Three steps, in order
The Owners Corporations Act 2006 sets out a three-step process for complaints, which Consumer Affairs Victoria describes as follows.
- The internal complaints processRun by the owners corporation itself, under its own dispute rules or the model dispute rule.
- The Dispute Settlement Centre of VictoriaFor a lot owner, tenant or manager whose complaint the internal process did not resolve.
- VCATThe tribunal, which can hear the matter and make orders.
Step 1: inside the owners corporation
An owners corporation either uses the model dispute rule in the Owners Corporations Regulations 2018 or makes its own dispute rules, and its own rules must be recorded at Land Use Victoria to be enforceable. The model rule has the parties meet, with the grievance committee or the owners corporation, within 28 calendar days of the dispute coming to everyone’s attention (see the rules guide). In Consumer Affairs Victoria’s words, the process should set out:
Consumer Affairs Victoria, Complaint handling and resolving disputes
- “who to contact if there is a problem or complaint
- rules detailing the complaints process
- directions about where to get information
- how to record the problem or the breach of rules
- how to notify your owners corporation committee or manager of a problem or complaint
- how to raise an issue at an owners corporation or committee meeting
- formal complaint procedures
- how to nominate a third party to help resolve a dispute.”
The complaint and the notices
A lot owner, tenant or manager can complain in writing to the owners corporation on the approved complaint form, about an alleged breach of the Act, the Regulations or the owners corporation’s rules. Before complaining, CAV suggests recording who, what, how, the time and the date, with a photograph if it helps, such as of a car parked in the wrong place.
| If the owners corporation… | What follows |
|---|---|
| Decides to take no action | It must give the person who complained written reasons |
| Decides to act | It must give the person complained about the approved notice to rectify the breach, which allows 28 days, and give the lot owner a copy if the complaint is about their tenant |
| Finds the breach still unfixed after 28 days | It may issue a final notice in writing, allowing another 28 days, and stating that the matter may go to VCAT if the breach is not fixed |
Where things go next depends on who complained. If the owners corporation is complaining about a lot owner, tenant or manager, its next step is to apply to VCAT. If a lot owner, tenant or manager is complaining, the next step is to contact the Dispute Settlement Centre of Victoria. Every complaint, and any action taken, must be reported to the annual general meeting, and the owners corporation must keep its records of a complaint for seven years.
Step 2: the Dispute Settlement Centre of Victoria
The Dispute Settlement Centre of Victoria (DSCV) offers free dispute resolution across the state. Its mediation is free, voluntary and confidential, run by a trained mediator who takes no side. Consumer Affairs Victoria notes that going to DSCV before VCAT is not compulsory, but that it may settle the matter faster and for less, and that DSCV can only try to resolve a dispute if every party agrees to take part.
Step 3: VCAT
An owners corporation must follow its internal complaints process before it applies to VCAT. Consumer Affairs Victoria lists who VCAT accepts complaints from:
Consumer Affairs Victoria, Complaint handling and resolving disputes
- “a manager or former manager
- a lot owner or former lot owner
- the owners corporation
- the occupier or former occupier of a lot
- a mortgagee of a lot
- an insurer under a policy taken out by the owners corporation
- the Director of Consumer Affairs Victoria.”
VCAT’s own page lists the kinds of owners corporation dispute it can help with. In its order, they include unpaid fees; financial management and record keeping; managers’ fees, performance and contracts; repairs and maintenance, of lots or of common property; neighbourhood disputes involving unit owners, service companies or company title corporations; short stay accommodation disputes; a lot owner breaking the rules; some fees for shared facilities; changes to a plan of subdivision; abandoned goods on common property; and urgent interim injunctions. It also lists what it cannot do, among them working out how much in fees is owing, and recovering fees when the fee notices were not given as the law requires. VCAT cannot give legal advice.
What the tribunal can order, in Consumer Affairs Victoria’s words:
Consumer Affairs Victoria, Complaint handling and resolving disputes
- “ordering someone to do something
- imposing a penalty for breaches of rules
- requiring the payment of money owed, as damages or restitution
- varying or ordering a term of a contract void
- appointing or removing a manager
- appointing or removing a chairperson or secretary
- appointing an administrator.”
When the owners corporation goes to law
An owners corporation must pass a resolution before it starts proceedings in a court or tribunal, and the kind of resolution depends on what it is asking for. Consumer Affairs Victoria sets out the thresholds from the Act:
| Claim | Resolution needed |
|---|---|
| Not for money | Ordinary resolution |
| For money, up to twice the owners corporation’s annual fees | Ordinary resolution |
| For money, more than twice the annual fees | Special resolution |
A two-lot owners corporation needs no special resolution to bring legal proceedings. For disputes over fees, the fees guide sets out the notices that must come first.