Law 1: Owners Corporation Act 2006, Management, and Case Studies

This report provides a comprehensive overview of Owners Corporation Law, focusing on the roles and responsibilities of managers. It begins with an introduction to the Owners Corporation, formerly known as the body corporate, and its functions in managing common property. The report details the legal requirements for managers, including registration under the Owners Corporation Act 2006, and the eligibility criteria. It outlines the process for registration and the powers of the Business Licensing Authority. The report further examines the engagement, termination, and legal duties of Owners Corporation managers in Victoria and Queensland, referencing relevant sections of the Act. It highlights the role of the Strata Community Association (SCA) in representing body corporate managers. Finally, the report analyzes two key case laws: Owners Corporation RP11571 v Walshe & Whitelock Pty Ltd, which addresses the legality of manager termination and the obligation to return records, and Parade [2017] QBCCMCmr 357, which considers the reasonableness of committee decisions regarding pet ownership. The report concludes with a summary of the key findings and implications of Owners Corporation Law.

Running Head: Law 1
Law

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Introduction:
Owners Corporation was formerly known as the body corporate, and it is introduced for
managing the common property of a residential, commercial, retail, industrial or mixed-use
property development. On 31st December 2007, body corporate was transformed into Owners
Corporation after the enforcement of the Owners Corporations Act 2006. This Act states various
duties and powers related to Owner’s Corporations. Section 1 of the owner’s Corporation Act
2006 states the main purposes of this Act:
 Defines the provisions in relation of management, powers, and functions of the owner’s
Corporation.
 It provide framework for resolving the disputes arise under owner’s corporation.
 Make amendments in the Subdivision Act 1988.
It must be noted that under this new Act term body corporate is replaced from the term owner’s
corporation and this Act also impose new responsibilities and legal obligations on Owners
Corporation (Owner Corporation, 2006).
In this various provisions of Owners Corporation such as legal requirements to become Owners
Corporation, mangers duties, etc. are discussed. It also states details regarding two case laws.
Lastly, paper is concluded with brief conclusion.
Legal requirements to work as a manager of owner’s corporation:
Managers of the owner’s Corporation provide various facilities in relation to the management of:
 Peoples in the community living environment, and

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 Money of other people on ongoing basis and not on single transaction basis.
 Current and future assets of the communities.
Managers of Owners Corporation must be registered under part 12 of the Owner’s Corporation
Act 2006, and in case manager conduct their operation in exchange of fee or reward without
getting registered then it is considered as offense.
Section 178 of the Owners Corporation Act 2006 states that, person must not conduct any
function as the manager of the Owner’s corporation either alone or in partnership, unless such
person is registered under part 12 of the Act.
Section 178 of the Owners Corporation Act 2006 states that, Person is not eligible for
registration under this part if:
 In case of natural person, person is under the age of 18 years.
 In case person is corporation, director of such corporation is a represented person for the
purpose of the Guardianship and Administration Act 1986.
 In case person is corporation, director of such corporation is an insolvent person under
administration.
Steps required for getting registered:
Section 180 of the Act states the procedure for lodging application for registration, and as per
this section application for registration as manager can be made to Business Licensing Authority.
It must be noted that application made by applicant must be in writing or in the effect of the form
approved by the business licensing authority. Such form must be submitted with sufficient
evidence such as identity of the applicant and in case of corporation, directors provide the birth

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certificate, passport (passport must be current or expired but not more than 2 years), driving
license, or any other relevant document.
Applicant also provide evidence which states that applicant is covered under required
professional indemnity insurance, and form must be submitted with prescribed fees.
Section 181 of the Act states that, business license authority has power to ask the applicant to
provide any other information which is necessary for determining the application and it also has
power to refuse the application if applicant fails to comply with the request within the time
period allowed by authority.
Section 182 of the Act states, business license authority registers the applicant under part 12 of
the Act, only when authority is satisfied that the applicant satisfied section 180 and 181 of the
Act, and applicant meet the eligibility criteria to get registered.
This section further states, registration of the applicant under this part remains in force until such
registration is cancelled or surrendered.
Section 186 of the Act states, automatic cancellation of the registration. As per this section
registration of the person is automatically cancelled if:
 In case person is corporation, director of such corporation is a represented person for the
purpose of the Guardianship and Administration Act 1986.
 In case person is corporation, director of such corporation is an insolvent person under
administration or an externally-administered body corporate.

