The Statement of Advice and Information for Prospective Purchasers and Lot Owners
   • All resolutions made at the last annual general meeting, and
   • A statement that more information about prescribed matters is available by inspecting the owners corporation register.

Your owners corporation should have all of this information in its records or set out on the plan of subdivision. A copy of the plan of subdivision can be obtained from Land Victoria. The Statement of Advice and Information for Prospective Purchasers and Lot Owners is contained in Schedule 3 of the Owners Corporations Regulations 2007. A copy of the Statement is provided at the end of this fact sheet. A sample owners corporation certificate is also provided with this fact sheet.

Issuing a Certificate

If you intend to sell your property, you must include an owners corporation certificate and accompanying documents in the vendor’s statement or section 32. It is very important that the information contained in the owners corporation certificate is accurate. The certificate should be authorised by:

• A person delegated to prepare the certificate. The delegate should print their name, sign and date the certificate, or
• Affixing the common seal, witnessed and dated by two lot owners. The owners corporation can authorise its manager to affix the common seal to all owners corporation certificates but this authorisation must be recorded in the minutes of the general meeting. The use of the common seal should be recorded in your owners corporation’s common seal register if one exists.

If you request an owners corporation certificate, check for the following information to ensure the certificate is authorised:

• The name of the person who prepared the owners corporation certificate
• The capacity or authority of the person to prepare the owners corporation certificate, and
• The date that the owners corporation certificate was prepared and issued.

Keep a record of certificates issued It is good practice for your owners corporation committee to instruct the manager or secretary, as delegate of the owners corporation, to keep a record of all owners corporation certificates issued. This record should include:

• The applicant’s details
• Date received
• Record of payment
• Date issued, and
• A copy of the owners corporation certificate.

This information can be used for financial reporting and taxation purposes, and may be important if there is a dispute. The record should be included in the manager’s or committee’s report at the annual general meeting.

Owners corporation certificate fees

On 1 October 2014, a new fee structure was introduced, setting out the maximum amount an owners corporation can charge for issuing a certificate.

If a lot is affected by more than one owners corporation, a separate certificate may be issued for each and the owners corporation may charge a separate fee.

There are discounts for additional certificates, when required as part of a sale of land from the same owners corporation manager.

The value of a fee unit is $14.81 for 2019-20. This amount will change at the start of each financial year. For more information, visit Indexation of fees and penalties – Department of Treasury and Finance.

Download our Sample owners corporation certificate (Word, 154KB).

Fees for copies of register and records

On 1 October 2014, a fee structure was introduced which sets out the maximum amount an owners corporation can charge for providing copies of the register and records.

The value of a fee unit is $14.81 for 2020-21. This amount will change at the start of each financial year. For more information, visit Indexation of fees and penalties – Department of Treasury and Finance.

From 1 October 2014, there are:

• A new maximum fee for providing an owners corporation certificate
• Maximum fees for urgent requests (between two and five days)
• A lower fee for additional certificates from the same owners corporation manager
• Maximum fees for copies of the owners corporation register and records.

An owners corporation must provide a certificate within 10 business days of receiving the fee and request in writing. If a person asks for the certificate within a shorter time, and the owners corporation agrees to this, the fee cannot exceed the maximum amounts set by the regulations for that service. For example, a fee for providing a certificate within 24 hours cannot exceed the fee for providing a certificate within two days.

For a full list of the fees, view Consumer Affairs Victoria: Fees – Owners Corporations Page.

The following issues led to a review of the fee structure:

• Owners corporations charging excessive fees to meet urgent requests, such as providing an owners corporation certificate within a short timeframe
• The fee for additional certificates by the same owners corporation manager is the same even though some information is duplicated when part of the same sale of land
• The owners corporation register and records can be inspected for free but the owners corporation is entitled to charge a reasonable cost when providing copies of the register and records. A ‘reasonable cost’ is not defined.

Disputes

We recommend first trying to resolve any disputes about fees and charges through the owners corporation’s internal dispute resolution process. For more information, view our Complaint handling in your owners corporation page.

If the matter remains unresolved, a lot owner can apply to the Victorian Civil and Administrative Tribunal (VCAT) for a ruling.

If an owners corporation is in dispute over a fee, it must first provide the required fee notices before applying to VCAT for a ruling.