BREAKING NEWS:
Latest Changes for OC Act will come into force on 1 December 2021.
In 2019, Victorian Parliament sought to change the Owners Corporations Act 2006 (Vic) (OC Act), with specific amendments that would impact owners corporation arrangements and management rights transactions through the introduction of the Owners Corporations and Other Acts Amendment Bill 2019. Now called the ‘Owners Corporations and Other Acts Amendment Act 2021’. (OC Bill).
According to the Explanatory Memorandum, the proposed amendments were directed toward expanding and improving developers’ duties to the owners corporations they create and enhancing protection for owners corporations.
We provide a brief update on the progress the OC Bill has made in Parliament, including its current status, and also discuss/explain a key amendment that was made to the OC Bill.
OC Bill passes both Houses
The OC Bill has now passed both Houses of Victorian Parliament. It passed with two key amendments that were introduced by the Legislative Council on Tuesday, 16 February 2021 and received Royal Assent on 23 February 2021.
The key amendments are:
- the delay in the commencement date
- a carve out for hotel and resort management contracts.
The provisions will come into force on 1 December 2021.
Delay in commencement date
Initially, the proposed commencement date for the OC Bill was 1 January 2021. However, the changes introduced by the Legislative Council have delayed the commencement date to 1 December 2021. The operation of the OC Bill won’t be retrospective.
Any agreements entered into prior to that revised commencement date will not be governed by the new law, so a window still remains.
Carve out for hotel and resort management contracts
Initially, the OC Bill proposed to limit the term of certain contracts to three years. These were contracts that:
- were entered into by the applicant for registration of the plan of subdivision
- relate to the owners corporation
- benefit the applicant.
The changes that have passed both houses of Parliament provide a carve out for hotel and resort management contracts relating to hotels, resorts and serviced apartment complexes.
The types of management contracts include letting agreements, leases and licences of common property for purposes of providing an onsite letting and caretaking service, and certain building maintenance and facility management agreements. This means that these hotel and resort management contracts will be able to exceed three years.
The amendments also contemplate that regulations may be made in order to achieve the underlying policy requirements.
The Owners Corporations Act 2006
Act No. 69/2006 (Version incorporating amendments as at 14 May 2014)
Download The Owners Corporations Act 2006 here or read below:
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