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Engagement, termination and legal duties of an owner’s corporation:
Victoria:
Section 9 of the Act states the power of owner’s corporation to employ or engage person’s in the
corporation. As per this Act, Owner’s Corporation has power to employ or appoint the persons
for the purpose of assisting the owner’s corporation in conducting its functions.
Section 11 of the Act states the provisions related to management of owner’s corporation and
power of delegate. As per this section, owner’s corporation is managed by the lot owners and
they are responsible to direct the functions of lot owners.
Clause 2 of this section states that owner’s corporation either by passing resolution at the general
meeting or by instrument delegate any power or function of the owner’s corporation to the
employee of the owner’s corporation.
Section 119 of the owner’s Corporation Act 2006 states the provisions related to the
Appointment and removal of the manager. As per this section, Owners Corporation may appoint
a person as the manager of the owner’s corporation:
 If person receives any fee or reward for the purpose of carrying out the functions of the
manager and it must be noted that such person must be registered under the part 12.
 Manager must not be a lot owner.
 Contract related to appointment of manager must be in the prescribed form.
 Person cannot be appointed as the manager of the company unless such person is insured
under professional indemnity insurance, and amount of such insurance must be sufficient
to meet the claims for one year.

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 Owners Corporation has the power to revoke the appointment of a manager.
Section 5 of the Act states that it is the duty of the Owner’s Corporation to carry their functions
and powers in good faith and act honestly, and they must exercise due care and diligence.
Queensland:
Appointment of manger when committee is there:
Power to engage the body corporate manager is not vested in the community and body corporate
can pass ordinary resolution at a general meeting for the purpose of engaging the body corporate
manager under the contract. Terms of the contract must be stated under the documents which are
sending to the members of the body corporate before the general meeting. Document must state
the duties of the manager, length of the time period for which manager is appointed, and
payment arrangements.
When committee is not there:
In case body corporate is not able to elect the committee, then it can pass resolution at general
meeting for appointing the manager. Extraordinary general meeting can be hold by the body
corporate if at the AGM the body corporate fails to fill all the executive member positions on the
committee or the total number of voting members of the committee is less than 3.
EGM of the body corporate must be held within 2 months of the AGM, and agenda of this
meeting must state the intention to appoint a person as body corporate manager. Such intention
must be stated in the last of the agenda. Notice of EGM must state the terms of the contract and
an explanatory note also.

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It must be noted that such engagement must:
 be in writing
 State the term that manager is responsible to conduct all the operations of the committee
and each executive members of the committee.
 State the term which authorize the manager to exercise all the powers of the committee
and each executive members of the committee.
 Terms related to payment for the services of manager’s.
Engagement of the manger will end either at the end of the AGM of body corporate which is
held after the general meeting in which manger is engaged or after the expiry of 12 months from
the day engagement began.
Engagement of the manager can be terminated:
 With the consent of manager.
 Manager is convicted for any offense which involves dishonesty, fraud, and assault.
 Manager fails to compile with their duties, act or code (Queensland Government, n.d.).
Duties of manager:
Section 122 of the Owners Corporations Act 2006 states the duty of manager. As per this section,
manager of the owners’ corporation:
 Must act in good faith and honestly while conducting the operations.
 Must exercise powers of the corporation with due care and diligence.
 Must not use his position for any improper purpose for gaining advantage for himself or
any other person.

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This section further states that, manager must hold all the money on behalf of the Owner’s
Corporation and manager must maintain separate account for the money held for each owner’s
corporation by the manager.
Industry which represents body corporate manager:
Strata Community Association (SCA) is the most important industry which represents the Body
Corporate and Community Title Management in Australia and New Zealand. Membership of this
industry includes body corporate managers, staff for support, members of committee and
suppliers of products and services to the industry. This industry plays two roles that are
professional institute and advocates of consumer. SCA has 3300 members who help the industry
in conducting their functions.
Strata allowed the ownership of part of a property at individual level and also tried to combine
the individual ownership with shared ownership in the remainder through a legal entity known as
the owner’s corporation, body corporate, Strata Company or community association, etc.
Membership of this industry is open for everyone with an interest in Strata Schemes and it
includes managers of Strata, staff members, agents of Real Estate and service providers to the
strata industry which includes accountants, solicitors, engineers, surveyors, students and lot
owners under strata schemes.
Decisions on two case laws:
Owners Corporation RP11571 v Walshe & Whitelock Pty Ltd (Owners Corporations)
[2015] VCAT 1819:

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In this case, Court determined whether termination of the manager (Walshe & Whitelock) was
legal, and he was obliged to return the record to the Owners Corporation?
Court consider the terms of the contract between manager and Corporation, and as per the terms
of the Contract appointment of the manger was automatically extended for further 12 months
unless Owners Corporation terminate the contract by given written notice.
On 16th May 2015, committee was appointed by the members, and on the same day this
committee decided to change the managers of the Owners Corporation. On 27th May 2015,
members of the Committee send notification to the Walshe & Whitelock regarding their decision
to terminate him from the position of manager, and also request him to return the records and
funds to Ace Body Corporate Management.
As per the arguments stated by Walshe & Whitelock, termination of appointment is not valid and
they were still hold the position of the manager because:
 Resolution passed at the general Meeting was invalid, which make the decision of the
committee invalid.
 Owners Corporation does not follow the procedure for termination.
Court stated that, Section 119 of the Act imposed statutory power under Owners Corporation for
the purpose of revoking the management appointment. This power can be exercised by the
Corporation in effective manner, even though it breaks the contract of appointment. However,
such revocation can give the manager right to file claim against the corporation for breach of
contract but still this revocation was effective in nature.

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Section 127 of the Act states that, once the appointment of manager was terminated then
manager is obliged to return records and funds within 28 days of termination. Therefore,
termination of appointment of Walshe & Whitelock was valid and they are liable to refund the
funds and records.
Parade [2017] QBCCMCmr 357.
In this case, Court considers whether approval to keep a German Shepherd dog in lot 1 can be
given subject to the conditions stated in the application?
Court stated, Committee must act in reasonable manner while refusing the request of the
application seeking approval of the dog to reside in her lot. Section 100(f) states; committee must
act reasonably while considering the request for approval. Applicant also under the obligation to
prove that decision made by body corporate was not reasonable, but it requires prior approval of
the body corporate. While determining the application of pet approval, body corporate must
consider the genuine and adverse impacts on lot owners or occupiers.
In this case, judge stated that this matter was fall under the provisions of legislative dispute
resolution, because it was the dispute under the owner and body corporate. Section 276(1) of the
Act states that adjudicator was under the obligation to made an order which was just and
equitable in those particular situations for the purpose of resolving the dispute related to
community titles scheme.
Therefore, Judge believes concerns related to presence of dog under the scheme would be
resolved with the conditions which are adequately stated in the application, and in case applicant
fails to comply with these conditions then body corporate has power to revoke the approval.

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References:
Owner Corporation Act 2006- section 1.

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Owner Corporation Act 2006- section 11.
Owner Corporation Act 2006- section 119.
Owner Corporation Act 2006- section 122.
Owner Corporation Act 2006- section 178.
Owner Corporation Act 2006- section 180.
Owner Corporation Act 2006- section 181.
Owner Corporation Act 2006- section 182.
Owner Corporation Act 2006- section 186.
Owner Corporation Act 2006- section 5.
Owner Corporation Act 2006- section 9.
Owners Corporation RP11571 v Walshe & Whitelock Pty Ltd (Owners Corporations) [2015]
VCAT 1819.
Parade [2017] QBCCMCmr 357.
Queensland Government. Body corporate manager. Viewed at:
https://www.qld.gov.au/law/housing-and-neighbours/body-corporate/roles-and-responsibility/
body-corporate-manager. Accessed on 29th August 2017.
SCA. Membership Benefits. Viewed at: https://www.strata.community/about-us/member-
benefits. Accessed on 29th August 2017.
SCA. Who is SCA. Viewed at: https://www.strata.community/about-us/who-is-sca. Accessed on
29th August 2017.